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Johnson & Johnsons Plan to Limit Compensation to Talc Plaintiffs Revealed

Once again leading the charge, Reuters issued a special report detailing the bombshell story of how Johnson & Johnson strategized the plan to limit compensation to asbestos talc victims.

Back in 2018, Reuters published an investigative report concluding that “Johnson & Johnson knew for decades that asbestos lurked in its Baby Powder”. In the past year, Reuters also broke the story that J&J was exploring their bankruptcy options in July 2021, foreshadowing their dodging of accountability ahead.

Now J&J’s internal company memos confirm how the healthcare and consumer-goods conglomerate planned to freeze all litigation and instead have plaintiffs seek compensation through a bankruptcy process.

For the past several years, tens of thousands of victims of asbestos-related cancers have filed lawsuits against J&J alleging negligence in exposing individuals to asbestos-contaminated products. In October 2021, in an effort to further shield their liability and protect their corporate assets from claims, J&J bankrupted the newly created subsidiary they formed to handle their talc claims by invoking a dubious legal loophole known as the Texas two-step.

Earlier this month, J&J’s bid to block Reuters from publishing the story about its confidential company documents was denied. Reuters spokesperson issued a statement that they “will continue to report without fear or favor on matters of public interest.”

The documents revealed J&J’s concern with how the subsidiary’s bankruptcy would effect their stellar credit rating and also their attempt to limit the “large and growing amount of talc cases – some with ‘lottery-size’ awards [which] put J&J’s consumer products business in ‘financial distress’.”

According to legal expert, Melissa Jacoby, “Such a precedent could allow companies to routinely pursue related-party bankruptcies to escape accountability from juries. If a company as deeply pocketed as J&J can do this, where does it stop?”

As revealed in the memos, J&J’s strategy essentially amounts to an “alternative justice system” and provides a blueprint for corporations’ intent on employing increasingly evasive tactics to limit their legal liability.

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