Johnson & Johnson (J&J) agreed to pay $8.9 billion to settle tens of thousands of lawsuits stemming from allegations that the talc in its Baby Powder and other products caused cancer in users.
That total more than quadrupled its original settlement offer of $2 billion by the New Jersey-based corporation in 2021. It also followed a January appeals court ruling that invalidated the company’s attempt to shift liability to a subsidiary that then filed for bankruptcy.
The total, if agreed upon, would be paid over 25 years.
A subsidiary filed for Chapter 11 bankruptcy for the second time and asked the court to approve the settlement plan, believed to be one of the largest in U.S. history. The filing took place in New Jersey, the same jurisdiction where the appeals court struck down its earlier settlement attempt.
J&J claimed the new settlement offer was endorsed by over 60,000 of the parties involved in the filings against the company. The conglomerate continued to deny that its products caused cancer, saying the accusations “are specious and lack scientific merit.”
Part of the proposed settlement, according to a company executive, is that J&J will not admit to wrongdoing.
— New York Post (@nypost) April 5, 2023
However, Global Vice President of Litigation Erik Haas agreed that defending against the charges in court could stretch out to a decade or more and be very expensive.
Meanwhile, the initial appeals court ruling against the New Jersey subsidiary meant J&J had to significantly increase the settlement offer. That earlier decision cited the lack of financial distress by the subsidiary in rejecting its claim to bankruptcy.
One of the plaintiff’s attorneys, Mikal Watts, said J&J met last weekend and agreed on the vastly increased settlement figure. The disbursements, if approved, will reach both current and future plaintiffs suffering from gynecological cancers and mesothelioma.
The risk remains, however, that some plaintiffs will reject the settlement.
That would mean another appeal to the same court that rejected the first subsidiary bankruptcy settlement. The 3rd U.S. Circuit Court of Appeals in Philadelphia would also hear any new appeal of the much larger proposal.
In fact, lawyers for thousands of the plaintiffs already released a statement condemning the proposed settlement. One attorney, Jason Itkin of Arnold and Itkin LLP, called it a “sham deal” that does not even cover most of the victims’ medical bills.