Johnson & Johnson has proposed an $8.9bn settlement to resolve lawsuits claiming its talc products caused cancer, after a ruling last week that its subsidiary, LTL Management LLC, cannot delay an order dismissing its bankruptcy.
J&J had sought to use the bankruptcy of its LTL Management to halt more than 38 000 lawsuits alleging its Baby Powder and other talc products are contaminated with asbestos. It maintains its consumer talc products are safe and asbestos-free, reports Reuters.
The bankruptcy strategy stumbled in January, when the Circuit Court of Appeals ruled that because they were not in “financial distress”, neither LTL nor J&J had a legitimate need for bankruptcy.
LTL had asked the court to delay its ruling from taking effect, allowing the company time to pursue a Supreme Court appeal. But the request was denied last week, the court instead directing a bankruptcy judge to dismiss the Chapter 11 case.
EWN reports that this week J&J said the proposed settlement, which still needs the approval of the bankruptcy court, “will equitably and efficiently resolve all claims arising from cosmetic talc litigation”.
If approved by the court and a majority of the plaintiffs, the payout would be one of the largest product liability settlements ever in the US, ranking alongside those entered into by tobacco companies and, more recently, opioid manufacturers.
The company has been facing thousands of lawsuits over talcum powder containing traces of asbestos blamed for causing ovarian cancer.
Although it has never admitted wrongdoing, it stopped selling its talc-based baby powder in the United States and Canada in May 2020.
The money would be paid to the tens of thousands of claimants over 25 years through LTL Management LLC, which was set up to address the claims and which had filed for the bankruptcy protection.
A previous settlement involving LTL was rejected by an appellate court.
J&J had previously proposed a settlement of $2bn in response to the allegations that its cosmetic talc caused gynaecological cancers.
The company said the newly proposed settlement is not “an admission of wrongdoing, nor an indication that the company has changed its longstanding position that its talcum powder products are safe”.
Its bankruptcy filing had halted a deluge of talc litigation, and the 38 000 cases that are consolidated in the New Jersey federal court proceeding will resume after the dismissal of the bankruptcy.
Before the bankruptcy filing, LTL faced costs of $3.5bn in verdicts and settlements, including one case in which 22 women were awarded a judgment of more than $2bn.
J&J has prevailed in other cases, winning defence verdicts in 16 trials and succeeding in several appeals that either reversed or reduced plaintiffs’ initial wins.
Its 2020 decision to stop selling its talc baby powder in America and Canada was blamed on what it called “misinformation” about the product’s safety: it later announced its intent to discontinue the product worldwide in 2023. The talc is still on South African shelves.
EWN article – J&J proposes billions in settlement of talc cancer claims (Open access)
https://ewn.co.za/0001/01/01/johnson-and-johnson-proposes-usd8-9-billion-settlement-of-talc-cancer-claims
EWN article – J&J proposes billions in settlement of talc cancer claims (Open access)
See more from MedicalBrief archives:
No date yet for SA withdrawal of J&J baby powder
J&J stops selling its iconic talc baby powder in North America
J&J confirms end to global talc sales amid contamination litigation
J&J receives subpoenas related to asbestos contamination litigation