🎧 Listen: In today's episode of The Journal podcast, AndrewScurria explains how Johnson & Johnson is resorting to a controversial legal maneuver to try to settle lawsuits claiming its baby powder caused cancer
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Juliet Chung: But Johnson's baby powder wasn't just for babies. The company also marketed it to women.Speaker 5: You'll feel a lot cooler if you're just using Johnson's baby powder.Speaker 6: You know the first time I ever used this?Speaker 8: Johnson's baby powder, a feeling you never outgrow from Johnson & Johnson.
Speaker 11: The core allegation regarding Johnson's baby powder is that it was dangerous to its users through two means according to plaintiffs who filed lawsuits.Speaker 11: One is that the talc contained microscopic amounts of asbestos, which is a naturally occurring mineral that is sometimes mixed in with the talc, which is mined from the earth and then put into baby powder.
Speaker 11: The company had been generally managing its exposure, so it was a problem for Johnson & Johnson, but not an enterprise threatening, business threatening litigation.Speaker 11: And they can't be brought as a class action because every individual's use of talc, their medical profile, their history, their diagnoses are all very particularized.
Speaker 11: And the only forum in the American legal system that can offer Johnson & Johnson that kind of finality for its current and future exposure is a bankruptcy court. Speaker 11: There's one person appointed in bankruptcy court called an FCR, a future claimant's representative, and that person's job is to negotiate the best possible deal they can on behalf of people who are not at the table.
Speaker 11: It's called the Texas Two-Step, which is what it's come to be known as colloquially among plaintiff's attorneys and defense attorneys.Speaker 13: This dance is Texas Two-Step. Now we're going to try this with the music. See how it goes.Speaker 13: Step together, walk, walk, feet together, walk, walk, feet together, walk. Whoa.
Juliet Chung: Johnson & Johnson's goal was to shield itself from all baby powder lawsuits. LTL's only meaningful asset is the financial backing of its parent, Johnson & Johnson. Juliet Chung: But the Texas Two-Step didn't work. Last week, the third circuit Court of Appeals decided they didn't want to dance and threw the case out. That's because according to the Appeals Court, LTL wasn't actually in financial distress.
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