By Dietrich Knauth
NEW YORK, July 29 (Reuters) – After years of failed attempts to resolve thousands of lawsuits alleging that its talc products caused cancer, Johnson & Johnson says it has reached a settlement, worth at least $5.5 billion, that could finally help bring an end to litigation that has dogged the company for over a decade.
WHAT IS THE TALC LITIGATION ABOUT?
Tens of thousands of people have sued J&J in federal and state courts, alleging that its talc-based baby powder and other products caused ovarian cancer.
J&J has long denied the allegations, arguing that decades of scientific testing show its talc products are safe and do not cause cancer.
Results at trial have been mixed: J&J won several cases, but the litigation has also produced billions of dollars in verdicts, settlements and legal costs over more than a decade.
WHAT MUST HAPPEN FOR THE SETTLEMENT TO TAKE EFFECT?
J&J says the settlement will move forward only if the deal is accepted by enough people to cover 95% of the estimated 76,000 ovarian cancer claims. That could happen in a few months, according to a plaintiffs’ lawyer who supports the deal.
HOW HAS J&J TRIED TO RESOLVE THE LITIGATION IN THE PAST?
J&J previously tried three times to end the talc litigation through bankruptcy. In each case, it created a new subsidiary, transferred talc liabilities to that company and then placed it into bankruptcy proceedings. Each bankruptcy was tossed out of court.
The bankruptcies were fiercely opposed by some plaintiffs’ lawyers, who argued that a financially healthy company such as J&J should not be able to use bankruptcy protections meant for businesses in financial distress.
A bankruptcy settlement, if it had been approved, would have bound people who did not agree to its terms and claims from people who develop cancer in the future.
HOW IS THIS SETTLEMENT DIFFERENT FROM THE PAST ATTEMPTS?
The new settlement does not attempt to bind unwilling participants or people who develop cancer in the future. It is a voluntary process that does not rely on a bankruptcy court’s approval.
It will pay claims much faster than the bankruptcy would have. Plaintiffs’ lawyers said the new deal will pay claims in full in less than two years, whereas the bankruptcy settlement would have paid out claims over 25 years.
IS THE SETTLEMENT LIKELY TO SUCCEED?
J&J and leading plaintiffs’ law firms – including firms that represent large numbers of plaintiffs with ovarian cancer claims and those that negotiated the deal – have expressed confidence that this deal will get across the finish line.
