Yesterday, Johnson & Johnson has agreed to a $700 million settlement with 42 U.S. states and Washington, D.C., to resolve an investigation into the marketing of its talc-based products, including baby powder, which have been alleged to cause cancer. This settlement addresses accusations that the company misled consumers about the safety of its talc products, which were sold for over a century before being discontinued.
Despite settling, J&J did not admit any wrongdoing and maintains that its talc products are safe and do not cause cancer. The investigation was led by Florida, North Carolina, and Texas.
Florida Attorney General Ashley Moody hailed the settlement as a significant advancement for consumer product safety. However, Johnson & Johnson still faces tens of thousands of lawsuits related to its talc products. As of March 31, around 61,490 individuals were suing the company, primarily women with ovarian cancer and some with mesothelioma, a cancer linked to asbestos. J&J ceased selling talc-based baby powder worldwide last year, opting instead for corn starch, and asserts that its products do not contain asbestos.
The company has twice attempted to manage the litigation by placing a subsidiary created for its talc liabilities into bankruptcy, but both efforts were rejected by the courts. On May 1, J&J proposed a $6.48 billion settlement to resolve most of the ongoing litigation through a third bankruptcy filing and has reserved $11 billion to cover all talc liabilities.
Erik Haas, J&J’s worldwide vice president of litigation, stated that the company is exploring multiple avenues to achieve a comprehensive resolution of the talc litigation. He emphasized J&J’s commitment to addressing the claims of those who do not wish to participate in the proposed bankruptcy resolution through either litigation or settlement.
Starting in 2011, a female consumer claimed that she developed ovarian cancer after using Johnson & Johnson’s baby powder and shower gel for several decades, leading to a hysterectomy. Her lawyer argued that Johnson & Johnson had been aware of this risk since the 1980s but had concealed the cancer-causing risk of talc in its products for decades.
As a result, a jury in St. Louis, Missouri, ruled that Johnson & Johnson should compensate this consumer with $55 million. However, there was no official confirmation that Johnson & Johnson paid this compensation. In 2016, Johnson & Johnson faced its first significant penalty, being ordered to pay $72 million to a consumer who developed ovarian cancer after using their baby powder.
Subsequently, Johnson & Johnson became embroiled in a series of lawsuits related to the cancer risk of its talc products. By 2021, the number of lawsuits had exceeded 30,000. In October 2021, to manage the talc-related litigation, Johnson & Johnson established a subsidiary, LTL, and announced that LTL’s liabilities had reached $10 billion, applying for bankruptcy protection.
However, in January 2023, this application was officially rejected. The U.S. federal appeals court ruled that only companies facing direct financial threat could apply for bankruptcy protection. Since Johnson & Johnson itself had never claimed to be in direct danger, it could not place a subsidiary under court protection.
This recent settlement may signify the resolution of Johnson & Johnson’s decade-long controversy.
