Johnson & Johnson is again trying to use bankruptcy to settle talc cases for $8.9 billion
Johnson & Johnson is willing to pay $8.9 billion to plaintiffs over 25 years in order to settle cases that claim its talc products cause cancer.
CNN New York --
Johnson & Johnson will once again use bankruptcy courts to settle tens, of thousands of cases alleging that its talc products caused cancer. Over 25 years, the pharmaceutical company will pay $8.9 Billion to plaintiffs.
A J&J subsidiary called LTL filed for bankruptcy Tuesday. According to a regulatory filing, the strategy was designed to 'equitably, efficiently and resolve all claims arising out of cosmetic talc litigation in North America'. An earlier attempt to use Chapter 11 bankruptcy protection in order to resolve the talc case was rejected by an appellate judge, who ruled that the company could not go bankrupt as it wasn't financially distressed.
J&J's LTL spunoff increased the offer by $6.9B over the original $2 billion settlement. According to the company, it has received commitments from more than 60,000 claimants against J&J in support of the resolution.
According to the company, the settlement does NOT constitute an admission that there was wrongdoing. Johnson & Johnson have long maintained that talcum powder products can be used safely. J&J claims that it has won most of its talc litigations. However, juries have awarded billions in damages to some customers, supporting the claimants that the company's products caused their cancer.
Erik Haas (Johnson & Johnson's global vice president for litigation), stated that the company believes these claims are speculative and have no scientific merit. "However, as the bankruptcy judge acknowledged, resolving such cases in the tort system could take decades and impose substantial costs on LTL, and the system.
Haas stated that resolving claims through bankruptcy benefits both company and claimants because it will get money faster to claimants and allows J&J to end substantial litigation related to North American talc suits.
The proposed bankruptcy was supported by thousands of attorneys representing claimants.
Jason Itkin, a founding partner at Houston's personal injury law firm Arnold & Itkin LLP, stated that this sham deal doesn't even cover most victims' medical costs. Ovarian cancer victims can expect to pay $140,000-$1.4 million in medical costs. Even more expensive is mesothelioma.