Johnson & Johnson created a plan last year to limit the financial bleeding from billions of dollars in jury awards to plaintiffs who alleged the company's Baby Powder and other talc products caused deadly cancers.
The healthcare and consumer-goods giant assigned more than 30 staffers to 'Project Plato.' In a memo on the project in July, a company lawyer warned the team: Tell no one, not even your spouse.
'It is critical that any activities related to Project Plato, including the mere fact the project exists, be kept in strict confidence,' Chris Andrew, a J&J lawyer, wrote in an internal memo reviewed by Reuters.
The covert team would go on to evaluate a strategy to shift all the liability from about 38,000 pending talc cases onto a newly created subsidiary, which would immediately declare bankruptcy.
The goal, as a lawyer for the subsidiary said in a court filing, was to halt all the litigation and transfer the cases to bankruptcy court, where plaintiffs would compete for compensation from a limited pool of money.
Tens of thousands of plaintiffs, many with mesothelioma or ovarian cancer, have filed lawsuits alleging that exposure to talc in J&J's Baby Powder and other company products made them sick.
Johnson & Johnson CEO Alex Gorsky, pictured speaking at White House about COVID vaccine production, did not answer detailed written questions about its planning of the bankruptcy maneuver in effort to avoid paying billions in settlements over claims that J&J baby powder and other products contained asbestos and caused cancer
One plaintiff is Thomas McHattie, 78 years old, who traveled the world as an obstetrician-gynecologist before receiving a mesothelioma diagnosis in March 2020. McHattie said he recommended Baby Powder to 'countless pregnant women' while also using it himself. McHattie said he endured five courses of chemotherapy to treat tumors in his abdomen, and has suffered from pronounced fatigue and shortness of breath.
He sued J&J in New York in July, a few months after receiving his diagnosis. His case had not yet gone to trial when J&J subsidiary LTL Management filed for bankruptcy.