Thousands of people have sued the company claiming thats powder caused their cancer. Now, the company is offering a huge settlement deal.
US pharmaceutical giant Johnson & Johnson has proposed an $8.9 billion settlement to resolve tens of thousands of lawsuits over allegations that its talcum powder causes ovarian cancer.
While the company denies the claims, it said it is offering the settlement to put the issue behind it. The compensation is expected to go to women who used Johnson & Johnson Baby Powder and were later diagnosed with ovarian cancer, along with their families.
Legal analysts predict that the settlement will be approved by the court, since a large number of the plaintiffs and their lawyers have supported the proposal.
The talc present in Johnson & Johnson’s baby powder allegedly contained asbestos, a known carcinogen. Pintus & Mullins, a personal injury law firm representing plaintiffs, claims that “many victims have been exposed to asbestos through J&J baby powder.”
“Johnson & Johnson (J&J) has a long history with Asbestos,” the firm says on its website. “The earliest reports of asbestos in J&J talc products date back to 1957-1958.”
Johnson & Johnson denies any link to cancer-causing ingredients in its product. However, the company removed talcum from its baby powder in 2020.
Johnson & Johnson created a subsidiary corporation, LTL Management, to pay the claims and the subsidiary has already declared bankruptcy.
Mikal Watts of the law firm Watts Guerra and TalcPowderJustice.com said the $8.9 billion settlement would be the largest products liability settlement ever realised after a bankruptcy filing.
However, even if the bankruptcy court approves the settlement, plaintiffs may not receive any money for years. Lawyers involved in the case said they expect the money to be paid out over a 25-year period.
The company has stated that the claims “are specious and lack scientific merit.” However, the proposed settlement demonstrates how desperate Johnson & Johnson’s is to put the controversy to rest.
What’s the wait?
Johnson & Johnson faces two significant obstacles in its latest attempt to settle thousands of lawsuits that accuse its talc-based powders of containing toxic ingredients.
The company must first survive any legal challenges from opponents who may argue that the second case is just as flawed as the first. Additionally, it must convince 75% of all victims to vote in favour of the deal.
About two months ago, an appeals court rejected J&J’s initial attempt to use a unit’s Chapter 11 filing to settle over 40,000 lawsuits.
The court ordered the bankruptcy to be dismissed. Now, in a new case, J&J argues that the situation is different. The company states that it has support from many more cancer victims, suggesting it is acting in good faith.
It said that LTL has “secured commitments from over 60,000 current claimants to support a global resolution on these terms.”
Lawyers for the bankrupt subsidiary assert that the new case also meets a test established by the appeals court in Philadelphia, as evidenced by documents filed in court on Tuesday.
An appellate court had previously rejected a settlement proposed by LTL, and now the new LTL bankruptcy filing and settlement require approval from a bankruptcy court.
Surviving any potential legal challenges and convincing a vast majority of victims to approve the settlement could prove to be difficult, however.