Latest Developments In The Legal Battle For Mesothelioma Victims Of Asbestos-Contaminated Johnson & Johnson Talcum Powder

It was reported on 5 April, that Johnson & Johnson has offered $8.9 billion to settle all lawsuits brought against the company arising out of the use of their famous product, Johnson’s baby powder. The product is alleged to have been contaminated with asbestos which is believed to have caused malignant mesothelioma and/or ovarian cancer in thousands of plaintiffs.

Johnson & Johnson have always strenuously denied their product contained asbestos fibres or that it could cause cancer and has vigorously defended thousands of lawsuits brought against it.

In the course of litigation against Johnson & Johnson however, documents have been disclosed which prove that the company knew for decades about the risk of asbestos exposure linked to its talc products, including its famous baby powder which first went on sale 129 years ago. The company had always pushed back on unhelpful claims by researchers and scientists but finally faced a flood of lawsuits in recent years, alongside Government investigations. In 2021, the FDA reported that having tested Johnson’s baby powder, it was found to contain asbestos fibres. The company continued to deny contamination.

Late in 2022, whilst continuing to deny their product could cause cancer, Johnson & Johnson announced that they would cease to sell their talc based product as of 2023 and would manufacture a corn starch based body powder in its place. This was a huge change of strategy, for the company for whom Johnson’s baby powder had been a longstanding, trusted brand name, which had earned them vast revenues over decades.

Late in 2021, Johnson & Johnson had transferred their talc liabilities to a subsidiary company, LTL Management, which then declared itself to be bankrupt and unable to meet the claims against it. The company filed for Chapter 11 bankruptcy in the US Federal Court, which brought all claims against the company to a standstill.

The company’s bid to have its bankruptcy petition accepted was initially dismissed on the grounds that the court could see no good reason why the subsidiary should be declared bankrupt. Johnson & Johnson’s sales in 2022 were declared to be US$94.9 billion. LTL Management had initially set aside $2 billion for pay-outs to plaintiffs.

Following the Appeal Court’s rejection of the plan, Johnson & Johnson said it would set aside an additional $6.9 billion to cover the pay-outs, without any admission of wrongdoing. In making this proposal, the company’s Worldwide Vice President of Litigation, Erik Haas, maintained the claims against the company “are specious and lack scientific merit”, but they would have otherwise taken decades and been extremely costly to resolve. “Resolving the matter through the proposed bankruptcy reorganisation plan is more equitable, efficient and will allow plaintiffs to be compensated in a timely manner, whilst enabling the company to focus on its commitment to profoundly and positively impact health for humanity”.

Effect of possible settlement on existing Johnson & Johnson victims and future claims

Johnsons’ announcement of an increased settlement came as welcome news, but how would this be allocated among the existing victims who had filed claims against the company or who might unfortunately, yet develop an asbestos-related cancer as a result of exposure to the deadly fibres in talcum powder used many years previously?

Whilst $8.9 billion may appear to be a huge sum of money and lots of plaintiffs who have been waiting for their claims to be resolved may feel hope at this news, many plaintiff representatives feel that if the settlement is given approval, (noting the details of the scheme will have to be finalised), Claimants are likely to be undercompensated as the money which J&J has offered is nowhere near enough.

Previous bankruptcy settlements such as this have resulted in a tariff based scheme whereby applicants who can satisfy the scheme’s criteria, become eligible for a fixed payment. Unfortunately, these payments have not come close to the level of damages which might be awarded by a jury at a successful trial. UK based claimants usually recover less than their US counterparts and are likely to receive a relatively low percentage of the full value of a scheme payment, if past experience is anything to go by. In addition, any future claims are likely to have to be brought under the scheme first.

Ultimately, the scheme has to receive the support of plaintiffs and their representatives if it is to be approved by the court. Understandably, plaintiffs and their families who have been battling for compensation from Johnson & Johnson, may well by now welcome any settlement proposal.

The Court battle is not yet over. We await the Court’s decision.

Link to previous update here.