Johnson & Johnson Nears Settlement in Talc Dispute
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Johnson & Johnson might soon be nearing a settlement in its long-running dispute with former talc suppliers.
Imerys Talc America, once J&J’s primary source of cosmetic talc, and Imerys’ former owner Cyprus Mines Corporation, are in talks with J&J about a $505 million settlement. Both companies filed for bankruptcy – Imerys in 2019 and Cyprus in 2021. This happened after the lawsuits against J&J that alleged its talc caused cancer.
The proposed deal would see J&J contribute $225 million directly, with insurance picking up the remaining $280 million. Some of the money would partially fund the miners’ settlement trust for talc claimants, according to court documents cited by Fierce Pharma.
Further complicating matters, the talc suppliers argued they had indemnification agreements with J&J, meaning J&J should shoulder the lawsuits’ costs. However, J&J disputed that information in earlier court filings, according to Fierce Pharma.
J&J’s Talc Battle
Johnson & Johnson is facing over 57,000 talcum powder lawsuits in the U.S. District Court for the District of New Jersey. The plaintiffs claim the company’s talc-based personal hygiene products – like baby powder and Shower-to-Shower – caused them to develop ovarian cancer and other serious illnesses because of contaminated talc.
In 2019, the U.S. Food & Drug Administration announced that it found asbestos in Johnson & Johnson Baby Powder during a sampling test and advised people to stop using it. At the time, the company voluntarily recalled 33,000 bottles. Shortly after, the lawsuits began pouring in from both the women who claimed the talcum baby powder caused their ovarian cancer and from others who were diagnosed with mesothelioma, a rare cancer caused by asbestos exposure.
While J&J initially discontinued its talc products in the U.S. and later globally, it insists that its talcum powder did not and does not contain cancer-causing asbestos. However, a 2009 lawsuit, which used company emails as evidence, showed that Johnson & Johnson received scientific reports in 2009 highlighting potential health risks, but company officials ordered the report to be changed.
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Third “Texas Two Step” for J&J
Johnson & Johnson is making its third attempt to mitigate its talc-related liabilities through a ‘Texas Two-Step’ bankruptcy maneuver. The company established a subsidiary, LTL Management, to which it transferred its liabilities. A federal bankruptcy judge dismissed two earlier attempts.
By declaring LTL bankrupt, Johnson & Johnson aims to facilitate settlements. In May, the company proposed a $6.5 billion settlement for the ovarian cancer claims. A vote by plaintiffs is scheduled for July 26. If 75% of the plaintiffs approve, the settlement could proceed.
“While no amount of money is ever enough for the horrific suffering these women have undergone, this is an opportunity to get money now and avoid many years of additional protracted litigation,” attorney Jim Onder told Reuters.
This is an active lawsuit, and lawyers are still taking cases.
Editor Lindsay Donaldson contributed to this article.