Some plaintiffs’ lawyers representing tens of thousands of women claiming that Johnson & Johnson talc powder caused their ovarian cancer have asked a Houston judge to give them a second chance.
In three separate motions filed Monday and Tuesday, lawyers representing different groups of women asked U.S. Bankruptcy Judge Christopher Lopez to reverse his March 31 decision to dismiss the Chapter 11 bankruptcy petition filed by Red River Talc, a subsidiary of J&J, but to allow the parties to either fix the flaws in the previous petition or to send the entire case to mediation.
The motions filed by the three groups are not surprising since all three supported the previous $9 billion settlement proposal made by J&J.
But a separate group of lawyers who also represent more than 20,000 women, including 465 in the Dallas area, told The Texas Lawbook Wednesday that this new effort to reopen the bankruptcy is just another attempt by J&J “to apply maximum financial pressure on cancer victims and their families” to force a settlement that is unfair to those who are suffering. Those lawyers claim that J&J is behind these renewed efforts to keep the proceedings in bankruptcy court alive.
“The company has had numerous opportunities to resolve these claims but instead, insisted on a take-it-or-leave-it approach aimed at forcing unreasonably low settlements on women already suffering from life-threatening illness and financial hardship,” said trial lawyer Andy Birchfield. “It is time to end the delay, the division, and the coercion.”
Judge Lopez rejected J&J’s bankruptcy because of “multiple flaws” in how the company solicited support among the alleged victims and because of evidence of significant voting irregularities that occurred during J&J’s efforts to get at least 75 percent of the women with claims to approve the proposed agreement.
In a motion filed Tuesday, Texas trial lawyer Mikal Watts said he agreed with Judge Lopez’s ruling that the voting process by J&J was flawed but asked the judge to reverse his order dismissing the Chapter 11 petition and instead send the dispute to mediation.
Watts, who represents Heather Velasquez and hundreds of other plaintiffs and potential plaintiffs, said mediation “is the only way this court can deliver justice to both the debtor and tens of thousands of its talc victims.”
“Given the vitriolic relationship between the competing parties, communication to resolve disputes has been absent during this litigation,” Watts wrote in the six-page motion. “Before this court expends more of its judicial resources litigating disputes, a powerful voice is needed to try to bring the parties together.”
Watts recommended former U.S. District Judge Layn Phillips of the Western District of Oklahoma, who is now a mediator.
“Given the good faith efforts of all the parties and the incalculable delay coming in the tort system after a final dismissal of this bankruptcy case, a do-over in this court is in order,” Watts wrote.
The motion filed by Watts, however, does not mention whether the court-ordered mediator would be allowed to put all issues, including revising the terms of the settlement agreement or increasing the settlement amount, on the table for discussion.
In a separate motion filed Monday on behalf of plaintiff Rhonda McKey, lawyers for Dallas-based Haynes Boone asked Judge Lopez to revisit his decision to dismiss the J&J bankruptcy because they said his “concerns are not insurmountable but instead can be cured through amendments to the plan and re-solicitation of such plan.”
Haynes Boone partner Charles Beckham, in a 14-page motion filed Monday, said J&J officials “have indicated that they are amenable” to amending their proposed settlement and conducting a new vote that followed Judge Lopez’s guidelines.
Beckham points out that his client, McKey, is suffering from Stage III ovarian cancer caused by J&J’s talc powder and that dismissing the bankruptcy case “is a manifest injustice” to her case.
“Dismissal leaves talc claimants, like Ms. McKey, with no choice but to return to the tort system where they must get in line with approximately 90,000 other current claimants,” the motion states. “Having to do so means that Ms. McKey will likely not obtain a timely financial recovery, if any recovery at all. Dismissal is a deprivation of substantive rights — elevating form over substance. The bankruptcy case is the last chance for Ms. McKey to have her claims resolved within a humane timeline.”
Watts and the other plaintiffs lawyers who support the settlement with J&J contend that “justice argues for allowing this good-faith debtor and its various good-faith creditors to fix the unfortunate voting problems” cited by Judge Lopez by “permitting a revised resolicitation process.”
Such an order would not need to stay any of the talc cancer cases against J&J currently heading toward trial.
“Frankly, this voting process would be complete before the first trial in the tort system will be ready to begin,” Watts wrote. “The parties now before this court can simultaneously begin to walk inside the tort system while still chewing gum here in the bankruptcy system. Frankly, the women victimized by talc deserve this effort at a dual-track approach.”
But Birchfield, a trial lawyer from Alabama, disagreed that J&J has acted in good faith and said that Judge Lopez’s ruling dismissing the bankruptcy was the correct decision.
“At every turn, J&J has refused to engage in genuine negotiations, choosing instead to apply maximum financial pressure on cancer victims and their families,” Birchfield said. “We are ready and willing to engage in negotiations to reach a fair and just global resolution, but mediation is meaningless unless J&J is finally prepared to negotiate in good faith. So far, there is no sign of that.”
The case is In re Red River Talc, Southern District of Texas, No. 24-90505.