J&J advances $6.48 billion settlement of talc cancer lawsuits

Courts have rebuffed J&J's two previous efforts to resolve the lawsuits through the bankruptcy of the subsidiary created to absorb the company's talc liability, LTL Management. J&J, which says its products do not contain asbestos and do not cause cancer, said that its settlement is supported by attorneys representing the majority of plaintiffs who have filed cancer lawsuits against the company.

Johnson & Johnson said on Wednesday it is moving forward with a $6.48 billion proposed settlement of tens of thousands of lawsuits alleging that its baby powder and other talc products contain asbestos and cause ovarian cancer. The deal would allow it to resolve the lawsuits through a third bankruptcy filing of a subsidiary company.

It will begin a three month voting period in hopes of reaching consensus on a settlement of all current and future ovarian cancer claims. Those claims account for 99% of the talc-related lawsuits filed against J&J, including about 54,000 lawsuits that are centralized in a New Jersey federal court proceeding. Courts have rebuffed J&J's two previous efforts to resolve the lawsuits through the bankruptcy of the subsidiary created to absorb the company's talc liability, LTL Management.

J&J, which says its products do not contain asbestos and do not cause cancer, said that its settlement is supported by attorneys representing the majority of plaintiffs who have filed cancer lawsuits against the company. Erik Haas, J&J's worldwide vice president of litigation, said gathering votes before a bankruptcy filing would allow the new plan would succeed where J&J's past efforts faltered.

"The claimants get to vote, and that's the major difference here," Haas said in a Wednesday call with investors. J&J said it is confident that the deal will reach a 75% support threshold needed for a bankruptcy settlement that would end the litigation entirely, shutting off future lawsuits and preventing people from opting out of the deal to pursue their separate claims.

Attorneys representing cancer victims seemed divided on the proposal on Wednesday. "I believe J&J's proposed plan announced today will bring peace and closure to our clients and the thousands of women who have fought by our side in the quest for justice," said Jim Onder, who represents about 21,000 talc claimants and who supported J&J's previous bankruptcy proposal.

Other lawyers said J&J is trying to "stuff the ballot box" by getting votes from lawyers who have not sued J&J or whose clients have types of cancers that do no have a strong scientific link to talc. Mike Papantonio, an attorney opposed to the deal, said J&J has been "covertly soliciting law firms to accept their deal, promising a swift payday for some opportunistic lawyers."

The proposed deal would build on J&J's settlements with about 95% of people who have sued the company after developing mesothelioma, a rare form of cancer linked to asbestos exposure, as well as its settlements with U.S. states, which have alleged that the company failed to warn consumers about the dangers of its talc products. $11 BILLION IN RESERVES

J&J said it set aside a total reserve of $11 billion to account for all of its talc settlements, including the proposed ovarian cancer settlement, mesothelioma claims, states' claims, and settlements with two bankrupt companies that supplied talc used in J&J's products. J&J recorded an incremental charge of $2.7 billion in the first quarter of 2024, added to its previous reserve for talc litigation. In its second bankruptcy filing, LTL put forward an $8.9 billion deal that would have dealt with all talc-related claims at once.

After that deal was rejected, Haas said it was more practical to settle mesothelioma claims outside of bankruptcy before addressing much larger group of 85,000 to 100,000 ovarian cancer claims. Haas said J&J faced hundreds of mesothelioma lawsuits, and it has settled all but 153 lawsuits. The previous bankruptcy filings put the talc litigation on hold from 2021 to 2023, but trials have resumed after a federal judge ruled the latest bankruptcy case should be dismissed in July 2023.

In March, J&J received a new chance to contest the scientific evidence linking talc to ovarian cancer in the centralized litigation in New Jersey federal court. The judge overseeing the cases said that recent changes in the law and new scientific evidence require a fresh review, and he asked J&J to present new arguments on the science by late July. J&J said it will continue to defend itself against the lawsuits while trying to gather votes on the settlement. The company said it has prevailed in 95% of ovarian cases tried to date, including every ovarian case tried over the last six years.

The litigation has resulted in some large verdicts for plaintiffs, including a $2.12 billion award in favor of 22 women who blamed their ovarian cancer on asbestos in J&J talc. In the past month, J&J was recently ordered to pay $45 million in a mesothelioma case while winning an ovarian cancer case.

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