Johnson & Johnson announced on Tuesday that it has agreed to pay $8.9 billion to resolve all talc-based powder cancer lawsuits. The company is seeking to contain its liability within a bankruptcy filing by one of its units, hoping to settle over 40,000 existing suits and fund a trust to cover future claims.
Background on Talc Lawsuits
Johnson & Johnson has faced litigation for years over allegations that its talcum powder products, including baby powder and Shower to Shower, contained asbestos and caused cancer in consumers. The controversy began in 2013 when a jury in South Dakota found the company liable for a woman’s death from ovarian cancer allegedly caused by the talcum powder products.
J&J denies the claims and argues that the talc cases pose a financial threat to the company. Still, juries have repeatedly ruled against the company in nearly a dozen such suits over the years before J&J was forced to pay $2.5 billion to a group of 20 women whose case went to trial in 2018. Women and men blamed J&J’s 129-year-old baby powder for causing ovarian cancer and mesothelioma, a cancer specifically tied to asbestos exposure.
J&J’s Settlement Plan
Johnson & Johnson’s proposed settlement plan is one of the largest in corporate history and would pay out over 25 years through a subsidiary created to enable the $8.9 billion trust. If the settlement is approved, it will resolve all current and future claims involving Johnson & Johnson products that contain talc, such as baby powder.
The company said that the settlement plan is not an admission of wrongdoing, and J&J officials vowed to appeal the lower court’s ruling on the flawed bankruptcy case to the U.S. Supreme Court. However, the settlement would free J&J from defending itself against claims that baby powder and others tainted by asbestos caused various types of cancer.
The settlement must now be approved by a bankruptcy judge. If enough talc victims agree to join the settlement as part of the bankruptcy process, it would provide expeditious, substantial and fair compensation to claimants who cannot afford to wait any longer for a resolution.
Looking Ahead
The proposed settlement marks the end of a long-running legal battle for Johnson & Johnson, but it is unlikely to put an end to the controversy surrounding talcum powder and cancer. Many experts remain divided on the potential link between talcum powder use and cancer, and some plaintiffs may still choose to pursue legal action against the company.
Johnson & Johnson’s stock rose 3% in after-hours trading on Tuesday after the announcement. The proposed settlement would be paid out over 25 years through a subsidiary, which filed for bankruptcy to enable the $8.9 billion trust.
The bankruptcy approval process will proceed in the coming weeks, lawyers said. If approved, the settlement would end a long-running legal drama that has weighed on Johnson & Johnson’s image, and could have far-reaching implications for the broader cosmetics and personal care industry.
