Johnson & Johnson will seek the Supreme Court’s review after a federal appeals court declined to revive the company’s bid to use chapter 11 bankruptcy to freeze nearly 40,000 lawsuits linking its talc products to cancer, WSJ Pro Bankruptcy reported. J&J said that it would turn to the nation’s highest court after judges on the Third U.S. Circuit Court of Appeals in Philadelphia voted Wednesday against having the entire appellate court reconsider a January ruling by a panel of judges dismissing the chapter 11 case of J&J subsidiary LTL Management LLC. J&J created the LTL subsidiary in 2021 and placed it in chapter 11 to move mass talc-injury lawsuits the business faced to bankruptcy court for resolution. While the parent company didn’t file for chapter 11, LTL’s bankruptcy filing opened a path to freezing the talc lawsuits against its affiliates, including J&J itself. Other profitable companies have used the same strategy, known in legal circles as the Texas Two-Step, to try to address mass cancer litigation. Wednesday’s ruling means J&J’s hopes for reviving its talc subsidiary’s chapter 11 case now depend on the U.S. Supreme Court, which takes only a small fraction of the petitions it receives.
