Dear Congresswoman Beatty,
We write to express our deep and profound concern about Johnson & Johnson’s recent shameful and opportunistic abuse of the federal bankruptcy laws for its own economic advantage. Unless Congress addresses and legislatively eradicates this loophole, Johnson & Johnson’s gross abuse of process will pave the way for countless other corporations to shirk responsibility for grievous wrongs they have committed against unsuspecting Americans.
Johnson & Johnson, a company once trusted by so many, has exploited a “Texas TwoStep” bankruptcy maneuver, by which it transferred its legal liabilities to a shell company and sought bankruptcy protection for it. This effectively stripped grievously injured Americans of their day in court to shield Johnson & Johnson’s enormous assets.
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Signatories to this letter—together with the National Council of Negro Women, one of the oldest civil rights organizations in the United States—represent thousands of African American women in a lawsuit against Johnson & Johnson about this very issue. As a consequence of Johnson & Johnson’s cynical gambit, our claimants, each of whom has stories of heartbreaking loss, will be forced to wait for years for their claims to be adjudicated through the bankruptcy court and will collect a very small fraction of what they are due. Because there was nothing in the law to stop it, Johnson & Johnson was able to exploit this legal maneuver and now may well be able to dodge legal liability for much of the disastrous harm that it caused to so many.
As Senate Majority Whip Sen. Dick Durbin noted on the Senate floor, “There’s a justice system for rich people and powerful corporations—and there’s the system for everyone else.” In
this case, the “everyone else” is thousands of African American women who were targeted by Johnson & Johnson for sales of its Baby Powder and Shower to Shower (“Powder Products”). The main substance of these products is talc, which contains asbestos—a carcinogen that causes ovarian cancer. We now know these products are defective, dangerous to human health, unfit and unsuitable to be advertised, marketed, and sold in the United States, and lack proper warnings associated with their use.
But it gets worse. Facts have recently emerged about how Johnson & Johnson has known, for decades, that their Powder Products were grossly defective and inhumanely dangerous. By 1968, Johnson & Johnson knew of the harmful presence of asbestos in their Powder Products through their coercive experiment on Black male prison inmates (see, e.g., “J&J’s Controversial
Prison Testing Resurfaces in Baby Powder Lawsuits,” Bloomberg.com, March 7, 2022. Copy attached as Exhibit A hereto). In one study alone, Johnson & Johnson allowed 50 healthy prison inmates, 44 of whom were Black, to be experimented on. Results of these multiple studies — which included injections of tremolite and chrysotile asbestos or direct placement of talc on the skin — left these Black men with “granulomas,” “white scars,” and no reparations. (see, e.g., Exhibit A). Johnson & Johnson not only targeted Black men in their dangerous tests, but employed the results to redirect their advertising towards Black women, further targeting and marginalizing Black women through their targeted advertising of their dangerous Powder Products to Black women.
Adding insult to significant and sustained injury, Johnson & Johnson now says that it “deeply regrets the conditions under which these studies were conducted,” See Exhibit A — something that it is presently willing to do, since it believes that it is shielded from further liability for its abhorrent conduct by virtue of its clever bankruptcy tactic. But Johnson & Johnson’s words are hollow, while its actions speak volumes. Johnson & Johnson now clearly believes that the courts have given it a license to hurt its customers without recourse. And, unless Congress steps up to change that course, Johnson & Johnson may be right.
For all of its disgraceful targeting of African American women and its brazen maneuvering to dodge responsibility, perhaps the most concerning aspect of Johnson & Johnson’s abusive
conduct is the far-reaching implication it holds for other corporations that commit wrongful acts. If nothing is done to prevent Johnson & Johnson’s maneuver from being replicated, any
corporation that brought a defective, harmful product to market could limit its liability in this way. For example, 3M could do this to evade liability for defective military earplugs; Bayer/Monsanto could use this tactic to shed its settlement obligations in Roundup-related non-Hodgkin’s lymphoma cases; Gilead could turn to this to avoid Truvada liability; Philips could seek to limit payouts for CPAP cases; and Syngenta could do it with paraquat cases. The list goes on and on.
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In short, any corporation that has profited from products, medical devices, or pharmaceuticals that have harmed people could attempt to wriggle out of accountability by filing a Texas Two-Step bankruptcy action. How cynical, and how decidedly un-American, for billion-dollar corporations — entities that have made unimaginable profits from American consumers — to now claim some sort of manufactured bankruptcy to protect their bottom line, no matter the cost to truly wronged individuals. There is indeed a bankruptcy involved here, but it is a moral rather than an economic bankruptcy.
We urge you to move with haste to pass legislation introduced in both the House and Senate that would stop this abusive practice by corporations to evade legal liability and sidestep their obligation to compensate victims. The Nondebtor Release Prohibition Act of 2021, introduced by Chairman Jerry Nadler in the House (H.R. 4777) and Senator Elizabeth Warren in the Senate (S.
2497) seeks to prevent this injustice. We encourage you to co-sponsor this legislation to ensure that corporations that profit at the expense of those harmed by their products are held responsible for their actions.
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On behalf of the thousands, or potentially millions, of injured Americans whose only hope for relief is through the justice system, we urge you to act quickly and decisively to ensure that no other corporations are allowed to follow Johnson & Johnson’s repulsive example. The Texas TwoStep loophole must be closed.
Ben Crump, President and Founder, Ben Crump Law and Co-Chair, Shades of Mass
Diandra “Fu” Debrosse Zimmermann, DiCello Levitt Gutzler LLC, Co-Chair, Shades of Mass
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