Johnson & Johnson is receiving criticism from lawmakers and consumer advocates over a recent move that transfers all of its baby powder-related litigation to a new company it formed called LTL, NPR reported Oct. 21.
Johnson & Johnson has faced thousands of lawsuits over claims that its talc-based baby powder contained asbestos that causes cancer. About 16,800 people have sued Johnson & Johnson in state and federal courts alleging the powders caused either ovarian cancer or mesothelioma and that J&J didn't warn consumers of the risk.
The drugmaker recently created LTL and moved all of the baby powder-related liability to the new firm, which filed for bankruptcy in a federal court in Charlotte, N.C., NPR reported. The move limits efforts to recover damages for those who claim to have been harmed by the baby powder, consumer advocates say.
Johnson & Johnson CFO Joseph Wolk defended the move in an Oct. 19 call with investors and asserted that the baby powders are safe, according to NPR.
"There's an established process that allows companies facing abusive tort systems to resolve claims in an efficient and equitable manner," he said.
LTL said in a statement to NPR that Johnson & Johnson has agreed to provide the firm with $2 billion, along with other funds, for future payouts related to the lawsuits.
"We are confident all parties will be treated equitably during this process," John Kim, chief legal officer for LTL, told NPR.
Andrew Birchfield, an attorney with the firm representing women who have sued Johnson & Johnson, told NPR the move could make it much more difficult for his clients to recover damages.
In June 2020, a Missouri appeals court ordered Johnson & Johnson to pay $2.1 billion in damages to women who claimed the baby powder caused their ovarian cancer.
Read the full article here.