By Brendan Pierson
(Reuters) – Johnson & Johnson is facing a new proposed class action seeking damages and medical monitoring on behalf of women who have been diagnosed with cancer, or might develop it in the future, allegedly as a result of using the company’s baby powder and other talc products.
The lawsuit, filed on Monday in New Jersey federal court, is the first to seek medical monitoring, or regular testing meant to catch cancer early, on behalf of talc users. The proposed class could include thousands of women, but would not include the more than 61,000 people who have already filed personal injury lawsuits over J&J’s talc, claiming it contains cancer-causing asbestos.
J&J maintains its talc is safe, asbestos-free and does not cause cancer.
The law firms behind the new case are opposed to J&J’s proposal to settle nearly all talc claims against it for $6.48 billion through a prepackaged bankruptcy. The same firms are also pursuing a separate class action seeking a court order blocking the bankruptcy.
The bankruptcy proposal needs support from 75% of talc claimants, with a three-month voting period ending on July 26.
Erik Haas, J&J’s worldwide vice president of litigation, said in a statement that plaintiffs’ lawyers brought Monday’s “meritless” lawsuit to thwart the bankruptcy plan because they can collect more fees outside of bankruptcy, putting their own interests ahead of their clients.
“The plaintiff firms should cease the obstructionist behavior, and let their clients decide for themselves whether to accept the pending offer,” he said.
Lawyers opposed to the deal have denied that they are motivated by higher fees and said the bankruptcy proposal would not adequately compensate their clients.
Chris Tisi, one of the lawyers bringing the new lawsuit, said in a statement that medical monitoring was necessary because the “inadequate funding” of the bankruptcy plan “doesn’t realistically address the needs of women who could develop ovarian cancer in the future because of past baby powder use.”
Both the proposed settlement and the new class action concern claims that talc caused ovarian and other gynecological cancers, which make up the vast majority of cases. A smaller number of claims have been brought by people who developed mesothelioma, most of which have settled.
J&J has already tried and failed twice to resolve current and future talc claims through bankruptcy.
The legal strategy, known as a Texas two-step, involves creating a subsidiary to absorb the company’s talc liability, which then declares bankruptcy to settle the cases. The previous efforts failed because courts found that the new subsidiary lacked the “financial distress” to justify bankruptcy.
(Reporting By Brendan Pierson in New York, Editing by Alexia Garamfalvi and Bill Berkrot)
