Although talcum powder studies are ongoing, it has been established that some products that use talcum powder may contain small amounts of asbestos. And there’s a well-known link between asbestos and cancer (especially mesothelioma).

So where does Johnson & Johnson come in? Well, they’ve been one of the more prominent defendants in these talcum powder/asbestos cancer lawsuits. Let’s take a quick look at the baby powder litigation and then examine how Johnson & Johnson is planning to use something called “Project Plato” to deal with their recent legal and financial losses.

A Brief History of Johnson & Johnson’s Baby Powder Litigation

In 2018, Reuters published a story claiming that Johnson & Johnson (J&J) knew its baby powder products used talc that contained asbestos. In 2019, J&J voluntarily recalled some of its baby powder being sold in the United States.

A lot of people sued J&J and/or related entities claiming the products they used containing talc (such as baby powder) caused their cancer. Many of these cases are currently in the Johnson & Johnson Talcum Powder Litigation MDL, or multidistrict litigation, which is currently in New Jersey federal court.

A few of the cases against J&J have resolved, resulting in massive verdicts in favor of the plaintiffs. One of the most notable was a case from St. Louis where 22 women successfully sued J&J in 2018 and were awarded more than $4 billion in damages. On appeal, this amount was reduced to about $2 billion. Still, a remarkable amount.

As of 2021, J&J faced approximately $3.5 billion in legal settlements and judgments relating to its baby powder. This was bad enough, but it was just the beginning for J&J, with tens of thousands of cases still remaining. Seeing the writing on the wall, J&J allegedly thought of a new strategy to handle these lawsuits and gave it the code name Project Plato.

How Project Plato Works

Project Plato is a very clever strategy that takes advantage of federal bankruptcy and state corporate laws. The goal is to pay off baby powder cancer litigants for pennies on the dollar and prevent J&J from having to worry about future plaintiffs. The plan is still ongoing and it’s unclear if it’ll work as J&J plans, but here’s a rough overview of the process.

For step one, J&J shifted its headquarters to Texas. The reason would be to take advantage of one of Texas’ corporate laws that allows a corporation to divide itself into two or more companies through a process called a “divisive merger.”

In step two, J&J created a subsidiary called LTL Management. This would take on J&J’s legal liabilities relating to the baby powder asbestos litigation. However, it would have a relatively small number of assets to pay any legal awards or settlements. The rest of J&J would continue operating as the second company, yet it would no longer have to worry about any lawsuits from the talcum powder litigation.

The third step required LTL Management to file Chapter 11 bankruptcy, which it did almost immediately after being created.

Project Plato is currently in step four, which involves getting the automatic stay to temporarily halt the talcum powder litigation against J&J. It’s also during step four that J&J hopes the bankruptcy judge will approve LTL Management’s Chapter 11 bankruptcy reorganization plan which has a few special terms.

Namely, all baby powder cancer plaintiffs against J&J would have to make their case in bankruptcy court (instead of regular court) and fight for their share of $2 billion that J&J would give LTL Management to compensate the almost 40,000 current plaintiffs.

J&J would also get a non-debtor release, which would immunize it from getting sued by any future plaintiffs claiming they got cancer from using J&J’s baby powder or talcum-based products. So the $2 billion wouldn’t just be split among the almost 40,000 in current plaintiffs, but it would also be all that’s available for future plaintiffs, too.

J&J reasons that this plan makes it more likely that plaintiffs who go to court for financial compensation for their injuries will get at least something. J&J contends that getting an almost guaranteed small amount of money is better for plaintiffs because they can avoid the risk of losing at trial. It would also give J&J finality to its baby powder legal woes. If successful, Project Plato would allow J&J to move on without constantly worrying about another talcum powder lawsuit decades from now.

Project Plato is a slight variation of something called the Texas Two Step, which has been successfully used by several companies (like Georgia-Pacific) looking to reduce and offload their mass tort legal claims.

Will J&J’s Plan Work?

No one knows for sure. Right now, the case isn’t going as well as J&J would have hoped. When LTL Management filed Chapter 11 bankruptcy, it chose to do so in North Carolina. Why? Because of that state’s history of favorable judicial rulings involving the Texas Two Step strategy. However, the North Carolina judge transferred the case to New Jersey.

As you can imagine, the plaintiffs aren’t happy about Project Plato and are doing everything they can to stop it. The New Jersey bankruptcy judge has scheduled a hearing for February 14, 2022 to listen to arguments from the plaintiffs (who are technically creditors in this bankruptcy proceeding) as to why the court should dismiss LTL Management’s request for bankruptcy.

Their primary argument would be that LTL Management filed Chapter 11 bankruptcy in bad faith. Specifically, that it was done as a way for J&J to avoid paying out the massive legal settlements and court judgments that have already been handed down, and with many more anticipated in the future.

A possible good omen for plaintiffs in the J&J litigation is what’s been happening with Purdue Pharma’s litigation involving its alleged role in the opioid epidemic. Late last year, a judge rejected Purdue Pharma’s proposed settlement and bankruptcy reorganization plan. The settlement and reorganization plan involved non-debtor releases that would have protected key individual defendants from personal liability. While Purdue Pharma’s strategy wasn’t the same as Project Plato, it was similar in that it tried to use the Bankruptcy Code to limit its legal liability in its civil lawsuits.

What Happens Next?

Over the next few months, we’ll see if Project Plato works for J&J. If it does, it would create a blueprint for any other company that faces mass tort lawsuits. This would make it much harder for plaintiffs to obtain compensation for their injuries. There’s even a proposed law in Congress to ban what J&J is trying to do.

In the meantime, if you have any questions as to whether you can receive compensation for injuries potentially related to using baby powder or other talc-based products, don’t hesitate to get in touch with me. And I’ll let you know if there are any major developments in J&J’s Project Plato.

delivered a huge verdict to the victims of the DePuy Pinnacle artificial hip. In this fourth bellwether trial, the jury awarded $247,000,000.00 to six plaintiffs and their spouses. According to news reports, after a two-month, hard-fought trial, the jury found that DePuy Orthopaedics and parent company Johnson & Johnson were liable to plaintiffs for the Pinnacle’s design and manufacturing defects. But the jury went further, concluding that the actions of the companies were fraudulent and deceptive, and that they had acted recklessly and maliciously in manufacturing, selling, and promoting the flawed products.

These last terms have special meaning in law: findings of fraud, deception, recklessness, and malice indicate that the companies went beyond mere negligence, that the defendants misbehaved intentionally or with a reckless disregard to the fact that their actions would harm innocent people. Because of these special findings, the plaintiffs were entitled to receive “punitive damages” from DePuy and J&J, which are money damages intended to punish defendants for especially bad behavior.

The jury awarded $90 million dollars in punitive damages to be paid by J&J, and $78 million in punitive damages to be paid by DePuy. That’s $168 million in total punitive damages. It is a lot of money.

The jury also awarded “compensatory damages” for the six individual plaintiffs. These are damages meant to compensate individuals for actual injuries. The jury awarded $77 million for such actual injuries as pain and suffering, past and future medical expenses, and other damages. This money award will be divided among the six plaintiffs based on an agreement among the parties.

Finally, the jury awarded the four spouses in the bellwether case “loss of consortium” damages of $1.7 million. Loss of consortium is a claim that arises when a spouse or close family member of the person injured by the defendants suffers separate losses, such as a loss of companionship or intimacy.

The jury in this case found DePuy and J&J intentionally misrepresented the product to the surgeons who would go on to implant the defective devices in patients. The jury also found that the defendants fraudulently concealed important information from the plaintiffs and their surgeons. The jury found that DePuy and J&J failed to adequately warn the plaintiffs and their surgeons about the risks involved in using the artificial hip. Finally, the jury found for the plaintiffs with the claims of design defect, manufacturing defect, and several claims of negligence.

It was another big win for the victims of the DePuy Pinnacle artificial hip.

Fourth Bellwether Trial Was Contentious From the Start

Before the case even started, Defendants asked the Fifth Circuit Court of Appeals to stop the fourth bellwether trial on the grounds that the defendants did not waive their objections to holding the trial outside New York, which is where the plaintiffs lived. In multi-district litigation, the MDL is not permitted to try any case where venue is not otherwise proper unless the parties waive their objections to the improper venue. The DePuy Pinnacle MDL Judge Kinkeade ruled that Defendants had waived their objections to trying the case in the MDL court.

In reviewing the defendants’ writ of mandamus, two of three judges on the Fifth Circuit found that Defendants had not waived their objections. The Fifth Circuit encouraged but did not require that Judge Kinkeade postpone the fourth bellwether trial. Judge Kinkeade decided to move forward with the trial, but this will surely be one ground for appeal by DePuy and J&J.

At the trial Plaintiffs argued that DePuy and J&J rushed the medical device to market, failed to undertake adequate premarket studies, did not provide sufficient warnings about the dangers of the hip implants, and defectively manufactured these MoM artificial hips. Defendants countered that the Pinnacle hip is safe and that the failure rates are in line with industry standards.

Several weeks into trial a startling allegation emerged: that a lawyer for DePuy may have tried to influence the testimony of a surgeon who treated three of the plaintiffs. Dr. David Shein submitted an affidavit on October 14, 2017 stating that a DePuy sales rep was being pressured by DePuy lawyers regarding Dr. Shein’s upcoming trial testimony. Dr. Shein reported that the sales rep said the DePuy lawyers were “on him like crazy” and were putting “big time pressure” on him. According to Dr. Shein’s affdavit, the sales rep stated that “there could be ramifications” for Dr. Shein based on his testimony in the Depuy Pinnacle trial.

Judge Kinkeade ordered an investigation by the FBI and the U.S. Attorneys’ Office. Following a hearing on the issue, Judge Kinkeade denied plaintiffs’ request to introduce the allegation of witness tampering to the jury. The judge decided that there was insufficient evidence that tied DePuy and Johnson & Johnson to the alleged actions of their lawyers. It also appears the DePuy sales rep backed off some of his most alarming comments reflected in the affidavit.

You can read more about the alleged witness tampering here.

Three Pinnacle Hip Bellwether Trials Have Resulted in Huge Awards for Plaintiffs

On March 17, 2016, in the second bellwether trial, a Texas jury awarded five plaintiffs $502,000,000.00, which included $360 million in punitive damages, for the injuries the plaintiffs sustained after the DePuy Pinnacle failed. The jury concluded that the Pinnacle hip sold by DePuy was defective and that DePuy knew about the flaws but did not warn patients and their doctors of the risks.

On December 1, 2016, in the third bellwether trial, the jury awarded six plaintiffs $1,041,311,648.17, which included $28,311,648.17 in compensatory damages and $4,000,000.00 in loss of consortium damages to the spouses of four of the plaintiffs. Finally, the jury awarded $1,008,000,000.00 in punitive damages total for the plaintiffs, and $1,000,000.00 in punitive damages for the four spouses.

With the fourth bellwether trial now complete, three juries have now awarded $1.79 billion dollars in consecutive bellwether trials. Plainly, several juries have concluded that DePuy and J&J acted with reckless disregard to the safety of innocent people, who simply needed a functioning, non-defective artificial hip.

I believe it is past time for DePuy and J&J to come to the table and offer to settle the thousands of DePuy Pinnacle cases that remain in this litigation.

If you have a DePuy Pinnacle hip that may have failed and injured you, give me a call today.