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J&J’s first attempt to escape cancer claims with bankruptcy failed. Now it’s trying again

Johnson & Johnson’s first attempt at using bankruptcy to escape claims that its popular baby powder caused cancer was an expensive gamble that drew public scorn and ended in failure.

But on Tuesday, just hours after a judge officially ended that first effort, J&J tried the gambit again. The company put the same subsidiary that had been tossed out of bankruptcy court back into Chapter 11, this time with a plan to pay $8.9 billion to resolve the decades-old cancer claims. The move has already drawn the ire of some victim lawyers and raised eyebrows among legal scholars, who are asking why this time will be any different.

“They are taking a massive gamble here,” said Lindsey Simon, a University of Georgia law professor who has studied how corporations use the U.S. bankruptcy rules to resolve mass-tort suits. “This Chapter 11 case could very well go the same way as the first one did — kicked out of court.”

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J&J faces two major hurdles: it must survive any new legal challenge from opponents who are likely to argue the second case is just as flawed as the first,

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