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Johnson & Johnson Talc Spinoff Files for Bankruptcy Protection

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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

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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.

Over 100 Firefighters Possibly Exposed to Asbestos

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possible asbestos exposure

More than 100 firefighters and civilians were possibly exposed to asbestos in Austin, Texas. The potential exposure came while fighting a 3-alarm fire in a city-owned abandoned warehouse.  Through a survey contracted by the Building Services Department in 2013, asbestos was discovered in three buildings on the property. It was found in drywall, ceilings, flooring and floor adhesive in all three buildings, including the warehouse that burned. Preparation to demolish all these buildings was underway before the fire.

Firefighters were not aware they were possibly exposed to asbestos

Until the third alarm unit arrived on the scene, the firefighters and civilians were unaware of the possibility of asbestos. The incident report stated, “Although best precautions were taken to avoid exposure after notification, the fire was very significant and the smoke produced from the fire swirled throughout the fireground with multiple shifts in the wind while units were on scene. All firefighters and civilians on the fireground could have a possible exposure to asbestos.” 

Dangers of asbestos exposure

Asbestos is a highly carcinogenic mineral. Its microscopic fibers can embed in lungs when inhaled. This can lead to lung cancer, asbestosis, and mesothelioma. All three diseases are harmful, but mesothelioma has no cure at this time and is fatal. It can take many decades after exposure before a victim is diagnosed.

Buildings, commercial and residential, often contained asbestos. It was a common building material until the early 1980s. It was in shingles, insulation, ceiling tiles, tile mastic and many other materials. If asbestos remains undisturbed, the fibers are not released. However, with remodeling or an accident, such as this fire, airborne fibers may lead to a possible exposure to asbestos. Removing asbestos requires abatement professionals. There is no safe level of exposure.

Firefighters deserve respect

Asbestos is not the only danger firefighters’ encounter. From falling structural pieces, to unknown chemicals or other hazardous materials stored inside, to environmental factors such as wind and storms, they remain focused. The president of the Firefighters Cancer Support Network, Bryan Frieders, said “firefighters are in danger and can be exposed to up to 200 cancer causing chemicals when they go into a burning building. Yet we still see firefighters on a daily basis going into these known-dangerous situations to try to save lives.”

Frieder said, “A lot of retirees two, three, four or five years after they retire are being diagnosed [or decades in the case of asbestos]. That’s a significant problem for us. They took an oath to serve the city they are serving. There is an expectation that the city they are serving is going to take care of them — and their families.”

The firefighters exposed in this fire were given chest X-rays as a baseline in case they develop lung problems in the future.

Cause unknown

A film crew had recently vacated the building. Employees of Building Services inspected the building three hours before the fire started. At the time of the fire, officials didn’t know exactly what, if anything, was stored in the building. Currently, the cause of the fire is unknown.

Earth Day 2021: Restore Our Earth

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Earth Day began on April 22nd, 1970 in the United States. Since then it has occurred annually for 50 years. It is now observed by a billion people in 192 countries. Each Earth Day adopts a theme; this year it is Restore Our Earth. But what do we do with that theme? Five pillars of action were pinpointed by earthday.org.

Five Pillars of Earth Day

• The Canopy Project – reforests places in urgent need of rehabilitation. This is often in communities at risk from climate change and dreadful environmental conditions.

• Foodprints for the Future – studies what impact growing, producing, transporting and storing food has on various factors: natural resources used, to resulting pollution, to the emissions of greenhouse gases.

• The Great Global Cleanup – inspires people to shrink and remove waste in their environment. Incredibly, “270,000 people die prematurely every year from uncontrolled burning of household waste, and two billion people live without any waste collection services.”

• The Climate and Environmental Literacy Initiative – complements civic education, works to create jobs, while building a green consumer market. It also assists the public in participating significantly with their governments about environmental issues.

• Global Earth Challenge – uses volunteers to aid in scientific research by monitoring threats to the environment and to human health within their communities. Through an open platform, researchers can access high-quality data for assessment of international policies, such as the UN Sustainable Development Goals (SDGs).

Earth Day 2021 in the United States

President Joe Biden will host a global summit in observance of 2021’s Earth Day. Earthday.org will present a range of activities and events to spotlight “climate and environmental literacy, climate restoration technologies, reforestation efforts, regenerative agriculture, citizen science and clean ups taking place around the globe.”

What can you do?

Earthday.org invites everyone to participate in Earth Day 2021 in some way. “It is up to each and every one of us to Restore Our Earth – not just because we care about the natural world, but because we live on it. We all need a healthy Earth to support our jobs, livelihoods, health & survival, and happiness. A healthy planet is not an option – it is a necessity.”

For suggestions on how you can help, visit this earthday.org page for ideas. Though we focus on this particular “day”, participation in these activities can be any, or every, day of the year. Whether the size of your participation is small or large, you do make a difference.

Global Asbestos Awareness Week

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Easily inhaled asbestos fibers

The theme of the 2021 Global Asbestos Awareness Week is “One Word. One Week. One World.” Since 2005, the Asbestos Disease Awareness Organization (ADAO) has hosted a week of education and action to end the use of asbestos. Though the dangers of asbestos have been known for decades, there remains a need to educate the public and those in office who can make a difference in its importation and use. April 1-7 of each year we are reminded that this danger still exists and threatens lives. Since the first Global Asbestos Awareness Week in 2005 until today, it is estimated 600,000 Americans lost their lives to asbestos-caused illnesses.

U.S. Senate passed 16th resolution for “Global Asbestos Awareness Week”

The Senate once again formally recognized the need for public exposure to the dangers of asbestos. Linda Reinstein, mesothelioma widow and ADAO co-founder, congratulated the Senate for the passage of S. Res. 145. Reinstein wrote, “We are grateful to Congress for passing this resolution and once again putting the dangers of asbestos exposure on the national radar, but we must do more.” She further emphasized, “With this continuation of use and an increase in imports, awareness of the dangers of asbestos, and an eventual ban on imports and use, are more important than ever. Unlike the more than 70 countries that have banned asbestos, Americans remain at risk of asbestos exposure every day from a variety of places, including our schools, homes, workplaces, and from unsuspecting products on consumer shelves like toys and cosmetics.”

What are the dangers of asbestos?

Asbestos is a mineral that can be used in the manufacture of many products, including insulation, shingles, brake pads, tile mastic, cosmetics and hundreds of other uses. Though it’s been known for over a century that asbestos exposure can be deadly – no matter the level of exposure ­– there is still no ban in the United States.

Inhalation of asbestos causes a spectrum of diseases including asbestosis, lung cancer and mesothelioma. There is currently no cure for mesothelioma – a disease which can be caused by even brief or intermittent asbestos exposures. 

How can Global Asbestos Awareness Week help?

Each year, goals are set to push forward the asbestos banning agenda. This year there are four main points:

            • Banning the mining, manufacturing, and use of asbestos

            • Preventing asbestos exposure

            • Increasing compliance and enforcement of existing laws and regulations

            • Strengthening international partnerships

Reinstein reported, “The United States imported nearly 30 percent more asbestos in 2020 than in the prior year. With this continuation of use and an increase in imports, awareness of the dangers of asbestos, and an eventual ban on imports and use, are more important than ever.”

What can you do to help?

If you suspect asbestos in your home or business built before 1980, have an abatement professional inspect before any remodeling or disturbance of the material. If you’ve been exposed, let your doctors know so they can create a baseline and monitor you for signs of asbestos disease.

During this Global Asbestos Awareness Week, let your congressional and senatorial representatives, as well as the Environmental Protection Agency (EPA), know your concerns and the need for a ban. This is long past due; let’s make it happen!