Director of 9/11 Fund Picked to Estimate Cost of J&J Talc Claims

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The lawyer who oversaw payments to victims of the Sept. 11 terrorist attacks will be appointed by a federal judge to estimate the total liability that Johnson & Johnson faces for claims that talc in its baby powder causes cancer.

Kenneth R. Feinberg would oversee one of the most contentious parts of J&J’s effort to force a negotiated end to more than 38,000 lawsuits that accuse the health care giant of causing cancer. The high-profile mediator will be asked to estimate how many people have legitimate claims against J&J and how much money it may cost to compensate them.

Feinberg previously spent years helping to distribute $7 billion to victims of the Sept. 11 terrorist attacks. He runs a mediation services company, which in other bankruptcy cases has been paid as much as $300,000 a month.

During a video court hearing Thursday, US Bankruptcy Judge Michael Kaplan asked lawyers involved in the J&J case to send him any concerns they have about Feinberg’s appointment, which he will try to incorporate into a formal order naming the estimator. Kaplan did not set a deadline for Feinberg to complete his work, but said he expects it to be done before “the weather gets cold.”

J&J disputes claims that the talc it used in making baby powder and other products is harmful.

Kaplan is overseeing the bankruptcy case of a unit that J&J set up to resolve all of the talc-related cancer claims it faces in one court, rather than fighting thousands of trials around the US.

Last year, J&J moved all of its talc liabilities into the specially created unit, called LTL Management, and placed it in Chapter 11 bankruptcy. The maneuver has been labeled the Texas Two Step by critics because it relies on a business-friendly law in that state.

The estimation process will rely on data from thousands of previous settlements and court judgments, Kaplan said. J&J and the cancer victims will not be allowed to demand documents from each other, which can bog down the process, he added.

In similar bankruptcy fights, the estimation phase involves months-long legal fights over how much personal information cancer victims must reveal. Those types of questions won’t be allowed in J&J’s case, Kaplan said. That is a clear loss for LTL which has said such data is necessary.

The bankruptcy is LTL Management LLC, 21-30589, U.S. Bankruptcy Court, District of New Jersey (Trenton).

Photo: Kenneth Feinberg. Photographer: Andrew Harrer

Copyright 2022 Bloomberg.


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