Johnson & Johnson Proposes Paying $9 Billion to Settle Talc Lawsuits

Johnson & Johnson Proposes Paying  Billion to Settle Talc Lawsuits

Johnson & Johnson said it has proposed to pay at least $8.9 billion to thousands of people who sued the company alleging their use of J&J’s talcum powders caused cancer, in what would be one of the largest liability settlements to products sometimes.

The company said Tuesday that its unit LTL Management LLC has refiled for bankruptcy protection to seek approval of a plan to pay $8.9 billion over 25 years. J&J said more than 60,000 claimants have pledged to support the proposed resolution, which requires approval in bankruptcy court.

J&J has denied wrongdoing and continues to say its powder products containing talc are safe.

“The company continues to believe these claims are false and have no scientific merit,” said Erik Haas, J&J’s vice president of worldwide litigation. He said the settlement of the lawsuit, however, would compensate the claimants while allowing the company to focus on its core mission.

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The deal would resolve a costly and reputation-damaging lawsuit over one of J&J’s most famous products, Johnson’s Baby Powder. Many of the thousands of lawsuits against J&J were filed by women who say they developed ovarian cancer after using Johnson’s baby powder or a former J&J product, Shower to Shower, for years. Several lawsuits have alleged that the dusts contained asbestos, which contributed to a rare cancer called mesothelioma.

The company has stopped selling versions of Johnson’s Baby Powder that contain talc in the US and Canada and plans to end global sales this year. Instead, it is selling a cornstarch-based version of Johnson’s Baby Powder.

A group of plaintiffs’ law firms, which say they represent about 70,000 plaintiffs in the talc lawsuit, said they support 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 risk. They deserve compensation and closure.”

Johnson & Johnson said it would post a charge of $6.9 billion for the first quarter, having previously booked $2 billion when LTL filed for bankruptcy protection in 2021. Photo: Mark Kauzlarich/Bloomberg News

The settlement announcement follows the dismissal of an earlier bankruptcy case filed by LTL, set up by J&J in 2021 as a means of moving pending talc-related claims into bankruptcy court and barring further jury trials.

In January, a federal appeals court ruled that LTL did not qualify for bankruptcy protection because of its financial backing from its parent J&J. Last month, the court denied J&J’s request for a rehearing before the entire appeals court, and the company said it would seek a U.S. Supreme Court review.

J&J, of New Brunswick, N.J., said in a securities filing that the new bankruptcy plan would resolve all current and future claims arising from cosmetic talc litigation against the company and its North American subsidiaries. .

The company said $8.9 billion is the present value of the total payment and that the face value would be about $12 billion over 25 years.

J&J will record a first-quarter charge of $6.9 billion, after previously booking $2 billion when LTL filed for bankruptcy protection in 2021.

The company said LTL’s refiled case addresses concerns raised by the appeals court when it rejected J&J’s initial bankruptcy offer. A Chapter 11 filing provides a path to resolve pending claims against LTL and J&J, which did not file Chapter 11 themselves, in a single forum.

J&J paid a jury award of $2.1 billion in 2021, following an earlier finding that talcum powder caused ovarian cancer in 22 women. Photo: Christian Gooden/Associated Press

J&J had won most of the trials over the talc allegations, but some juries have hit the company with substantial damages.

In 2021, J&J paid a $2.1 billion jury award from a 2018 finding that talcum powder caused ovarian cancer in 22 women. J&J made the payment after the US Supreme Court declined to hear its appeal of that ruling.

Before the proposed settlement, J&J’s obstacles to the original bankruptcy plan meant the company would have to go back to court to defend itself against thousands of lawsuits, a process that could have taken years.

J&J, the largest health products maker by market capitalization, has been trying to resolve the talc lawsuit while reinventing itself. Later this year, it plans to spin off its consumer health unit, which sells Johnson’s baby powder and Tylenol, into a standalone company to be called Kenvue.

J&J will retain talc-related liabilities for products sold in the US and Canada. Kenvue will be responsible for liability arising from products sold outside the US and Canada, according to a Kenvue securities filing.

This sale will leave J&J with two main units: pharmaceuticals and medical devices. J&J executives have been looking to accelerate sales growth in the device unit, which sells artificial knees, surgical products and contact lenses, and has been sluggish.

Write Peter Loftus at P[email protected] and Andrew Scurria at [email protected]

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