[The Wall Street Journal] Johnson & Johnson has proposed paying at least $8.9 billion to thousands of people who sued the company alleging that their use of J&J’s talc-containing powders caused cancer, in what would be one of the biggest product-liability settlements ever.
The company also said Tuesday its LTL Management LLC unit, which J&J had established to deal with the litigation, has refiled for bankruptcy protection to seek approval of the plan to make the payments over 25 years.
If a bankruptcy court and a large majority of plaintiffs approve the moves, J&J could resolve thousands of lawsuits that have shadowed the company for the last several years, damaging the company’s reputation and impeding recent efforts to hive off its unit selling baby powder and other consumer products.
Without a court-approved settlement, J&J could have faced defending itself against myriad lawsuits across the U.S., a process that could have taken years.
J&J, which didn’t admit wrongdoing, said its proposal has the support of the vast majority of claimants, more than 60,000 people. Bankruptcy law requires that 75% of voting claimants must vote in favor of the plan.
“The company continues to believe that these claims are specious and lack scientific merit,” said Erik Haas, J&J’s worldwide vice president of litigation. He said resolving the litigation, however, would compensate claimants while allowing the company to focus on its core mission.
A group of plaintiffs’ law firms, who say they represent nearly 70,000 people with filed or pending claims against the company, said they supported J&J’s proposed settlement.
“This settlement is a testament to the tens of thousands of women who have battled both cancer and the court system to achieve justice for themselves,” said Alicia O’Neill of the plaintiffs’ law firm Watts Guerra LLC. “These strong women have ensured that no other woman will be exposed to this unnecessary danger. They deserve compensation and closure.”
It would rank among the largest mass tort-litigation settlements, including a $206 billion agreement with tobacco companies over the health effects of smoking and an estimated $50 billion deal reached with major healthcare companies accused of fueling the opioid epidemic.
J&J’s proposal concerns long-running litigation over one of the company’s most famous products, Johnson’s Baby Powder.
Many of the lawsuits against J&J were filed by women who say they developed ovarian cancer after using either Johnson’s Baby Powder or a former J&J product, Shower to Shower, for years. Some lawsuits have alleged that the powders contained asbestos, which contributed to a rare cancer called mesothelioma. J&J has said its talc products don’t contain asbestos.
The New Brunswick, N.J., company has stopped selling versions of Johnson’s Baby Powder that contain talc in the U.S. and Canada and plans to end global sales this year. Instead, it is selling a cornstarch-based version of Johnson’s Baby Powder.
J&J had won a majority of trials over the talc allegations, but some juries have hit the company with significant damages.
In 2021, J&J paid a jury award of $2.1 billion from a 2018 finding that talc powder caused ovarian cancer in 22 women. J&J made the payment after the U.S. Supreme Court declined to hear its appeal of that verdict.
The company’s proposed settlement follows the dismissal of a prior bankruptcy case filed by its LTL subsidiary, created by J&J in 2021 as a vehicle to shift pending talc-related claims to bankruptcy court and stop further jury trials.
In January, a federal appeals court ruled that LTL didn’t qualify for the protections of bankruptcy because of its financial backing from its parent J&J. Last month, the court rejected J&J’s request for a rehearing before the entire appellate court, and the company said it would seek a U.S. Supreme Court review.