Johnson & Johnson has agreed to pay $8.9 billion over the next 25 years to settle allegations that its baby powder and other talc products caused cancer. More than 60,000 claimants have committed to supporting the proposed resolution, which would require approval in bankruptcy court. J&J's subsidiary LTL Management also refiled for Chapter 11 bankruptcy protection after its first attempt was thwarted. However, J&J continues to push back on the talc allegations, stating that the claims are specious and lack scientific merit.
The company ended sales of its talc-based baby powder globally this year after it faced thousands of lawsuits from customers claiming its talc products caused cancer due to contamination with the carcinogen asbestos. J&J spun off LTL management in October 2021 in an attempt to reduce its losses from litigation and settlement. The company funneled its talc lawsuits to the subsidiary and immediately filed for bankruptcy protection.
A judge affirmed J&J's ability to use the Chapter 11 strategy in February 2022. But the U.S. Court of Appeals for the 3rd Circuit overturned the ruling in January this year, saying neither LTL nor J&J had a legitimate need for bankruptcy protection because they were not in "financial distress."
Leigh O'Dell, one of the lead attorneys representing plaintiffs in the talc lawsuits, criticized J&J's new filing for bankruptcy protection, calling it a shameful attempt to run out the clock on people dying of cancer and convince some lawyers to give up. However, Mikal Watts, one of the plaintiff lawyers who negotiated the proposed settlement, said J&J committed to fairly compensate deserving women who have battled cancer due to the talc products.
J&J paid $7.4 billion in litigation expenses between 2020 and 2021, according to an annual filing. The company said talc litigation was a primary driver of legal costs during those years. J&J said last month that it would take the case to the Supreme Court.