Johnson & Johnson is setting aside nearly $9 billion to pay for potential liability after a lawsuit alleging its baby powder contained talc, causing cancer.
The new amount is more than four times what J&J previously set aside for potential liabilities, one of the largest product-liability settlements in U.S. history, according to WFAA.
J&J previously set aside $2 billion in October 2021 for the case. That figure now stands at $8.9 billion, which the company would transfer to its subsidiary LTL Management. The $8.9 billion would be paid out over the next 25 years, according to WFAA.
As a result, LTL Management will again file for Chapter 11 bankruptcy protection and ask the court for approval of the settlement plan. Johnson & Johnson set up this company specifically due to the lawsuit.
More than 60,000 claimants have filed lawsuits alleging harm from J&J’s talcum powder, according to the company in an SEC filing.
While J&J proposed settling the matter, it did not admit wrongdoing.
“The Company continues to believe that these claims are specious and lack scientific merit,” Erik Haas, worldwide vice president of litigation for Johnson & Johnson, said in the filing.
“However, as the Bankruptcy Court recognized, resolving these cases in the tort system would take decades and impose significant costs on LTL and the system, with most claimants never receiving any compensation. Resolving this matter through the proposed reorganization plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner, and enables the Company to remain focused on our commitment to profoundly and positively impact health for humanity.”
Chief Legal Officer of LTL John Kim said that plaintiff trial lawyers “continue to relentlessly advertise for talc claims, supported by millions of dollars of litigation financing all in the hopes of a massive return on investment.”
The lawsuit alleged that J&J’s talcum powder caused users to develop ovarian cancer or mesothelioma, according to WFAA.
According to an AP report, J&J stopped selling talc-based products in 2020 and replaced them with cornstarch.
