When the news came out that Johnson & Johnson had tried to push the costs of baby powder lawsuits off on a bogus subsidiary, people were angry. Mass tort attorneys all over the nation wondered if they’d get away with it.
Here, we’ll explain how Johnson & Johnson almost pulled it off. If you developed cancer after using Johnson & Johnson baby powder, call our mass tort attorneys today. We offer all new clients a free, initial consultation.
There Is Still a Big Debate Over Whether Johnson & Johnson Baby Powder Causes Cancer
In some of the mass tort cases our office handles, it’s pretty clear that the defendant should be held liable. When it comes to dangerous drugs and defective medical devices, patients need to be protected.
With the Johnson & Johnson baby powder case, there is still speculation about whether the talc in the powder causes cancer. The plaintiffs’ mass tort attorneys argue that it does. Johnson & Johnson insists that it doesn’t.
Mass Tort Lawyers Are Alleging That the Talc in the Powder Causes Cancer
The crux of the Johnson & Johnson baby powder case is that the talc in the powder causes cancer. Many of the plaintiffs in the Johnson & Johnson litigation have alleged that the powder caused their ovarian cancer.
Many other mass tort attorneys have alleged that the Johnson & Johnson baby powder causes the following types of cancer:
- Ovarian Cancer
- Lung cancer
- Stomach Cancer
If you’re suffering from any of these illnesses, you should call a mass tort attorney immediately. If you have also used J & J’s baby powder for many years, you may have a claim for damages.
Johnson & Johnson Insists Their Baby Powder Is Perfectly Safe
Despite the high volume of lawsuits filed against Johnson & Johnson, the company swears that it’s perfectly safe. Of course, there’s a good chance Johnson & Johnson has known for years that their product causes cancer.
The way these large corporations gauge these cases is simple. They look at how much it will cost to take the product off the shelf. Then they look at how much it will cost to pay off any potential future lawsuits.
Whichever costs less is the option the company will choose.
There Are Already Some Big Judgments Filed Against J & J
It would be one thing if none of the baby powder cases had gone to trial. However, there have been cases already adjudicated.
For Johnson & Johnson to wait until now to create a subsidiary and assign the baby powder judgments to the subsidiary is odd.
It’s hard to imagine that the CEOs at Johnson & Johnson would think they could get away with what they did. It was rather obvious that they were simply trying to avoid liability in the baby powder cancer cases.
To Avoid Having to Pay These Judgments, J & J Attempted the “Texas Two Step”
There is a term used in the legal field. It’s called the “Texas Two Step.” It’s called this is because it originated in Texas.
What this term refers to is a maneuver used by large corporations to avoid paying their debts.
The first step involves the corporation creating a new subsidiary. Then they transfer all their bad debt, including civil judgments to the subsidiary.
The second step is rather easy. The subsidiary, which now holds the legal judgments filed against the parent company, files a Chapter 11 bankruptcy. Voila! The debt is gone, the subsidiary is gone, and the parent gets to walk away.
Johnson & Johnson Tried to Avoid Liability This Way
Last year, Johnson and Johnson decided to give the “Texas Two Step” a whirl. They created a subsidiary called, “LTL Management, LLC. The next thing they did was transfer all the baby powder judgments to LTL.
Once all the debts and civil judgments were transferred, LTL filed for Chapter 11 bankruptcy. The hope was that the bankruptcy would go through and none of the plaintiffs would get their money.
The Judge for the 3rd Circuit Ruled Against Johnson & Johnson
For a while there, it appeared as if Johnson & Johnson was going to get away with it. However, earlier this year, Judge Thomas Ambro, out of the 3rd Circuit Court, denied Johnson & Johnson’s request.
What the judge said was that, for the purposes of the Chapter 11 bankruptcy, the court would look at the assets of both LTL Management, LLC and Johnson & Johnson.
The Judge Insisted on Including the Assets of the Subsidiary and J & J
Once Judge Ambro combined the assets of LTL Management, LLC with those of Johnson & Johnson, it was clear the company had plenty of money to pay off the judgments.
Had the court ruled the other way, Johnson & Johnson, one of the largest pharmaceutical companies in the world, would have managed to get out of paying its judgments.
The way your mass tort attorney sees things, had the judge ruled another way, it would be like saying it was okay for Johnson & Johnson to put cancer-causing agents in its products.
What Will Your Mass Tort Attorney Do Now?
The fact that Johnson & Johnson tried the “Texas Two Step” to avoid liability in the baby powder cases shouldn’t surprise anyone.
This is an age-old trick used by large corporations to avoid having to pay their legal judgments. Our mass tort attorneys have seen dozens of companies attempt this over the years.
The ironic thing about what Johnson & Johnson tried to do is that any ordinary person knows it can’t possibly be legal.
Thankfully, when it comes to the Johnson & Johnson baby powder litigation, the judge told the defendant that they weren’t going to let them off the hook.
If you have cancer and think it may be tied to your use of Johnson & Johnson’s baby powder, call our office. Take the time to sit down with an experienced mass tort attorney.
Call today and schedule your free, initial consultation. Find out if your claim is worth pursuing free of charge.