Johnson & Johnson (JNJ) has made substantial progress in its efforts to settle thousands of lawsuits alleging its baby powder caused cancer. According to Bloomberg, over 75% of plaintiffs have agreed to a $6.5 billion settlement proposal, a critical milestone in the company’s attempts to limit its liability.
The settlement proposal, approved through a secret ballot in late July, signifies a major step forward for Johnson & Johnson. The company has established a separate unit to handle these lawsuits and aims to channel them into a controlled framework. A consulting firm has been hired to oversee the voting process as Johnson & Johnson navigates the ongoing legal challenges.
Despite this progress, Johnson & Johnson still faces significant legal hurdles. The company’s previous attempts to settle these lawsuits have encountered obstacles in court. The proposed settlement addresses claims that the talc-based version of Johnson & Johnson’s baby powder caused ovarian and other gynecological cancers.
Earlier this year, Johnson & Johnson announced it had resolved 95% of claims related to asbestos contamination in its baby powder. These claims alleged that asbestos, a known carcinogen, caused mesothelioma, a cancer affecting the tissue surrounding the lungs and heart.
If the settlement plan receives sufficient support, Johnson & Johnson could pursue a fast-tracked Chapter 11 bankruptcy filing, potentially in Texas, which is considered more business-friendly than New Jersey. The proposed settlement would distribute $6.5 billion over 25 years to resolve current and future claims related to ovarian and other gynecological cancers.
In May, Johnson & Johnson announced its intention to proceed with a $6.475 billion settlement to resolve numerous lawsuits related to ovarian cancer stemming from cosmetic talc litigation. The company has already paid approximately $5 billion to settle talc-related claims, including those involving mesothelioma and other cancers, as well as allegations of illegal marketing practices by U.S. states.
The majority of outstanding cases are being handled by a federal judge in New Jersey, where pre-trial information exchanges are ongoing. With the recent voting outcome, Johnson & Johnson is one step closer to potentially resolving a large portion of these claims through its proposed settlement plan.
As of Tuesday, JNJ stock is trading lower by 0.41% to $159.23. This news could have a significant impact on the company’s financial performance and stock price going forward.
