Attorneys who have led the charge in litigating cancer claims against
J&J on Tuesday announced a $8.9 billion agreement with talc claimants as it placed subsidiary LTL Management LLC into bankruptcy for the second time. The proposed deal would compensate people who say J&J’s talc-based powders caused cancer, the company said.
The deal, which would pay claimants over the course of 25 years, would bring about a global resolution to the legal saga, J&J said. But many of the firms that have litigated against J&J on behalf of cancer victims for years, representing tens of thousands of claimants, say they were intentionally left out of the settlement. The proposal, they say, offers victims far less than they deserve.
“I strongly believe that the law firms that understand the case, the seriousness of the injury, the costs to the claimants in medical care, couldn’t possibly support something like this,” said Michelle Parfitt, a partner at Ashcraft & Gerel who as co-head of the talc litigation steering committee has helped oversee more than 40,000 claims during multidistrict litigation.
A group of 12 firms that agreed to the deal say they represent more than 60,000 claimants.
But plaintiffs attorneys involved in longstanding litigation against J&J have serious doubts about the validity of that figure. J&J’s previous attempt to use bankruptcy to resolve the mass tort litigation was rejected by the US Court of Appeals for the Third Circuit, and the opposing plaintiffs attorneys expect the company’s latest maneuver to fail as well.
The opposing lawyers say J&J should negotiate a larger settlement or, if the latest bankruptcy is dismissed, litigate individual claims.
J&J, in a news release, said the agreement “will equitably and efficiently resolve all claims arising from cosmetic talc litigation” against it. The company has long maintained that its talc products are safe and do not cause cancer.
“Our job is to get our clients fairly paid for their injuries, and this settlement is the culmination of a job well done,” Mikal Watts, whose firm, Watts Guerra LLC, leads the group of 12 firms supporting the proposal, said in a statement. His firm has been retained by more than 15,000 claimants, he said.
Not Enough Money
The firms backing the deal don’t include many that represented claimants on a key committee during the first bankruptcy, or most of the firms that have, for years, led multidistrict litigation against J&J. Claims against the company, which has been hit with large jury verdicts in favor of cancer victims in recent years, were consolidated in 2016 into an MDL.
“Those people have not signed on — and will not sign on — to something like this,” Parfitt said. “We oppose it. We strenuously oppose this plan, and we’ll fight it to the end.”
The proposal does not include enough money to cover the medical costs of cancer victims, said Chris Tisi, a member of the MDL steering committee who was also involved in the first bankruptcy.
”The settlement that was accepted by this group of lawyers was not commensurate with what J&J did,” Tisi, of Levin Papantonio Rafferty, said.
Supporters Laud Deal’s Speed
The 12 firms that have agreed to the proposal say it would allow claimants to be paid as soon as possible by preventing litigation from dragging on further.
“I applaud Johnson & Johnson on finding a fair and equitable solution which closes a painful chapter for a lot of American women,” Mark Lanier, whose firm, Lanier Law Firm, previously participated in an MDL steering committee, said in a statement.
Those who support the proposal say it offers speedy compensation—a major victory.
“When clients are dying they would like their money now,” said James Onder, whose firm OnderLaw LLC represents more than 20,000 claimants.
The prominent MDL firms opposing the deal stand to collect fees from their service on committees, he said.
“The objecting firms would make far more money on common benefit time in an MDL than they will ever make in fees on the cases from individuals they represent,” he said.
Onder’s firm represented a person on the talc claimant committee in the first bankruptcy. He said he also expected to collect fees for common benefit time, but stood to gain more from getting a good deal for his clients.
Onder said he’s confident that a deal will eventually receive support from the 75% of claimants needed to obtain bankruptcy court approval. Some firms are steadfastly against the current proposal.
“They will overwhelmingly vote against it,” said Jason Itkin, whose firm, Arnold and Itkin, represents more than 10,000 talc claimants.
A motion to dismiss the latest LTL bankruptcy will be filed soon, multiple lawyers said. Claimants are eager to again bring the case to the Third Circuit, which struck down LTL’s first bankruptcy, they said.
Lawyers opposing the deal were skeptical of J&J’s claim that LTL has commitments from over 60,000 claimants. Those claims could be invalid for any number of reasons, including if they involve a type of cancer that’s not covered by the proposed settlement, they said.
Some attorneys said Watts and other firms that signed onto the new deal were not involved in the original litigation push against J&J.
“It’s clearly an end run around leadership and those that have been in the trenches litigating these cases for a long time and are committed to getting reasonable value for their claimants,” Andy Birchfield of Beasley Allen, whose firm represents more than 10,000 claimants, said. “This is an end run to try to force through a settlement that would bring discounted value to the claimants.”
—With assistance from Alex Wolf
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