J&J Subsidiary Files for Bankruptcy in Major Step for Baby Powder Lawsuit Settlement
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Johnson & Johnson’s proposed multi-billion-dollar settlement for the tens of thousands of pending baby powder lawsuits has taken a significant step toward becoming a reality.
J&J’s Red River Talc Unit filed for bankruptcy in Texas court on Friday, according to Reuters. This will kick off the Texas two-step strategy necessary to complete the settlement, which will cover ovarian cancer lawsuits related to talc powder.
This strategy involves a subsidiary filing for Chapter 11 in place of J&J, shielding it from the liability of the lawsuits.
The success of the settlement is not a complete guarantee, however, as J&J has repeatedly attempted to achieve a settlement through this type of bankruptcy. Courts have shot down the company’s previous tries, most recently last month when an appeals court upheld a previous ruling against J&J.
If approved, the settlement is set to be paid out over 25 years and will total around $8 billion. The company had upped the settlement amount after adding another $1.1 billion to the proposal in early September.
According to Reuters, as J&J increased the settlement amount, they also secured the approval of a key plaintiffs’ lawyer who is representing 12,000 clients. This endorsement helped build support for the offer. The plan requires approval from 75% of plaintiffs to move forward.
The settlement does not cover mesothelioma cases, which make up a small number of the overall litigation against J&J and its baby powder.
If Approved, J&J Settlement Could Resolve Vast Majority of Baby Powder Lawsuits
If the bankruptcy and settlement plan is approved, Johnson & Johnson will likely be able to end much of the years-long litigation surrounding its talc-based baby powder.
As of this month, nearly 58,000 individual cases were pending in multidistrict litigation.
In a May press release, J&J said that the proposal could resolve over 99.75% of lawsuits claiming the powder causes serious health conditions like cancer.
In 2023, a judge withheld approval for J&J’s $8.9 billion settlement due to doubt that it would cause enough financial pressure to justify bankruptcy.
The Third Circuit Court of Appeals upheld that decision last month.
Lawsuits Stem From J&J Talcum Powder’s Ties to Ovarian Cancer
Lawsuits have claimed that J&J failed to warn customers about the potential ties and risks between its talcum-based baby powder and the development of ovarian cancer.
Scientists first found talc embedded in ovarian cancer tumors over 50 years ago, and studies have since suggested that there may be a link between the mineral and cancer. In July, the International Agency for Research on Cancer re-classified talc-based body powder as a “probable carcinogen.”
Tens of thousands of women who developed ovarian cancer after using the company’s baby powder products have filed lawsuits, with some winning massive verdicts.
In 2018, 22 women who sued J&J after developing cancer were awarded a staggering $4.69 billion verdict. That amount was later reduced to $2 billion.
J&J also agreed to a $700 million settlement with 42 states over its talcum powder marketing earlier this year.
Editor Lindsay Donaldson contributed to this article.