J&J to Pay $505M to Talc Suppliers Driven Bankrupt by Baby Powder Cancer Lawsuits

Baby Powder cancer settlement will create a $280 million trust to be used to resolve personal injury claims against the two talc suppliers.

As Johnson & Johnson continues to face tens of thousands of Baby Powder cancer lawsuits involving claims that its talc powder products were contaminated with asbestos, increasing the risk of ovarian cancer and other health problems for users, the company also faces liability claims from former suppliers of the talc used in its products, indicating that they were driven out of business by the manufacturer’s actions.

Imerys Talc and Cyprus Mines Corporation were dragged into some of the talcum powder lawsuits filed against Johnson & Johnson over the past decade, each raising similar allegations that consumers were not adequately warned about the cancer risks adult women faced from applying the products around the genitals, which is one of the uses that Johnson & Johnson aggressively marketed for it’s products.

Imerys Talc filed for bankruptcy protection in Delaware in 2019, to manage the overwhelming costs associated with the litigation and liability it faced for withholding information about risks associated with talc and asbestos particles contained in the final products. Cyprus followed suit in 2021.

Both companies blamed their bankruptcies on the talcum powder cancer litigation and Johnson & Johnson’s handling of it, and have filed lawsuits against Johnson & Johnson, claiming the consumer products manufacturer should be held accountable for the cost they incurred in the talcum powder lawsuits filed against them.

On July 13, the three companies filed a joint motion (PDF) in the U.S. Bankruptcy Court for the District of Delaware, announcing a $505 million talc supplier lawsuit settlement. It calls for Johnson & Johnson to make an initial $225 million payment to the two companies, followed by an additional $280 million in proceeds paid from the company’s insurance policies, which will go into a settlement trust, which will be used to pay personal injury claims filed against the two talc mining companies.

A federal judge must still evaluate the settlement for fairness before granting approval.

“The proposed settlement is the result of months of hard fought arms’ length and good faith negotiations between the Parties and resolves all of these issues,” the joint motion states. “If approved, the Settlement is guaranteed to yield settlement proceeds of at least $505 million that will be transferred to the Debtors and/or the Trust for the benefit of current and future talc claimants no later than December 31, 2025, subject to the terms of the Settlement Agreement and the Plans.”

Individual Talcum Powder Cancer Settlements

The three companies note that the settlement does not prevent individuals from pursuing any direct claims against Johnson & Johnson, which is currently trying to get plaintiffs to agree to a $6.5 billion settlement offered in May, which would require a subsidiary, LTL Management, to take on the liability for the sole purpose of declaring bankruptcy.

It is a tactic known as the Texas Two-Step, which allows massive corporations to settle litigation for pennies on the dollar; usually to the detriment of plaintiffs with individual injury claims.

While two prior attempts to force all talcum powder lawsuits into the U.S. bankruptcy system failed, and this latest offer has been roundly criticized by many plaintiffs’ attorneys, claimants have until July 26 to vote on whether to accept the proposed talc bankruptcy settlement.