(Bloomberg) – The attorney who oversaw payments to victims of the 9/11 terrorist attacks will be named by a federal judge to assess the total liability Johnson & Johnson faces for allegations that talc in its baby powder causes cancer.
Kenneth R. Feinberg would oversee one of the most controversial parts of J&J’s efforts to force a negotiated end to more than 38,000 lawsuits that accuse the healthcare giant of causing cancer. The high-level mediator will be asked to estimate how many people have legitimate claims against J&J and how much money it might cost to compensate them.
Feinberg has already spent years helping distribute $7 billion to victims of the 9/11 terrorist attacks. He runs a mediation services company that in other bankruptcy cases has been paid up to $300,000 a month.
In a video hearing on Thursday, U.S. Bankruptcy Judge Michael Kaplan asked attorneys involved in the J&J case to tell him of their concerns about Feinberg’s appointment, which he will try to incorporate into a formal order appointing 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 used in making baby powder and other products is harmful.
Kaplan is overseeing the bankruptcy case of a unit J&J has set up to resolve all of the talc-related cancer claims it faces in one court, rather than filing thousands of lawsuits across the United States.
Last year, J&J moved all of its talc liabilities into the specially created unit, called LTL Management, and filed it into Chapter 11 bankruptcy. The move was called a Texas Two Step by critics because it’s backed by a business-friendly law in that state.
The estimation process will draw on data from thousands of previous settlements and court judgments, Kaplan said. J&J and 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 battles over how much personal information cancer victims must reveal. Those types of questions won’t be allowed in J&J’s case, Kaplan said. It is an obvious loss for LTL who declared that this data was necessary.
Bankruptcy is LTL Management LLC, 21-30589, US Bankruptcy Court, District of New Jersey (Trenton).
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