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J&J’s Victory Over Cancer Victims Clears Path for 3M, Others

  • Bankruptcy court ruling may broaden controversial tactic’s use
  • J&J can try to use unit’s Chapter 11 to end baby powder suits
Johnson & Johnson baby powder.

Johnson & Johnson baby powder.

Photographer: Justin Sullivan/Getty Images

A court ruling allowing Johnson & Johnson to use a controversial bankruptcy strategy to force cancer victims into potential settlement talks has raised the odds that other companies facing costly product-liability claims like 3M Co., and Dow Inc. may follow suit, analysts and legal experts say.

A judge in February cleared J&J to employ a legal tactic known as the Texas Two-Step in which it shunted almost 40,000 claims into a purposely created unit that then filed for bankruptcy under a business-friendly Texas law. The ruling temporarily halted the litigation over J&J’s iconic baby powder while the company tries to negotiate settlements.