By Enyichukwu Enemanna
World’s largest maker of health-care products, Johnson & Johnson on Tuesday said it is ready to pay $8.9 billion to resolve all cancer lawsuits tied to its talc-based powders by its former customers in the United States.
J&J says it will settle the complaints from about 60,000 claimants and set up a fund in US bankruptcy court in Trenton, New Jersey, to cover possible future claims.
The company has already withdrawn its talc-based baby powder and others, including Shower to Shower, from the market.
Women and men blamed J&J’s 129-year-old baby powder for causing ovarian cancer and mesothelioma, a cancer specifically tied to asbestos exposure.
Victims allege internal J&J documents dating back to the early 1970s show workers warning managers about traces of asbestos found in talc bottled for baby powder.
The victims say J&J executives should have warned consumers about the powders’ health risks.
“This is the largest products liability settlement ever realized after a bankruptcy filing,” said Mikal Watts, one of the plaintiff lawyers who negotiated the deal with J&J. “Our job is to get our clients restitution for their injuries, and this settlement is the culmination of over a decade of fighting for justice.”
J&J argues the talc cases pose a financial threat to the company despite its more than $478 billion market capitalization. That’s because juries could repeatedly hit J&J with multi-billion verdicts that threaten its financial health, its lawyers contend.
J&J’s LTL Management unit filed a new Chapter 11 case to provide a basis for the trust, which outlines terms for settling the decade-long litigation.
An earlier filing, which didn’t include a settlement, was rejected in January after an appeals court found J&J erred in using bankruptcy to block juries from hearing lawsuits and handing out damage awards. J&J wants a reorganization plan for LTL that caps all the talc liability.
“Resolving this matter through the proposed reorganization plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner,” Erik Haas, J&J’s world-wide head of litigation, said in a release.
Under the terms of the deal, J&J agreed to pay $6.5 billion to resolve current and future ovarian cases, provide $2 billion for current and future mesothelioma cases and hand over $400 million to states who’ve sued J&J for failing to warn consumers about the health risks tied to its talc-based powders or threatened to sue, according to people familiar with the deal who asked not to be identified because the details aren’t public.
Monies in the settlement will be paid out over 25 years.
