Houston Republic

The Wall Street Journal editorial board said developments in a proposed settlement in Texas court involving long-running mass tort litigation against Johnson & Johnson (J&J) show “how the tort system is an unjust legal mess.”

“If at first you don’t succeed with a bankruptcy attempt, try, try again,” wrote the editorial board on March 2. “That’s the strategy Johnson & Johnson is using as it tries to get out from under claims blaming its baby powder for medical problems. The case shows again how the tort system is an unjust legal mess.”

“The scene is playing out in U.S. bankruptcy court in the Southern District of Texas, where J&J subsidiary Red River Talc is seeking approval for a “prepackaged” bankruptcy agreement,” wrote the board. “Under the deal, the company would provide a trust to cover the claims of some 93,000 plaintiffs who say baby powder is responsible for their ovarian or other gynecological cancer.”

Red River Talc LLC filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas in Sept. 2024. 

The agreement being considered in Texas court could allow the company to resolve more than 62,000 lawsuits. 83% of current claimants have expressed support for this plan, exceeding the 75% approval threshold required by U.S. bankruptcy code.

The agreement would “give each claimant an average recovery of between $75,000 and $150,000 to settle any alleged injury” and “provides that the company would create a trust and fund it over the next 25 years with more than $9 billion,” wrote the editorial board.

While most of the attorneys representing plaintiffs in the lawsuit have approved of the agreement, some holdouts are delaying approval. 

The editorial board wrote these holdout attorneys are “preferring to wait for jackpot jury verdicts.”

“If the point of the bankruptcy code is to resolve problems fairly and pragmatically,” then the court should approve the agreement, wrote the Editorial Board.