According to CNBC reports, Johnson & Johnson company said on Tuesday that it will pay dollars 8.9 billion over the next 25 years to settle allegations on its baby powder and other talc products for causing cancer. The company announced the proposal in a securities filing. LTL Management, a subsidiary of Johnson & Johnson, was refiled for Chapter 11 bankruptcy protection.
More than 60 thousand claimants committed to supporting the proposed resolution. This would need approval in bankruptcy court, as the filing added.
Johnson & Johnson’s worldwide vice president of litigation, Erik Haas, said that resolving this problem through the proposed re-organization plan is more efficient and equitable. It allows the claimants to be compensated in a timely manner. It also enables Johnson & Johnson to remain focused on their commitment to impact health for humanity positively. However, the company still pushed back on the allegations about its talc. Erik Haas added that the company still believes these claims have no scientific merit.
How the US court sees the Case
Johnson & Johnson’s stopped the sales of its baby powder worldwide this year. This is after it has faced thousands of lawsuits from several customers claiming that the talc products have caused cancer because of contamination with the carcinogen asbestos. Johnson & Johnson, however, spun off LTL management in October 2021. This was to reduce the company’s losses from litigation and settlement. The company also took its talc lawsuits to the subsidiary and filed for bankruptcy protection. According to Johnson & Johnson’s ability, it is assumed that it can use the Chapter 11 strategy in February 2022. But, the U.S. Court of Appeals for the Third Circuit went against the ruling in January 2023. They said neither LTL nor Johnson & Johnson have a legitimate need for bankruptcy protection. This is because these companies were not in “financial distress.”
One of the attorneys representing plaintiffs in the talc powder lawsuits, Leigh O’Dell, said Johnson & Johnson is seeking a deep discount on justice. The company is not offering anything except another bankruptcy and some more delay.
A plaintiff lawyer who negotiated the proposed settlement, Mikal Watts, said that Johnson & Johnson is committed to fairly compensating these deserving women who battled cancer because of the talc products. Their work is to get their clients fairly paid for the injuries, and the proposed settlement shows a job done well.
Johnson & Johnson said in the previous month that it shall take the case to the Supreme Court. It paid dollars 7.4 billion in litigation expenses between the years 2020 and 2021, according to its annual filing.
History of the Johnson & Johnson talc allegations
In June 2020, Economic Times reported that one US court upheld a verdict that the talcum powder that Johnson & Johnson company sells caused ovarian cancer. The court ordered Johnson & Johnson to pay $ 2.1 billion in damages.
Moneycontrol reported in August 2022 that Johnson and Johnson is discontinuing its talc-based baby powder worldwide in the face of lawsuits claiming that the talcs contain a cancer-causing substance. Still, the company had no plan to take the product off the shelves in India. One J&J spokesperson told Moneycontrol that,
“We will work with retailers to keep the product on the shelves until our supply of talc-based powder runs out,”
However, in August 2022, an executive of Johnson & Johnson company further confirmed to Moneycontrol that the company has no plans to withdraw the talc powder.
However, reports say that Johnson & Johnson’s stopped the sales of its baby powder worldwide this year.