J&J Court Loss Weakens Tactic Used by 3M, Georgia-Pacific (2)

A courtroom loss by Johnson & Johnson is threatening a legal maneuver developed by a handful of the most profitable companies in the world to fight lawsuits.

A federal appeals court in Philadelphia found that J&J is too rich to use bankruptcy to resolve more than 40,000 cancer claims over its baby powder. The company has vowed to appeal in order to preserve a legal tactic known to critics as the Texas Two-Step that has been tried by industrial conglomerate 3M Co. and lumber giant Georgia-Pacific.

After spending more than $100 million in legal fees, J&J had its strategy thrown ...