Johnson & Johnson has seen at least a 28% surge in new lawsuits claiming its talc-based Baby Powder causes cancer a little more than five weeks after the company’s plan to resolve the cases was tossed from bankruptcy court.
(Bloomberg) — Johnson & Johnson has seen at least a 28% surge in new lawsuits claiming its talc-based Baby Powder causes cancer a little more than five weeks after the company’s plan to resolve the cases was tossed from bankruptcy court.
A New Jersey judge overseeing all the federal talc litigation said in a Sept. 6 court hearing that more than 11,000 new complaints have been filed, according to a court transcript. J&J had sought to resolve at least 40,000 talc suits for about $9 billion through the bankruptcy of its LTL Management unit, which was created to end health claims tied to talc allegedly tainted with a toxic substance. But a bankruptcy judge threw the case out July 28.
The escalation in claims is likely to complicate efforts by J&J to settle almost a decade of suits alleging talc-based Baby Powder causes ovarian cancer and another cancer linked to asbestos exposure. The company, which has appealed the bankruptcy’s dismissal, is preparing to defend itself in a state-court trial in California that’s slated to start next month.
“J&J has dug themselves quite a hole in the talc litigation, and it just keeps getting deeper and deeper,” said Carl Tobias, a University of Richmond professor who teaches about mass tort law. “They need to seriously think about adding some significant money to their settlement offer so they can get these cases off the books.”
J&J said it wasn’t surprised by the jump in lawsuits, because new ones weren’t permitted once LTL began bankruptcy proceedings in 2021. “Following the bankruptcy dismissal, we fully anticipated plaintiff lawyers would immediately file the cases they had been collecting since 2021,” the company said in an emailed statement. “Johnson & Johnson and LTL are prepared to return to the tort system and vigorously defend the Company in talc-related cases.”
Pulled From Shelves
The New Brunswick, New Jersey-based company pulled its talc-based powders off the market in the US and Canada in 2020, citing slipping sales. The world’s largest maker of health-care products replaced talcum with a cornstarch-based version. J&J vowed to remove all its baby powders containing talcum powder worldwide by the end of this year.
J&J faces a spate of jury trials early next year over allegations its executives knew since the early 1970s that talc contained trace amounts of asbestos, but failed to alert consumers or regulators. J&J contends its talc-based products don’t cause cancer and the company has marketed Baby Powder appropriately for more than 100 years.
As part of its maneuver in bankruptcy court, J&J offered nearly $9 billion to resolve all its current and future liability in the talc litigation, but plaintiffs rejected it as financially inadequate. An appeals court concluded J&J misused the bankruptcy process by having a unit seek Chapter 11 protections in hopes of fostering a settlement.
J&J filed a second bankruptcy case in hopes of reviving settlement chances, but a judge in New Jersey threw that case out, finding the talc litigation hadn’t caused J&J sufficient financial stress to justify using the bankruptcy process to resolve it. J&J pointed to a $4.7 billion jury verdict handed down in 2018 in a Missouri talc case as an example of why it couldn’t cope with the litigation via the regular tort system.
After the US Supreme Court refused to take J&J’s appeal of the award — which was reduced to $2.1 billion — the company ultimately paid the 20 women in the case. J&J has faced numerous talc trials over the past decade, winning some, losing others and settling some claims.
Holly Froum and Negisa Balluku, Bloomberg Intelligence analysts, said earlier this month J&J may wind up paying as much as $10 billion to resolve its talc liability after the bankruptcy’s dismissal. Earlier this year, Chris Schott, a JPMorgan Chase & Co. analyst, has estimated J&J’s total talc liability at between $8 billion and $10 billion.
In a February securities filing, J&J reported the company was facing 40,300 filed cases claiming its talc-based powders caused cancer. With the 11,000 new cases, that total case count has risen to 51,300. That number also doesn’t account for cases filed in state courts.
US District Judge Michael Shipp, who is overseeing federal-court talc cases consolidated for pre-trial information exchanges and test trials, said in the Sept. 6 hearing he doesn’t expect any cases to be tried before him until next year.
“It appears that the earliest the parties will be prepared to proceed to a bellwether trial will be either late 2024 or early 2025,” Shipp said, according to the transcript.
The case is In Re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, 16-md-2738, U.S. District Court for the District of New Jersey (Trenton).
–With assistance from Steven Church.
(Updates with J&J statement.)
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