Johnson & Johnson Announces $8.9 Billion Talc Settlement Plan

Johnson & Johnson has agreed to contribute up to $8.9 billion, payable over 25 years, to resolve all current and future talc claims. The news came with the announcement that its subsidiary LTL Management LLC (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection to obtain approval of a reorganization plan that will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the company and its affiliates in North America.

The $8.9 billion is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL’s initial bankruptcy filing in October 2021.

LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms, said Johnson & Johnson.

J&J, in its media statement, penned the following: “Importantly, neither LTL’s original filing nor this re-filing is an admission of wrongdoing, nor an indication that the Company has changed its longstanding position that its talcum powder products are safe. Johnson & Johnson and its other affiliates did not file for bankruptcy protection and will continue to operate their businesses as usual.”

Johnson & Johnson announced it would stop selling talc globally in 2023. In 2020, it began to pull talc from its baby powder products sold in North America.

“The Company continues to believe that these claims are specious and lack scientific merit,” said Erik Haas, worldwide VP of litigation, Johnson & Johnson. “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.”

“Notwithstanding the lack of scientific validity to these claims, 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. LTL’s goal has always been to resolve these claims quickly, efficiently and fairly for the claimants, both pending and future, and not incentivize abuse of the legal system. We filed the original action in good faith, and, heeding the Third Circuit’s guidance, have filed this new case to effectuate that intent,” added John Kim, chief legal officer of LTL.

J&J said it has won the vast majority of cosmetic talc-related jury trials that have been litigated to date and reiterates that none of the talc-related claims against the company have merit. The claims are premised on the allegation that cosmetic talc causes ovarian cancer and mesothelioma, a position that has been rejected by independent experts, as well as governmental and regulatory bodies, for decades, said J&J.

Last year, the United States Bankruptcy Court for the District of New Jersey ruled that LTL commenced its initial bankruptcy case in good faith, expressing the “strong conviction that the bankruptcy court is the optimal venue for redressing the harms of both present and future talc claimants in this case—ensuring a meaningful, timely, and equitable recovery.” On appellate review, the United States Court of Appeals for the Third Circuit agreed that bankruptcy is “an appropriate forum for a debtor to address mass tort liability.”

However, the Third Circuit also concluded that the support the Company provided to LTL in advance of the filing required the dismissal of the original bankruptcy case. The refiled case addresses the Third Circuit’s concerns and relies on well-established legal precedent to obtain the equitable resolution available only in bankruptcy.

LTL’s Chapter 11 case was filed in the U.S. Bankruptcy Court for the District of New Jersey.