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Johnson & Johnson to Pay $700 Million to Settle State AG Lawsuits

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53,000 individual lawsuits unaffected

Trenton, NJJohnson & Johnson has reportedly agreed to pay $700 million to settle talcum powder lawsuits brought by 42 states. These state lawsuits allege that the company wrongfully marketed a product that it either knew or had reason to know was dangerous to human health.

This settlement affects only this subset of talcum powder lawsuits and would, at most, cap a portion of J&J’s total potential liability. It has little bearing on the 53,733 personal injury lawsuits consolidated  in the US District Court, District of New Jersey (Trenton). Those looming lawsuits may subject J&J to far greater financial liability.

At most, settlement of the state consumer protection lawsuits may free other assets to pay the liabilities resulting from the personal injury cases. It may also indicate the general direction of any new settlement offers that J&J may propose.

State consumer protection claims only

The proposed settlement would avert potential lawsuits brought by a variety of states under state consumer protection laws. These lawsuits allege that J&J hid links between various cancers and the talc in products including Shower-to-Shower, and J&J’s iconic Baby Powder. The company and representatives for state attorneys general continue to negotiate the specific terms of the deal but appear to have reached agreement on the topline number.

As of early January, Mississippi and New Mexico had filed consumer protection lawsuits against J&J over its deceptive marketing. The proposed settlement does not cover those lawsuits since the states seek higher amounts than would be permitted under the terms of the settlement. Mississippi law, for example, permits recovery of $1,000 per bottle of Baby Powder. That fine, multiplied by 6 million bottles sold in the state since 1974, would yield $6 billion in damages.

Warming to the challenge, an additional 42 states and the District of Columbia had launched “a joint investigation into the company’s marketing. The representatives of other states had issued additional demands for information from J&J.

Cancer link

Talc is a naturally occurring mineral. In its raw state, some talc contains asbestos, which has long been linked to cancers in and around the lungs when inhaled. In addition, personal hygiene powders, such as J&J’s Baby Powder and Shower-to-Shower powder, have been associated with ovarian cancer, endometrial cancers, stomach cancer and pleural mesothelioma.

However, with both the state consumer protection lawsuits and individual personal injury lawsuits, the pivotal legal issue is that J&J either knew or had reason to know of this danger since the 1970s, but failed to warn consumers. As reported by Reuters:

“[F]rom at least 1971 to the early 2000s, the company’s raw talc and finished powders sometimes tested positive for small amounts of asbestos, and that company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public.”

J & J’s talc supplier added warning labels in 2006. J&J, itself, never posted warnings on Baby Powder bottles and did not stop selling talc-based baby powder globally until 2023.

Personal injury lawsuits

Tens of thousands of people who developed various cancers after using talc-based products have filed product liability lawsuits against J&J and other manufacturers, suppliers, distributors and other parties. Many of these lawsuits seek compensatory damages as well as punitive damages, based on the company’s outrageous or especially negligent disregard of the danger posed by the product.

Most of the proceedings were stayed during the pendency of two separate Chapter 11 bankruptcy proceedings filed by LTL Management, a subsidiary of J&J created specifically to shield the company from crushing financial liability. The second bankruptcy petition has now been denied, although there exist rumors of a third.

Bellwether trials in the consolidated lawsuits are expected to begin in 2024. These are likely to stimulate settlement negotiations in the 50,000 pending personal injury claims.

Chipping away at a mountain of liability

In connection with its second LTL bankruptcy filing, J&J offered $9 billion to settle all talc claims. Both the first and second bankruptcy filings were dismissed as an abuse of the bankruptcy process, since J&J did not show adequate financial justification for limiting its liability. As of January 19, 2024, the company posted a net worth of $389.21 billion.

Its latest settlement strategy seems to be to limit liability on a category-by-category basis. As the 2024 bellwether trials wind to a conclusion, it would not be surprising to see similar categorical settlement offers – perhaps covering all personal injury lawsuits, perhaps applying on a diagnosis-by-diagnosis basis. Time, however, is no friend to a group of claimants who are desperately sick or dying.


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