New Brunswick: Johnson & Johnson $9B Talcum Powder Settlement Called A Sham Deal


Johnson & Johnson J&J is earmarking nearly $9 billion to cover allegations that its baby power containing talc caused cancer, more than quadrupling the amount that the company had previously set aside to pay for its potential liability.

Under a proposal announced Tuesday, a J&J subsidiary will re-file for Chapter 11 bankruptcy protection and seek court approval for a plan that would result in one of the largest product-liability settlements in U.S. history.

The $8.9 billion that Johnson & Johnson would transfer to the subsidiary, LTL Management, would be payable over the next 25 years. The amount is up from the $2 billion that the New Brunswick-based company set aside in October 2021. The revised amount is being backed by more than 60,000 parties who have filed lawsuits alleging harm from J&J talcum powder, according to the company.

But attorneys representing tens of thousands of ovarian cancer and mesothelioma patients say any proposed deal that doesn’t adequately compensate the women for medical bills, pain and suffering and lost wages is a “non-starter.”

“Ovarian cancer and mesothelioma victims should and will be outraged if J&J attempts another dodge into bankruptcy,” said Andy Birchfield, who heads the mass torts section of the Beasley Allen law firm, in a statement.

“J&J is seeking an extremely deep discount on justice and is not really offering anything other than another bankruptcy and more delay tactics. An $8.9 billion amount is woefully inadequate to cover even the current ovarian cancer and mesothelioma claims, much less any future claims.”

The proposed settlement is part of Johnson & Johnson’s “Texas two-step” bankruptcy strategy, a legal maneuver employed by solvent companies facing personal injury lawsuits that want to avoid paying the full value of claims, experts say.

The claims contributed to drop in J&J’s sales of baby powder, prompting the company to stop selling its talc-based products in 2020. Last year, J&J announced plans to cease sales of the product worldwide.

The lawsuits filed against J&J had alleged its talcum powder caused users to develop ovarian cancer, through use for feminine hygiene, or mesothelioma, a cancer that strikes the lungs and other organs.

The baby powder controversy is only the latest misstep for the pharma giant, which includes a COVID-19 vaccine plagued with issues and its participation in a $26 billion settlement with several U.S. states over opioid lawsuits.

“This sham deal does not even pay for most victims’ medical bills,” says Jason Itkin, founding partner of the personal injury law firm Arnold & Itkin LLP, based in Houston. “Medical costs alone can range from $140,000 to more than $1.4 million per victim for ovarian cancer cases. The costs for mesothelioma are even higher.”

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