Johnson & Johnson[“J&J”] continues to make headlines for all the wrong reasons. J&J has recently taken some multi-million dollar beatdowns in courtrooms across America, as a result of countless lawsuits where it is alleged J&J knowingly marketed talc powder contaminated with asbestos to American consumers for years. And in 2022, J&J had another inspiration – sue the scientists that published papers linking the talc to cancer and other health issues.
In 2020, Dr. Jacqueline Moline, the Chair of Occupational Medicine at Northwell Health, published a study where she asserted that 33 individuals stricken with mesothelioma had no other exposure to asbestos – apart from exposure to J&J talc. Not long thereafter, some company named LTL Management(?) sued Moline for fraudulent scientific studies.
But who is LTL Management?? Excellent question. And to understand who LTL is, you need to understand the “Texas Two-Step” – a time honored bankruptcy sleight of hand corporations use to avoid paying for their misdeeds. In the abstract, the Texas Two-Step is a pretty simple. Step 1 involves a large corporation being sued for a deadly product creating a subsidiary and then transferring all those lawsuits to that subsidiary. Step 2 involves the subsidiary declaring bankruptcy. The injured parties are then forced to accept miniscule settlements due to the bankruptcy.
In 2021, a Missouri jury awarded $2 billion to a class of 22 plaintiffs who had developed ovarian cancer after using contaminated J&J talc. J&J knew the Missouri verdict was a harbinger of some very bad verdicts. So shortly after the Missouri verdict, J&J formed LTL Management. J&J then assigned all of its talc liabilities to LTL. J&J retained all J&J operating assets. Then J&J entered into a funding agreement with LTL where it agreed to cover talc and bankruptcy related expenses up to just under $62 billion. Two days later, LTL filed for bankruptcy. [Thankfully the LTL bankruptcy was later dismissed when the Court determined that LTL was not actually in financial distress].
LTL was still around in 2022, when it sued Dr. Moline in New Jersey. LTL asserted that one of the 33 patients had been exposed through his employment. LTL sued Moline claiming Moline was guilty of fraud and disparagement of J&J baby powder.
Yesterday, Judge Georgette Castner found that Dr. Moline did not engage in fraud when she published the paper and that the conclusions in her 2019 paper were protected by her free speech rights under the First Amendment. The LTL lawsuit was dismissed.
Was J&J really concerned about “disparagement” of its talcum product? Doubtful. There are 61,000 lawsuits currently disparaging the talcum product in courthouses all over America. The disparagement ship has long since sailed. J&J’s motives were considerably more sinister – intimidation of those who doctors and scientists who are provide the evidence needed to hold J&J accountable. Will there be similar lawsuits against plaintiff experts in the future? Almost certainly. J&J has demonstrated that can always go lower.
