Johnson & Johnson’s ‘Texas Two Step’ Needs a Conclusion

One of the most followed corporate trials of the decade is drawing nearer to a close. Johnson & Johnson’s Red River Talc subsidiary in Texas filed a third time for bankruptcy in the Southern District of Texas while a majority of affected plaintiffs have indicated they wish to settle. With more than 75 percent of plaintiffs on board, this case should be allowed to conclude instead of being held up by lawyers grasping for more cash.

In mid-August, a vote was held in another of the major baby powder cases where 83 percent of plaintiffs voiced their support for a whopping $6.5 billion settlement to be paid out over 25 years by LTL Management, J&J’s Texas-based subsidiary. About 61,000 lawsuits would be settled for 99.75 percent of the plaintiffs, leaving only a small amount of mesothelioma suits to be settled.

Now, it will be up to the judge to decide whether the settlement is appropriate and fair.

Though attorneys representing some of the victims in the case have supported the plan, others have decided to stick out the trial in the hopes of extracting a larger settlement. However, Johnson & Johnson’s recent commitments to increase the total amount of the settlement up to $9 billion may shore up more support for their proposal and boost the prospect of a final settlement among victims and their families.

Considering the tens of thousands of Americans involved in this case who claim injuries and cancer diagnoses, including many who’ve battled in the courts for years, the prospect of a resolution should bring relief and comfort. However, it is unclear whether that message will be pressed in court.

One lawyer in the case has warmed to the deal for his clients, but others are likely to seek an even larger payday that could come if they strike for a bigger deal and more delay. No surprise. It’s estimated that attorneys in this case could receive up to a third of the final settlement.

For years, Americans have seen hundreds of commercials related to baby powder cases used by attorneys to grow their roster of plaintiffs in the lawsuit.

This practice of mass tort advertising and recruitment is standard fare in today’s legal system and has been mainly responsible for delivering some of the largest settlements to date. However, many groups have warned that unchecked advertising could be creating more problems than solutions for vulnerable Americans.

The American Medical Association and the American Association of Retired Persons have made clear that “fear-mongering” legal ads are making elders reluctant to seek additional care. “Nothing could be more invidious than the exploitation of the aged. These pressures that plague older persons place their health in jeopardy and further deplete their reduced incomes,” said AARP’s founder, Ethel Percy Andrus.

Legal firms defend the practice as an effective method of reaching potential victims who may not otherwise know that a case exists, for which there is a kernel of truth.

After many years of delay and legal maneuvering, observers of the Johnson & Johnson case should have learned a few lessons about balancing plaintiff recruitment efforts and restoring faith in an otherwise bloated court system.

The voting mechanism by plaintiffs has proven to be an effective method to achieve a comprehensive settlement that will aid victims. We can only hope that the presiding judge will allow this settlement vote to be realized and seen through to its end.

Published in DC Journal (archive #1, #2)