HOUSTON (Legal Newsline) - A Texas bankruptcy judge appointed Randi Ellis as the future claims representative for Red River Talc, Johnson & Johnson’s talc unit, in its Chapter 11 bankruptcy case.
Ellis is a veteran dispute resolution and settlement consulting attorney who has previously been appointed by federal and state courts as a neutral mediator, special master and settlement master in complex civil disputes.
The matter was decided during a nearly seven-hour hearing held Nov. 12 in the U.S. Bankruptcy Court for the Southern District of Texas in Houston.
The high-stakes legal battle continues to unfold as lawyers representing thousands of women face off against Johnson & Johnson (J&J) over an $8.2 billion settlement intended to resolve ovarian cancer lawsuits allegedly related to the company’s talc powder. The proposed settlement has plaintiff lawyers who took money from funders who demand a payoff at each other's throats.
The legal battle has already seen several failed bankruptcy attempts.
Red River Talc's bankruptcy filing is J&J's third attempt to resolve talc claims. Two previous cases were rejected for lack of financial distress.
Ellis, who had served in the same role in the two previous J&J bankruptcy attempts, will oversee future claims from women alleging talc exposure caused cancer, as part of Red River's settlement plan.
Despite objections from the U.S. Trustee's office and insurance companies, who raised concerns over potential conflicts due to Ellis’ long association with J&J, Judge Christopher Lopez ruled that Ellis could operate independently.
The objections also included the claim that Ellis’s previous retention under a non-disclosure agreement could influence her impartiality.
Red River's legal team argued that the coalition opposing the plan sought to delay proceedings.
"From our perspective, what they care about is delay. They want this case to go down," Red River counsel Gregory Gordon said, according to Law 360.
The proposed settlement, which would resolve lawsuits filed by women claiming J&J’s talc products caused their cancer, was previously opposed by both plaintiffs’ attorneys and the U.S. Trustee.
J&J has defended the settlement, claiming it is fair and legal, with the majority of affected women supporting the plan.
The hearing also addressed a dispute over the authority to cast votes for certain claimants, with Red River seeking documents to verify whether Beasley Allen had proper consent to vote on their behalf.
"Every time we have tried to check, it had only raised suspicion that they didn't get the informed consent they said they had," Red River counsel Allison Brown said of Beasley Allen, according to Law 360.
Lopez also instructed a plaintiffs' law firm, Beasley Allen, to provide documents concerning 11,500 disputed votes related to the plan.
"They cannot select a ballot option that requires documentation then refuse to produce that documentation," Brown said, according to Law 360.
Lopez ruled that some evidence of voting authority would be required to resolve the dispute, but also allowed for privileged information to be redacted.
The Nov. 12 hearing centered on whether the bankruptcy process, including the creation of a new subsidiary, Red River Talc, LLC, is being used improperly to discharge J&J’s own liabilities.
The case follows years of litigation against J&J, with jury verdicts awarding billions to plaintiffs, but also mixed outcomes.
John Higgins, a partner at Porter Hedges in Houston, and Gregory Gordon, a partner at Jones Day in Dallas, said in a brief prior to the hearing that the challenges to the settlement are part of a broader legal strategy.
“Put bluntly, the [opponent’s] motion is the predictable outcome of the coalition’s delay-and-obfuscate strategy,” the pair wrote.
In January, the federal bankruptcy court will decide whether the J&J settlement can proceed.
The bankruptcy plan, which would create a fund for current and future claimants, is part of J&J's strategy to resolve around 40,000 claims.