HOUSTON — A U.S. Bankruptcy Court has dismissed Johnson & Johnson’s recent attempt to settle thousands of lawsuits related to its talc baby powder. The ruling comes as a blow to the company, which had sought to resolve cancer claims with a proposed $9 billion package, potentially one of the largest mass tort settlements in history.
Judge Christopher Lopez found that Johnson & Johnson, along with its subsidiary Red River Talc, improperly solicited votes when attempting to secure support from 75% of claimants for the settlement. This led to the invalidation of most of the responses, ultimately contributing to the dismissal of the bankruptcy bid.
In a statement issued after the ruling, Johnson & Johnson asserted that a significant majority of claimants supported the settlement plan. However, the company has decided against appealing the court’s decision and will instead revert to the traditional court system to contest what it describes as meritless claims. This shift means that J&J will also withdraw approximately $7 billion it had earmarked for the bankruptcy effort.
The company claims to have already reached settlements in 95% of cases linked to mesothelioma related to its talc products, having concluded all state consumer protection claims and disputes with suppliers. Johnson & Johnson has been engaged in litigation over talc-related issues for 16 years, dating back to 2009. The first criticism came from Deane Berg, a 49-year-old woman from South Dakota, who attributed her ovarian cancer to the use of J&J’s baby powder. Though she initially received a $1.3 million settlement offer, she opted to continue her lawsuit, ultimately winning in 2013, yet left without any payout from the company.
Over the years, Johnson & Johnson has faced numerous lawsuits alleging that its talc products have caused cancer, resulting in substantial financial liabilities. In a notable case in July 2018, the company was ordered to pay nearly $4.7 billion to 22 individuals diagnosed with cancer.
In September 2021, J&J invoked a legal strategy known as the “Texas two-step,” which involved creating a new entity to assume a majority of its tort liabilities while having limited resources. This maneuver allowed the parent company to file for bankruptcy via the new entity, thus reducing its overall legal exposure.
Johnson & Johnson initially claimed that its settlement approach would resolve 99.75% of pending lawsuits related to talc. Despite its financial willingness to settle, the company has maintained that the lawsuits lack merit.
The future of J&J’s efforts to navigate these claims now rests in the traditional court system, where the company will prepare to challenge ongoing litigation.
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