On the heels of a favorable ruling by a Los Angeles jury last month, Johnson & Johnson has forged an agreement with law firms representing plaintiffs that claim Johnson’s Baby Powder caused their ovarian cancer.
J&J has proposed a $5.5 billion settlement that could resolve roughly 76,000 multi-district litigation (MDL) and state-level ovarian cancer lawsuits. Law firms representing 99.75% of the plaintiffs have signed off on the proposal, J&J said.
If accepted by 95% of the plaintiffs, the deal would effectively end the company’s talc litigation in the U.S., which has spanned for more than a decade. J&J has largely resolved lawsuits from claims that the company’s talc products cause mesothelioma.
With news of the agreement, J&J’s shares climbed by about 2% late Tuesday morning. Since the start of the year, the company’s share price is up by 31%.
The proposed settlement follows a ruling in early June in which a Los Angeles jury sided with J&J in an MDL case involving three deceased women. The court ruled that J&J was not negligent in selling cosmetic talc products, with the plaintiffs’ counsel unable to show that the products caused their ovarian cancer.
The proposal comes after three failed attempts by the company to resolve the litigation through bankruptcy settlements. The last of the Chapter 11 efforts, which included a $9 billion settlement offer, was rejected last year by a Houston judge, prompting J&J to say that it would take on the cases in court.
J&J’s bargaining position was strengthened by the result of two recent rulings, including the Los Angeles case, allowing the company to secure an agreement at a lower settlement figure.
“Plaintiffs effectively conceded their inability to prove specific causation by withdrawing their experts on the topic in two bellwether cases,” Erik Haas, J&J’s litigation chief, said in a release.
“In a watershed moment, the Court thereafter ordered plaintiffs to show why the remaining claims should not be dismissed, confirming what we have maintained for years: that these claims lack scientific merit and were sustained only by unreliable expert opinions that could not survive rigorous judicial review,” Haas added.
The plaintiffs’ negotiation committee of the New Jersey MDL called the settlement “historic” and said that the compensation was awarded through a “transparent, tiered grid system based on objective criteria.”
“More than a decade of protracted litigation and three failed bankruptcies has left tens of thousands of women and their families waiting far too long for relief. Tragically, many did not live to see this day,” Christopher Seeger, the plaintiffs’ lead negotiation counsel in the MDL, said in a release.
The resolution will take “a number of months to complete,” a J&J spokesperson said. If it is accepted, J&J said it will pay $3 billion of the settlement in 2027.
Throughout the ordeal, J&J has stuck to its claim that there is no conclusive evidence that its talc products contained asbestos or caused cancer. The company took the products off the market, first in North America in 2020 and then the rest of the world in 2023. The company now sells a cornstarch version of its baby powder.
While J&J has touted its track record in the talc cases, the losses have been costly, including a $2.1 billion award secured by 22 ovarian cancer victims from 12 states in a 2018 decision in Missouri. In December of last year, a Baltimore jury ordered J&J to pay $1.56 billion to a woman who developed mesothelioma in the largest-ever award to an individual talc claimant. J&J is appealing that verdict, calling it “patently unconstitutional.”