A New Jersey bankruptcy judge on Tuesday paused consumer-protection lawsuits brought by New Mexico and Mississippi linking Johnson & Johnson's talc-based products to cancer.
Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton agreed to extend the legal stay protecting J&J's bankrupt talc unit to the parent company, even though it isn't in chapter 11.
Judge Kaplan ruled the talc subsidiary, LTL Management LLC, and its chapter 11 case would be irreparably harmed if the state attorneys general were allowed to move ahead with their lawsuits against J&J during the bankruptcy.
The state lawsuits allege that J&J was aware that its talc-based products contained cancer-causing asbestos but refused to post a warning on its products, which the company denies.
The accusations raised by New Mexico and Mississippi concern the central dispute in LTL's bankruptcy case and would disrupt it if they were allowed to move forward, Judge Kaplan said.
The judge also indicated he wouldn't put the state lawsuits on hold indefinitely and would revisit his ruling in December.
Although the pause will benefit J&J, Judge Kaplan said the benefits to the company are relatively small compared to the potential harm to LTL and its prospect for settling all talc-related claims against it in chapter 11.
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