Baby powder: Johnson proposes US$ 8.9 billion deal – 04/04/2023 – Market

Johnson & Johnson has proposed an $8.9 billion settlement to settle tens of thousands of lawsuits alleging the company’s baby powder causes cancer.

The legal battle involving the product has been going on for a decade. If the settlement is approved, it would become the largest involving corporate liability for a product in bankruptcy history, according to lawyers involved in the case.

Despite the nearly $9 billion proposed settlement, Johnson said it continues to believe the allegations lack scientific merit and that the settlement is not an admission of guilt. However, according to the company, resolving cases in civil court would take decades and impose significant costs.

The settlement could end one of the fiercest product liability lawsuits in US history, involving tens of thousands of users of J&J’s baby powder who allege it caused cancer.

About a dozen law firms representing approximately 70,000 claimants said they support the draft settlement and are confident it will secure enough support to win bankruptcy court approval.

“This settlement is a testament to the tens of thousands of women who have fought both cancer and the justice system to get justice for themselves,” said Alicia O’Neill of Watts Guerra, one of the law firms representing the plaintiffs. “These strong women have ensured that no others are exposed to this unnecessary danger. They deserve compensation and closure.”

The proposal comes after a court ruling in January barred Johnson’s attempt to implement a complex bankruptcy scheme called “Texas-two step” (Texas two steps) to deal with claims involving talc.

In 2021, J&J split into two separate entities to concentrate all talc debts in one subsidiary, which it called LTL. LTL then filed for bankruptcy, which suspended all talc claims. In this strategy, the company created a fund of US$ 2 billion to compensate the victims.

The claimants then started legal proceedings in an attempt to eliminate the bankruptcy.

Now, LTL would file for bankruptcy again to facilitate the deal, according to the company.

The company stopped selling the talc-based product in the United States and Canada in 2020, citing declining sales.

However, the ruling coincided with a barrage of lawsuits from people who claimed that J&J’s baby powder had been contaminated with asbestos and caused them to develop ovarian cancer or mesothelioma.

J&J has lost several high-profile cases, including a Missouri ruling that awarded $4.7 billion in damages to 22 women who blamed their ovarian cancer on asbestos contained in this talc. In June, the Supreme Court refused to review the case, in which damages had already been reduced to $2.1 billion.