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Johnson & Johnson seeks solution to talc deal. The group has tentatively agreed to pay about $700 million to resolve an investigation by more than 40 states into the marketing of its talc-based baby powder. The settlement with attorneys general’s offices in most states is an “important step” for the New Brunswick-based company as it seeks to “reasonably put this matter behind it,” said Joseph Wolk, J&J’s chief financial officer. . The agreement will save the company capital that it would have had to pay in the event of losing the lawsuits.
The agreement
The American group stated in documents filed with the SEC that 42 states and Washington, DC, have launched an investigation into the marketing of talc-based products. In detail, New Mexico and Mississippi have filed lawsuits against the company for alleged violations of consumer protection laws. Now the agreement reached marks the last chapter of years of disputes and investigations into the safety of talc-based powder and its marketing.
Last year the company proposed to pay about $8.9 billion to settle tens of thousands of lawsuits alleging that J&J’s talc-containing powders caused the development of gynecological cancer or asbestos diseases. In a court filing last May, the group said it would set aside $400 million for states’ claims as part of a subsidiary’s proposed bankruptcy plan. But despite attempts at conciliation, the company has always maintained that its talc-based powders were safe, did not contain asbestos and did not cause cancer.
The causes for talc
Many of the lawsuits filed against J&J were brought by women who claimed they developed ovarian cancer after using Johnson’s talcum powder, once one of the company’s most popular products, or another former talcum powder product. Products that have now been removed from the market. The group also last year spun off its consumer health business into a standalone company, Kenvue, which sells a cornstarch-based version of Johnson’s talcum powder.
Attempts at a solution
The fact remains that the group still faces legal liability associated with the talcum powder sold in the United States and faces significant costs to resolve the extensive litigation. Various ways have been attempted to resolve the issue. The company, for example, has sought to use Chapter 11 bankruptcy cases to resolve mass claims in tens of thousands of lawsuits. But a New Jersey bankruptcy judge last year rejected the company’s second attempt to resolve these claims through bankruptcy, saying that the company’s affiliate LTL Management LLC was not in sufficient financial difficulty to require the legal protections under of Chapter 11. The group had created the LTL subsidiary in 2021 to move the talc claims to this new company to go to bankruptcy court and thus stop further jury trials. Erik Haas, J&J’s global vice president of litigation, said at a news conference last year that the company would ask the U.S. Supreme Court to overturn lower court rulings denying bankruptcy protection. Now comes a new chapter in the story, with the agreement just reached.