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US judge rejects J&J's $10 billion baby powder settlement

ReutersApr 1, 2025 12:34 AM
  • J&J proposal would end lawsuits linking its baby powder to ovarian cancer
  • J&J's two previous attempts at a bankruptcy deal failed in other courts

NEW YORK, March 31 (Reuters) - A U.S. bankruptcy judge on Monday rejected Johnson & Johnson's JNJ.N $10 billion proposal to end lawsuits alleging that its baby powder and other talc products cause ovarian cancer, marking the third time the company's bankruptcy strategy has failed in court.

J&J has been attempting to resolve the lawsuits through a subsidiary company’s bankruptcy, after two previous bankruptcy attempts failed in other courts. But the judge overseeing its case, U.S. Bankruptcy Judge Christopher Lopez, said that the company did not belong in bankruptcy.

"While the Court’s decision is not an easy one, it is the right one," Lopez wrote. "The Court hopes something gets done for J&J, Red River, and claimants who also want finality on their cases."

J&J argued that the third proposal, in Texas bankruptcy court, should succeed because there is more money on the table and the deal is supported by a majority of cancer victims who voted on it.

Opponents of the deal, including attorneys for some cancer victims and a government bankruptcy watchdog, had argued that the third bankruptcy, like the first two, should be dismissed because the company is not in “financial distress.” A wealthy company like J&J should not use bankruptcy to prevent cancer victims from having their day in court, opponents said.

J&J faces lawsuits from over 60,000 claimants alleging that its baby powder and other talc products contained asbestos and caused ovarian cancer, which the company denies. The settlement would have ended those lawsuits and prevent similar lawsuits from being filed in the future.

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