A federal judge on Thursday dismissed a lawsuit brought by five individuals who accused Johnson & Johnson of defrauding talc claimants by repeatedly routing liabilities into a shell entity and using bankruptcy proceedings to stall or limit recovery.
The complaint alleged that the corporate maneuver was intended to place "billions of dollars out of plaintiffs’ reach in order to 'hinder, delay, and defraud these women and prevent them from ever having their day in court.'" The claim is part of the broader, long-running dispute over J&J’s previously sold talc-based baby powder and other talc products, which dozens of thousands of plaintiffs contend contained asbestos and caused ovarian and other cancers. J&J maintains its talc products are safe, free of asbestos and do not cause cancer.
U.S. District Judge Michael Shipp, who also oversees the consolidated multidistrict litigation that includes more than 67,000 suits against J&J, concluded the five plaintiffs could not show they were harmed by the pauses in litigation that occurred while bankruptcy processes were pending. Those delays, the court noted, blocked the plaintiffs’ individual cases from moving forward during the period from October 2021 through March 2025.
In his ruling, Judge Shipp called the plaintiffs’ asserted injury "entirely hypothetical, as it is contingent on plaintiffs’ first prevailing in the talc litigation." He rejected the notion that a delay in proceedings alone amounted to a legally cognizable injury, saying such a theory would be "fundamentally incompatible with the structure and purposes of the bankruptcy code."
The ruling underscores a core feature of U.S. bankruptcy law: an automatic stay that halts lawsuits against a debtor while that entity seeks to negotiate a comprehensive resolution of liabilities. The stay is designed to give debtors breathing room to reach agreements and to prevent some creditors from leapfrogging others to claim assets.
Patricia Kipnis, one of the attorneys for the five plaintiffs, said she and co-counsel "disagree with the decision and will be reviewing it with our clients to discuss an appeal."
Erik Haas, worldwide vice president of litigation at J&J, said the court correctly dismissed what he called the "wholly meritless claims."
The litigation stems from J&J’s effort to consolidate talc liabilities into a subsidiary and then subject those liabilities to bankruptcy protection under a corporate tactic known as the Texas two-step. That approach has been rejected by courts on three separate occasions, most recently in March, and the proposed $10 billion bankruptcy settlement that accompanied one of those attempts collapsed after a judge found it lacked adequate support from the women who say J&J products caused their cancers.
After the most recent dismissal of a talc-related bankruptcy, litigation against J&J resumed. The bulk of filed suits have been lodged by women alleging ovarian cancer linked to use of talc products; other claims involve mesothelioma, a form of cancer associated with asbestos exposure.
J&J’s record in the courtroom has been mixed. The company has prevailed in some matters but also faced sizable adverse verdicts, including a $1.5 billion judgment in Baltimore issued in December.
The company ceased sales of talc-based baby powder in the United States in 2020 and ended global sales of the talc formulation in 2023, switching to cornstarch-based alternatives.
The dismissed suit is captioned Love v. Red River Talc, U.S. District Court for the District of New Jersey, No. 24-cv-06320. Listed counsel for the plaintiffs in the case are Leigh O’Dell of Beasley Allen, Patricia Kipnis of Bailey Glasser, and Richard Golomb of Golomb Legal. Counsel listed for the debtor entity Red River Talc is Jessica Brennan of Barnes & Thornburg.
Context and legal posture
The court’s decision focuses on the legal question of what constitutes an injury that is sufficient to support a fraud claim tied to the use of bankruptcy. By finding the plaintiffs’ injury contingent on an eventual win in the talc lawsuits, Judge Shipp limited the fraud claim to speculation over what might have occurred had the underlying litigation reached a different outcome.
The ruling does not resolve the underlying talc liability disputes, which remain active in state and federal courts after the collapse of the most recent bankruptcy resolution attempt. The broader multidistrict litigation continues under Judge Shipp’s supervision.
Case details
- Allegation: Plaintiffs asserted J&J used a shell company bankruptcy strategy to keep "billions of dollars" out of reach and to impede plaintiffs’ access to court.
- Court finding: Plaintiffs could not show concrete harm from litigation delays between October 2021 and March 2025.
- Bankruptcy maneuver: J&J placed talc liabilities into a subsidiary through a Texas two-step and sought bankruptcy protection for that entity; courts have rejected the strategy three times.
- Ongoing litigation: More than 67,000 cases consolidated in multidistrict litigation; many plaintiffs allege ovarian cancer, others allege mesothelioma.