Judge to rule on motion to discontinue Johnson & Johnson’s talk claims

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Bottles of Johnson & Johnson baby powder line a drug store in New York October 15, 2015. REUTERS / Lucas Jackson // FILE PHOTO

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Nov. 10 (Reuters) – A U.S. judge is expected to announce Wednesday whether Johnson & Johnson (JNJ.N) will continue to face tens of thousands of claims that its baby powder and other talc-containing products caused mesothelioma and ovarian cancer.

The pharmaceutical giant is betting on a ruling that would halt ongoing litigation as part of its legal strategy to move its talc liabilities to a newly formed subsidiary and bankrupt it.

J&J, which claims its talc products are safe, has already spent nearly $ 1 billion defending itself on talc-related lawsuits. Settlements and judgments have cost it about $ 3.5 billion more, although it has caught on in some cases.

US bankruptcy judge Craig Whitley is expected to rule in a hearing on the Chapter 11 bankruptcy case of the new J&J company LTL Management LLC in Charlotte, North Carolina.

LTL has asked Whitley to extend the litigation protection normally afforded to bankrupt companies to the non-bankrupt parent company.

LTL has argued that continuing litigation against J&J would defeat the purpose of the bankruptcy, which would allow the company to consolidate and resolve all of its 38,000 or so Talk-related claims.

However, some of the plaintiffs suing J&J argue that it should not be able to reap the benefits of bankruptcy protection without filing for bankruptcy itself and that closing the litigation would prevent them from spending their day in court. An important case that has been pending for five years is about to be tried.

A J&J spokesperson did not immediately respond to a request for comment.

Whitley said last week that he is likely to issue a decision on LTL’s motion to suspend J&J at the end of a trial on a separate but related matter: whether to leave the case with his court or move it to another location will.

A state bankruptcy judge and people suing J&J over its talc products have sent the case to New Jersey, where J&J is based and where much of the talk dispute is being consolidated in federal court.

Reporting by Maria Chutchian, editing by Alexia Garamfalvi and Aurora Ellis


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