Tuesday, December 05, 2023

Johnson & Johnson is pushing to settle baby powder cases linked to asbestos

Jef Feeley, Bloomberg News on Dec 4, 2023


Johnson & Johnson is making a push to resolve lawsuits claiming its talc-based Baby Powder causes cancer linked to asbestos exposure to avoid facing some jury trials next year, according to people familiar with the effort.

A trio of law firms have reached agreements for settlements covering about 100 cases, said the people, who declined to be identified because they weren’t authorized to speak publicly. The financial size of the accords are being kept private, the people added.

The deals may be mentioned Tuesday as part of J&J’s investor presentation at the New York Stock Exchange if company officials update shareholders about the plan for corralling the decadelong talc litigation, the people said. The session’s main focus is the company’s long-term growth outlook and product pipeline.

The company is striving to find a way to resolve all current and future baby powder cases after a judge nixed its attempt to settle them for $9 billion as part of a unit’s bankruptcy filing. The deals are part of the manufacturer’s multipronged strategy to deal with the lawsuits, which have created a drag on its shares.

J&J declined to comment.

‘Hammered by Juries’

“It looks like they are finally stepping up to the plate and acknowledging they are going to have to settle cases to be done with this,” said Carl Tobias, a University of Richmond professor who teaches mass-tort law. “Ridding themselves of trial settings can only work in their favor since they’ve been getting hammered by juries.”

The New Brunswick, New Jersey-based company pulled its talc-based powders off the market in the United States 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 that its executives knew since the early 1970s that talc contained trace amounts of asbestos, which can cause a cancer called mesothelioma, but failed to alert consumers or regulators. J&J contends that its talc-based products don’t cause cancer and it has marketed Baby Powder appropriately for more than 100 years.

The company faces more than 50,000 suits accusing it of concealing baby powder’s cancer risk to protect its iconic product. Most of those claims are from women with ovarian cancer. The majority of the cases are consolidated before a federal judge in New Jersey.

Inventory Settlements

J&J has reached agreements to do so-called inventory settlements with law firms such as Kazan, McClain Satterley & Greenwood, and Levy Konigsberg to resolve all their mesothelioma cases, the people said. The company has come to similar terms with the Motley Rice firm, the people added.

Joe Satterley, a Kazan lawyer who has won and settled multiple talc cases against J&J, declined to comment on whether he’s settled his inventory of mesothelioma cases. Joe Rice, Motley Rice’s co-founder, also declined to comment. Moshe Maimon, a Levy Konigsberg lawyer who has won talc cases at trial, didn’t immediately respond late Monday to phone and email messages seeking comment.

The settlements resolved a case that was already on trial in state court in Oakland, California, in November and will head off trials that were supposed to start in January and March in state court in New Jersey, the people said. J&J still faces a mesothelioma case in state court in Minnesota later this month, the people added.

Besides getting trials off the calendar, J&J is trying to clear the way for a third bankruptcy filing to resolve the talc litigation in its entirety. Erik Haas, J&J’s lawyer overseeing the talc litigation, said in an October earnings call that the company was “pursuing a consensual resolution of the talc claims through another bankruptcy.”

The consolidated 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).


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