DuBose Law Firm, PLLC

You are here: Home / Archives for Asbestos / asbestos in talc

asbestos in talc

Johnson & Johnson Talc Spinoff Files for Bankruptcy Protection

By

baby powder may contain asbestos
Asbestos talc in baby powder

Johnson & Johnson, while not filing for bankruptcy protection itself, may still avoid asbestos talc liabilities. This is done by spinning liabilities off to a newly created subsidiary.

Late last week, Johnson & Johnson (J&J) created a new subsidiary named LTL Management. Company officials confirmed the parent company then moved $2 billion in asbestos talc lawsuit funds over to LTL Management. In turn, LTL Management then filed for bankruptcy protection on October 14th. 

This bankruptcy technique saw increasing use by large corporations in recent years seeking to avoid responsibility from product liability and class action claims. 

Since last summer, lawyers representing cancer victims unsuccessfully asked multiple judges to prevent J&J from completing a spin-off of its liabilities.

Bankruptcy protection restricts recovery for thousands

Recent lawsuits, as well as a Reuters investigation in 2018, revealed that asbestos contaminated talcum powder existed in baby powder for years. Thousands of cancer lawsuits were pending against Johnson & Johnson at the time of the LTL Management bankruptcy filing.  Now the recovery options for those individuals are significantly restricted by this bankruptcy protection maneuver.

Linda Lipsen, of the American Association for Justice, called Johnson & Johnson’s move “an unconscionable abuse of the legal system. Congress must act to ensure that no other ill-intentioned corporation can ever do the same by passing the Nondebtor Release Prohibition Act of 2021 as soon as possible.”

Need to examine reform measures

Congress is examining how to reform the bankruptcy code to limit corporations’ ability to avoid legal responsibility.  “Bankruptcy is there to help companies in trouble, but over time rich people in giant corporations have figured out how to game the system.  Johnson & Johnson has decided to join in on the abuse of our bankruptcy system to shield its assets and evade liability for the harm it has caused people across the country.  We can’t keep letting this happen and our Nondebtor Release Prohibition Act would enact criminal reforms to stop it,” said U.S. Senator Elizabeth Warren.  

Johnson & Johnson Considering Plan to Cap Asbestos Talc Liabilities

By

baby powder may contain asbestos

Reuters reports Johnson & Johnson (J&J) is considering a plan to cap asbestos talc liabilities from widespread Baby Powder and other talc lawsuits.

More than 30,000 plaintiffs alleged J&J’s talc products were unsafe. These women suffered from ovarian cancer, mesothelioma, and other cancers they assert were brought on by asbestos contained in J&J Baby Powder and other talc products. Asbestos exposure is known to be a carcinogen and unsafe at any level.

In 2018 a Missouri jury found in favor of talc victims awarding $4.7 billion damages to the women.  An appellate court reduced the award to $2 billion.  Last month, the US Supreme court denied J&J’s last attempt at an appeal by denying certiorari and leaving in place the Missouri verdict. 

A plan to cap asbestos talc liabilities

With anticipated legal action from tens of thousands additional victims, J&J is contemplating alternative legal remedies. Rueters is reporting the company is considering creating a new business entity. This new business would contain all the J&J talc liabilities, then subsequently file for bankruptcy. This “divisive merger” law is known as the Texas Two-Step and leaves victims unable to bring their claims to a jury. Instead,  their only remedy would be filing claims against the new bankrupt entity. 

While this is one plan to cap asbestos talc liabilities apparently under consideration, the Texas Two-Step is controversial and there remain challenges to its permissibility under US bankruptcy laws.

Did J&J know?

Talc and asbestos are often found in close proximity when mining. This brings about the need for extreme caution when using talc in products. In 2018, Reuters shared findings from their investigation into the possibility of asbestos contamination in J&J talc products. “Facing thousands of lawsuits alleging that its talc caused cancer, J&J insists on the safety and purity of its iconic product. But internal documents examined by Reuters show that the company’s powder was sometimes tainted with carcinogenic asbestos and that J&J kept that information from regulators and the public.”

Through many documents and testimonies, Reuter’s examination showed at “least 1971 to the early 2000s, the company’s raw talc and finished powders sometimes tested positive for small amounts of asbestos, and that company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public.”

J&J removed its Baby Powder from the US and Canadian markets in May 2020.

Will there be justice?

If J&J uses this dubious plan to cap asbestos liabilities, victims who have not settled their cases would find themselves in long and slow bankruptcy proceedings with a significantly reduced chance for compensation and the victims’ pursuit of full and unimpeded justice.

Industry Methods of Screening Talc for Asbestos Are Lacking

By

The Environmental Working Group (EWG) found by using electron microscopy, the cosmetic industry methods of screening talc for asbestos are lacking. Of the myriad cosmetics tested by the Scientific Analytical Institute (SAI), nearly 15% showed the presence of asbestos.

Methods of screening talc for asbestos are lacking

Incredibly, the Food and Drug Administration (FDA) doesn’t require testing for asbestos in talc. Though it may be “only” in trace levels there is no safe level of asbestos exposure.

Sean Fitzgerald, who leads the SAI based in Greensboro, NC, said, “It is critical that the FDA develop a rigorous screening method for talc used in personal care products. The lab repeatedly finds asbestos in products made with talc, including cosmetics marketed to children. Last year several children’s cosmetic products at Claire’s and Justice were found to contain asbestos. This includes products beyond cosmetics: children’s toys, crayons, chewing gum, and feminine hygiene as a few samples. It’s outrageous that a precise method for testing personal care products for the presence of asbestos exists, but the cosmetics industry isn’t required to use it.”

Why is asbestos often found in talc?

Rather than perform rigorous testing to verify there is no asbestos, the government promotes careful selection of mines to avoid asbestos contamination.

The talc and asbestos are often mined in close proximity and for industrial, cosmetic and a wide variety of other uses. This leads to potential intertwining in veins and a high possibility of cross-contamination. 

Why is asbestos a problem?

Science confirms there is no safe level of exposure to asbestos. The fibers contained in the asbestos are released into the air when the material holding them is disturbed. Inhaling these fibers can lead to serious diseases, such as lung and ovarian cancer, asbestosis, and the deadly mesothelioma. Talc products are often distributed as loose powders, a sure way to allow inhalation to anyone using them or in the vicinity.

Approximately 15,000 Americans die each year because of exposure to asbestos according to Scott Faber, Senior Vice President of the Environmental Working Group.

What’s next?

In March of 2019, Representatives Debbie Dingell (D-MI) and Jane Schakowsky (D-IL), introduced The Children’s Product Warning Label Act. This act required products marketed to children have a warning label declaring the product was not evaluated for asbestos content. To avoid the label, the product would require a written certification from the HHS Secretary that the product is from an asbestos-free mine and include proof to the FDA that the product is asbestos-free through testing by an electron microscopy method. At this time, there has been no action on the bill.

No other bills to increase testing for asbestos in talc products are pending.