Johnson & Johnson proposes $6.5bn settlement of baby powder cancer lawsuits

Johnson & Johnson proposes $6.5bn settlement of baby powder cancer lawsuits By Sruthi Nair - May 05, 2024
Johnson and Johnson

Johnson and Johnson

Johnson & Johnson (J&J) is moving forward with a $6.475bn proposed settlement of tens of thousands of lawsuits alleging that its baby powder and other talcum-powder products were contaminated with asbestos and caused ovarian cancer, the company said on Wednesday in a statement.

The company discontinued sales of its baby powder in North America in 2020, and worldwide in 2023. The company now sells a cornstarch-based formula, though it continues to insist on the safety of talc products.

Talc is a naturally occurring mineral that can appear alongside asbestos in mines. Investigations by Reuters and the New York Times found J&J worried about the presence of asbestos in its talc for decades, but worked to keep the information from the public.

The deal would allow J&J to resolve the lawsuits through a third bankruptcy filing of a subsidiary company. To close the proposed settlement, 75% of claimants who allege they were harmed by J&J’s talcum products will need to approve the deal. They will vote over the course of three months.

If a consensus is reached, J&J would resolve all current and future ovarian cancer claims against its products, which account for about 99% of the talc-related lawsuits filed against the company. Roughly 54,000 lawsuits are centralized in a New Jersey federal court proceeding, called multi-district litigation.

While the company heralded the benefits of the proposed plan, it also asserted that the cases against it are “meritless litigation”.

Courts have rebuffed J&J’s two previous efforts to resolve the lawsuits through the bankruptcy of the subsidiary created to absorb J&J’s talc liability, LTL Management.

J&J, which says that its products do not contain asbestos and do not cause cancer, said that its settlement had the support of a majority of attorneys representing plaintiffs who have filed cancer lawsuits against the company.

J&J said it was confident that the deal will reach a 75% support threshold needed for a bankruptcy settlement that would end the litigation entirely, shutting off future lawsuits and preventing people from opting out of the deal to pursue their separate lawsuits.

The proposed deal would build on J&J’s settlements with about 95% of people who have sued the company after developing mesothelioma, a rare form of cancer linked to asbestos exposure, as well as its settlements with US states, which have alleged that the company failed to warn consumers about the dangers of its talc products.

J&J did not disclose the value of the mesothelioma settlements, but it said that it recorded an incremental charge of $2.7bn in the first quarter of 2024, to account for recent talc-related settlements.

In its second bankruptcy filing, LTL put forward an $8.9bn deal that would also have addressed the mesothelioma cancer lawsuits and states’ consumer protection actions, in addition to the ovarian cancer claims addressed by the current deal.

J&J said it would continue to defend itself against the lawsuits while trying to gather votes on the settlement. The company said it had prevailed in 95% of ovarian cases tried to date, including every ovarian case tried over the last six years.

But, the litigation has resulted in some large verdicts for plaintiffs, including a $2.12bn award in favor of 22 women who blamed their ovarian cancer on asbestos in J&J talc.

By Sruthi Nair - May 05, 2024
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