Johnson & Johnson Proposes $5.5 Billion Settlement in Talc Lawsuit Fight

Johnson & Johnson has proposed a $5.5 billion settlement to resolve a protracted legal battle involving thousands of lawsuits that claim its talc-based products caused ovarian cancer. The agreement is contingent on at least 95% of the remaining claimants participating.

The company, which has been defending against these claims for over a decade, previously saw a $9 billion settlement proposed by its subsidiary Red River Talc denied by a U.S. bankruptcy court judge last year. Johnson & Johnson opted not to appeal that ruling and instead continued to contest the cases in court.

In a recent development, a federal judge ordered plaintiffs to demonstrate why their remaining talc claims should not be dismissed, citing an inability by their witnesses to provide a direct causal link between the company's product and cancer. Erik Haas, Johnson & Johnson's worldwide vice president of litigation, stated that the court's order placed plaintiffs in an "untenable position of having to present specific causation evidence to maintain their claims that does not exist."

Under the terms of the proposed settlement, Johnson & Johnson would make an initial payment of no more than $3 billion next year, with no further payments due until 2028. "While we are confident the company would have ultimately prevailed with further litigation, as it has in the vast majority of cases tried to date, this resolution allows the company to put this matter behind it and remain focused on its mission to develop medicines and devices that save lives," Haas said.

Johnson & Johnson has previously settled approximately 95% of lawsuits related to mesothelioma, a cancer affecting the lining of organs such as the lungs and heart. The company has also resolved all state consumer protection claims and all talc-supplier disputes.

Shares for the New Brunswick, New Jersey-based company saw an increase of more than 2% in pre-market trading on Tuesday.