Johnson & Johnson has announced a proposed $6.475 billion settlement to resolve tens of thousands of lawsuits alleging that its baby powder and talc products contain asbestos and cause ovarian cancer. The deal would involve a third bankruptcy filing of a subsidiary company to reach a settlement on all current and future ovarian cancer claims, which make up 99% of the talc-related lawsuits filed against J&J. The company will enter a three-month voting period in hopes of reaching a consensus with the majority of attorneys representing plaintiffs who have filed cancer lawsuits against the company.
Previous efforts by J&J to resolve the lawsuits through bankruptcy of a subsidiary have been rebuffed by courts. Despite the company’s claims that its products do not contain asbestos and do not cause cancer, they believe that the proposed settlement has the support of a majority of attorneys representing plaintiffs. J&J is confident that the deal will reach the 75% support threshold needed for a bankruptcy settlement that would end the litigation entirely, preventing future lawsuits and individuals from opting out of the deal to pursue separate lawsuits.
The proposed deal would build on previous settlements with individuals who developed mesothelioma, a rare form of cancer linked to asbestos exposure, as well as settlements with U.S. states who alleged that the company failed to warn consumers about the risks of its talc products. The company did not disclose the value of the mesothelioma settlements but recorded an incremental charge of $2.7 billion in the first quarter of 2024 to account for recent talc-related settlements. Previous bankruptcy filings had put the talc litigation on hold from 2021 to 2023, but trials have since resumed after a federal judge ruled that the latest bankruptcy case should be dismissed in July 2023.
In March, J&J was given an opportunity to contest the scientific evidence linking talc to ovarian cancer in the centralized litigation in a New Jersey federal court. The judge overseeing the cases requested new arguments on the scientific evidence due to recent changes in the law. J&J stated that it will continue to defend itself against the lawsuits while trying to gather votes on the settlement, highlighting its success in 95% of ovarian cases tried to date. However, some large verdicts have been awarded to plaintiffs, including a $2.12 billion award in favor of 22 women who blamed their ovarian cancer on asbestos in J&J talc. Despite this, J&J was recently ordered to pay $45 million in a mesothelioma case while winning an ovarian cancer case.
The $6.475 billion proposed settlement aims to resolve the majority of lawsuits against Johnson & Johnson regarding talc products, specifically addressing ovarian cancer claims. The company is hopeful that the deal will reach a consensus amongst plaintiffs’ attorneys and meet the required support threshold for a bankruptcy settlement. Previous attempts at bankruptcy settlements were unsuccessful, but J&J is determined to move forward with this proposal to end the ongoing litigation. Despite the company’s confidence in its products not causing cancer, they are taking steps to address the concerns and settle with affected individuals and state entities. The legal proceedings and settlements have had a significant financial impact on J&J, prompting the need for accounting for these costs in their financial reports.
