Johnson & Johnson to Increase Settlement Offer to $9 Billion in Ongoing Talc Lawsuits

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Johnson & Johnson (J&J) has announced plans to enhance its settlement offer by an additional $1.1 billion to resolve numerous legal actions alleging that its baby powder and other talc-based products caused cancer. This adjustment will raise the total settlement amount to over $9 billion, which will be paid out over a 25-year period.

According to sources familiar with the situation, J&J has reached an agreement with a plaintiffs’ lawyer representing 12,000 clients to recommend this increased settlement offer. This development follows previous support from other claimants. The healthcare company is preparing to file for bankruptcy through a subsidiary to finalize the proposed settlement by the end of the month, although J&J itself will continue operating without seeking Chapter 11 protection. The company maintains that its talc products are safe and do not cause cancer.

The timing of the subsidiary’s bankruptcy filing might be adjusted based on how the additional votes from claimants are counted. Allen Smith, the plaintiffs’ lawyer who is now backing the settlement, agreed to the offer in exchange for “additional monetary and non-monetary benefits for all talc claimants” in the proposed bankruptcy plan, which is expected to receive judicial approval.

J&J has not disclosed the exact amount of the additional funds it plans to allocate and has not responded to inquiries about the timing of the bankruptcy filing.

Earlier this summer, J&J set a deadline of July 26 for talc claimants to vote on the proposed bankruptcy settlement. In August, the company extended the voting period at the request of plaintiffs’ lawyers, including Smith. According to Smith, J&J’s current settlement offer represents “the best and most realistic option available for claimants to recover their claims in a timely manner.”

J&J anticipates that with the support from Smith’s clients, it will secure approval from more than 75% of claimants. This level of support is necessary for a judge to approve the bankruptcy settlement J&J has proposed. The additional votes are expected to ensure J&J surpasses this threshold.

J&J faces lawsuits from more than 62,000 plaintiffs, with the number rising to approximately 100,000 when including those who have not yet filed lawsuits. Some attorneys representing cancer victims are opposing J&J’s settlement plan, engaging in a contentious battle with the company. Andy Birchfield, a leading opponent, stated that his law firm, which shares representation with Smith, has seen significant rejection of J&J’s settlement offer from clients. Birchfield and other attorneys will continue to challenge the company’s bankruptcy plan.

J&J’s previous settlement proposal had a net present value of about $6.48 billion, with actual cash payments totaling $8 billion over 25 years. The new increase in the settlement offer raises this amount to over $9 billion.

After facing setbacks in federal courts, J&J is once again attempting to resolve the talc litigation through a “Texas two-step” bankruptcy maneuver. This strategy involves transferring its talc liabilities to a newly created subsidiary, which then files for Chapter 11 bankruptcy. The aim is to consolidate all claims into a single settlement while allowing J&J to avoid filing for bankruptcy itself.

The latest settlement offer addresses claims related to ovarian and other gynecological cancers, which constitute the majority of the litigation against J&J. It does not cover other claims, such as those alleging that asbestos in talc caused mesothelioma, a severe cancer. J&J asserts that its talc products do not contain asbestos.