New Brunswick, NJ – Johnson & Johnson (J&J) has announced a substantial increase to its proposed settlement for legal claims related to its talc-based products. The healthcare giant plans to add $1.1 billion to the settlement, raising the total offer to over $9 billion, which would be paid out over 25 years. This move aims to resolve tens of thousands of lawsuits alleging that the company’s baby powder and other talc products caused cancer.
The revised settlement proposal was disclosed after J&J reached an agreement with plaintiffs’ lawyer Allen Smith, who represents 12,000 clients. Smith has agreed to recommend the settlement to his clients in exchange for “additional monetary and non-monetary benefits” for all claimants involved. J&J is preparing to finalize the settlement through a bankruptcy filing by a subsidiary, a process known as the “Texas two-step,” which allows the company to handle the litigation without filing for Chapter 11 itself.
Despite this substantial financial commitment, J&J maintains that its talc products are safe and do not cause cancer. The company’s offer, which aims to provide timely compensation for claimants, will require approval from a judge. J&J has stated that with Smith’s support, the settlement will meet the 75% approval threshold required for judicial endorsement.
Currently, J&J faces lawsuits from over 62,000 plaintiffs, with estimates suggesting the number could reach as high as 100,000 when including those who have not yet sued. Some legal representatives of cancer victims oppose the settlement, arguing that it does not adequately address all claims and continues to face significant resistance from various factions within the legal community.
The company’s previous attempts to resolve the litigation through federal courts were unsuccessful, prompting J&J to revisit its strategy with this increased settlement offer. The settlement covers claims related to ovarian and other gynecological cancers but excludes cases involving allegations of asbestos in talc products, such as mesothelioma.
The legal strategy employed by J&J involves transferring talc-related liabilities to a newly formed subsidiary, which would then declare bankruptcy. This approach is intended to consolidate all claims into a single settlement process, avoiding the need for J&J to declare bankruptcy itself.
J&J has previously estimated the net present value of the settlement to be around $6.48 billion, with actual cash payments over 25 years totaling $8 billion. The additional $1.1 billion increases this figure to above $9 billion, reflecting the company’s efforts to resolve the litigation comprehensively.
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