Johnson & Johnson plans to appeal $18.8M verdict in California talc baby powder cancer case

On Tuesday a judge ordered Johnson & Johnson to pay $18.8 million to a California man who said he developed a rare form of cancer called mesothelioma after longterm exposure to the big pharma’s talc product.

But J&J VP of litigation Erik Haas said in an investors call Thursday morning that the company is expecting to file an appeal and will continue to defend the safety of the product.

Erik Haas

Haas claimed during the call that the judge on the case passed down “erroneous rulings” that prevented J&J’s lawyers “from sharing with a jury critical facts that demonstrate that plaintiff’s exceedingly rare form of mesothelioma was not caused by baby powder.”

“Without the benefit of that evidence, the jury rendered a verdict that is irreconcilable with decades of independent scientific evaluations confirming Johnson’s baby powder is safe, does not contain asbestos and does not cause cancer,” Haas added.

The California cancer patient, Emory Hernandez Valadez, won’t see any of the awarded damages for now, however. And the court awarded him damages for medical bills and pain and suffering, but not for punitive damages.

J&J’s subsidiary, LTL Management, filed for bankruptcy, and the judge on the case froze litigation cases while it works its way through the court. The judge is expected to rule by Aug. 2, after a motion to dismiss the hearing took place in the last week of June, Haas said. The lawyers representing asbestos plaintiffs are seeking to dismiss the subsidiary’s bankruptcy filing, arguing that it was done in bad faith to protect the company from litigation.

J&J’s LTL filed for bankruptcy again in April in its second bid to settle tens of thousands of cases that allege some of the company’s talc products contained asbestos and caused cancer. J&J has offered to pay out $8.9 billion to settle the suits as well as prevent new cases.

According to Haas, approximately 60,000 of the claimants have agreed to the settlement terms, while about 40,000 are still in opposition.

“The numbers right now show that the vast majority of claimants support the proposed plan based upon the testimony during that hearing from the lawyers that support those claimants,” Haas said. “We are confident that that support will not waver and we do anticipate that additional support will be coming forward.”

Haas added that the company doesn’t expect more cases to go to court, except for Valadez’s case.

But lawyers and their clients in the suit said J&J’s move to spin the liabilities into LTL and then file bankruptcy was a “Texas two-step” bankruptcy, where a company splits off its liabilities from its assets into a new company before declaring bankruptcy and preventing plaintiffs from pursuing claims against the parent company.

Talc claimants accused LTL of exiting a $61.5 billion funding agreement with J&J which they say “functioned like an ATM machine” in order to “create financial distress,” before then refiling for bankruptcy.

Denyse Clancy, one of the attorneys for Valadez, told Endpoints News, “We think that Johnson and Johnson’s continued refrain, that there’s no asbestos in their talc, despite their own internal documents saying that, despite the FDA confirming that, and despite now consistent findings of multiple mesothelioma verdicts showing that juries disagree with Johnson Johnson’s position, is now flying in the face of unrefuted facts.”

J&J stopped manufacturing its talc products in the US in 2020, but maintains it was a business decision fueled in part by “lack of sales due to misinformation about the safety” of the products. The company said it would change the formula of its baby powder products in August.

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