Johnson & Johnson is adding $1.1 billion to the $9 billion+ proposed settlement to resolve claims that J&J baby powder caused ovarian and other gynecological cancers, and it’s causing a rift amongst plaintiffs’ lawyers.
New Brunswick, NJJohnson & Johnson boosted its $9 billion proposed settlement to over $10.1 billion to resolve potentially 100,000 talc lawsuits claiming its baby powder caused ovarian and other gynecological cancers. The proposal, which will be paid over 25 years, has created a rift with plaintiffs’ lawyers, one of whom rejected previous proposals to settle the cases through bankruptcy court and now approves.
(Claims that J&J baby powder caused other cancers like mesothelioma – linked to asbestos, which lawsuits allege is present in small amounts in talc – are not included.)
As of September 2024, Johnson & Johnson is facing 57,937 pending talcum powder lawsuits in multidistrict litigation. MDL 2738 is before Judge Michael A. Shipp in U.S. District Court for the District of New Jersey.
New J&J Deal
Over 62,000 plaintiffs have filed J&J talc lawsuits, and attorneys expect another 50,000 will sue the healthcare giant. The bankruptcy maneuver is referred to as a “Texas two-step” bankruptcy. The first step involves creating a new subsidiary and channelling its talc liability into that subsidiary, which then declares Chapter 11. As Reuters in July 2024 explained, the goal is to use the proceeding to force all plaintiffs into one settlement – without J&J itself having to file bankruptcy. The subsidiary— LTL Management — will claim bankruptcy as part of the settlement, allowing J&J to remain in operation. J&J says its plan to resolve talc litigation would resolve 99.75% of all pending talc lawsuits.
The ovarian claims to be resolved by the Plan constitute 99.75% of the pending talc lawsuits against the Company and its affiliates in the United States.
The remaining pending personal injury lawsuits relate to mesothelioma and will be addressed outside of the Plan. The Company already has resolved 95% of mesothelioma lawsuits filed to date.
The State consumer protection claims will also be addressed outside the Plan; the Company already has agreements in principle to do so.
Finally, and for completeness, the Company has also reached an agreement in principle to resolve all talc-related claims against it in the bankruptcy cases filed by suppliers of its talc (Imerys Talc America, Inc., Cyprus Mines Corporation, and their related parties. In mid-July, J&J proposed a $505 million settlement by December 31, 2025, to be paid to bankrupt talc miners Imerys Talc America and Cyprus Mines Corporation to resolve disputes over talc liabilities).
Further, J&J needs 75 percent of the claimants to vote in favor of the settlement so it can qualify for approval by the bankruptcy court. The company has attempted to settle the cases through a bankruptcy filing in Texas of the unit which now holds the products.
Adam Smith, an attorney, representing about 12,000 claimants, supports this latest deal that gives a shortened timeline for payments to claimants, but others are vehemently opposed. Smith filed the first baby powder case against J&J in 2009, and now recommends that his clients agree to this latest settlement offer. According to the Wall Street Journal, Smith had rejected previous proposals to settle the cases through bankruptcy court. The WSJ also reports that J&J “is closing in on one of the largest settlements of mass-tort lawsuits in history. Its strategy is to divide and conquer the trial lawyers.” It added that, if most of Smith’s clients back the settlement, J&J would secure at least 90 percent of the votes needed to qualify for bankruptcy court approval.
Reuters said, “Johnson & Johnson is locked in a bitter fight with lawyers opposing its third attempt to settle tens of thousands of lawsuits through a controversial bankruptcy-court maneuver. The women alleging J&J’s talc products caused their cancer are caught in the crossfire.” Approximately 100,000 women who claim that J&J baby powder caused their cancers are in limbo, possibly until the end of September when J&J intends to declare its subsidiary bankruptcy to finalize the settlement. However, some lawyers for cancer victims oppose the agreement and intend to challenge J&J’s bankruptcy plan.
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