Pharmaceutical giant Johnson & Johnson has agreed to pay $8.9 billion to settle tens of thousands of lawsuits alleging its talc products caused cancer, according to a statement released by the company on April 4, 2023.
If approved, the settlement would be one of the largest product liability settlements in U.S. history.
The proposed settlement amount is almost 5 times the amount of the company’s original talc settlement offer of $2 billion in 2021.
The plaintiffs who filed the talcum powder lawsuits alleged that Johnson’s(R) Baby Powder and various J&J cosmetic talc products were tainted with the carcinogen asbestos and caused them to develop different types of cancer, including mesothelioma and ovarian cancer.
They maintained that J&J knew for decades about the dangers associated with its talc products but failed to warn the public.
A 2018 investigative report by the news outlet Reuters disclosed that J&J knew about asbestos in its talc as early as 1957.
J&J Talc Lawsuit Update 2023
According to J&J’s recent statement, the talc powder settlement:
- Has a present value of up to $8.9 billion
- Is payable over 25 years
- Will resolve all current and future talc claims
J&J said more than 60,000 current talc claimants have agreed to the proposal.
The company noted that the settlement is not an admission of any wrongdoing and once again maintained that its talcum powder products are safe.
Erik Hass, the Worldwide Vice President of Litigation at Johnson & Johnson, claimed the decision to settle was based on the amount of time and money it would have taken to resolve all of the talc claims.
J&J announced in 2020 that it would stop selling its talc-based Johnson’s(R) Baby Powder in the United States and Canada. Currently, the company sells baby powder made from cornstarch in North America.
J&J Talc Bankruptcy Scheme
J&J’s proposed settlement comes on the heels of a federal appeals court ruling rejecting the company’s controversial “Texas two-step” bankruptcy tactic in which it tried to dump the liabilities from the talc litigation and avoid the thousands of talcum powder lawsuits filed against it.
In executing the Texas two-step bankruptcy maneuver:
- J&J created a subsidiary called LTL Management LLC and transferred the liabilities from the talc lawsuits to the newly formed subsidiary.
- LTL Management immediately filed for Chapter 11 bankruptcy.
Chapter 11 bankruptcy is a reorganization process that allows businesses to restructure and keep operating while repaying creditors.
Critics say the Texas two-step bankruptcy tactic is unfair because it allows companies like J&J to dodge their legal and financial obligations.
LTL Management has since refiled for Chapter 11 and seeks approval of a reorganization plan that takes into consideration the $8.9 billion talc lawsuit settlement.
In tossing LTL Management’s initial filing, the court had ruled that the company was not entitled to bankruptcy protection because it was not in financial trouble. J&J has a market capitalization of more than $400 billion.
What Happens Next With the J&J Talc Settlement?
Under the terms of the proposed settlement, plaintiffs diagnosed with cancer before April 1, 2023, reportedly would be paid from a bankruptcy trust within 1 year of a judge approving LTL Management’s Chapter 11 plan.
Plaintiffs diagnosed after that date would be able to access money placed in the trust for the next 25 years.
However, the settlement is not a done deal. The court must accept the new bankruptcy filing and give its stamp of approval to the settlement. Additionally, enough claimants must agree to the plan.
In bankruptcies involving asbestos, companies need 75% of claimants to agree to a restructuring plan before a judge will sign off on it.
It’s possible that claimants who have not yet agreed to the proposal could oppose the settlement and once again send the case back to the appeals court that rejected the initial J&J talc bankruptcy filing.
LTL said it expects to have a reorganization plan ready for a judge’s approval as early as May 14.
On April 10, lawyers representing a group of claimants argued in a court filing that the new bankruptcy case should be rejected as a tactic to prevent asbestos victims from obtaining fair compensation.
LawFirm.com is monitoring the Johnson and Johnson talc settlement and will keep readers updated on any new developments.
If you are unsure whether you are eligible for a talc powder lawsuit settlement, our team of medical experts and legal professionals can help. Contact us today at (888) 726-9160 or fill out our contact form for a free case review.