HOUSTON – Johnson & Johnson’s recent decision to put a $6.5 billion settlement offer to a vote by claimants in its long-running litigation over ovarian cancer injuries from use of its talc-based products may see the case end and a quicker financial recovery for plaintiffs.
Under the settlement offer, J&J would pay claimants with ovarian cancer a total of $6.475 billion over 25 years. The proposal does not apply to plaintiffs alleging they developed mesothelioma from the use of J&J’s products, only those with ovarian cancer.
If 75% of all applicable injury claimants were to vote in favor of accepting the settlement, J&J would place an affiliate in bankruptcy as a way to hold all talc plaintiffs to the settlement terms.
It would be the company’s third try at resolving the tens of thousands of claims against it through bankruptcy proceedings, after two prior attempts failed.
J&J redirected liability for talc-related claims in 2021 to an affiliate, LTL Management, which had been set up to transfer such pending claims to bankruptcy court, in lieu of battling them in jury trials – using this divisional merger in a legal strategy known as the “Texas Two-Step.”
Though LTL filed separately for Chapter 11 on two occasions, in both 2021 and 2023, in order to use bankruptcy proceedings to lead to a settlement of talc claims, a court in New Jersey (where J&J is based) ruled it lacked the “financial distress” required for bankruptcy protection, because it could access billions of dollars in J&J’s money to pay claims.
LTL now plans to file for Chapter 11 in Texas this time around, where it could potentially get a different ruling on the “financial distress” standard associated with bankruptcy proceedings.
Kasia Mulligan, Executive Director of Patients Come First, believes that patients will have the financial relief and closure they seek under the company’s proposed settlement terms.
“As we have seen with this specific case, lengthy lawsuits can take significant a mental and financial toll on claimants, and do not always guarantee they will receive the outcomes they are looking for. However, this resolution plan gives claimants the opportunity to choose a favorable outcome and close this chapter for good,” Mulligan said.
Mulligan continued that the company’s suggestion to have claimants vote on the settlement offer, could expedite their financial recovery.
“By giving claimants a clear and efficient path to resolution, they should receive the recovery they are hoping for. By offering a vote, this recovery process could be expedited, and consumers could recover their claims sooner rather than risking more days in court without a guarantee that they’ll recover anything in trial,” Mulligan stated.
“In this case, even the attorneys representing most of the claimants agree this a good deal and empowers them to end this lengthy case for good. In fact, the plan guarantees claimants a payout of $6.475 billion over 25 years, offering a far better recovery than what could be achieved at trial.”
Mulligan concluded that a settlement would serve to not just provide relief to plaintiffs, but also allow J&J to refocus more of its attention and resources to pharmaceutical innovation.
“Lengthy litigation drains resources and consumes a significant amount of time of all parties involved and also adversely impacts our healthcare system and those that rely on it for care. This settlement offers consumers the best path to recover claims and end the lengthy litigation process. By shaving off years of litigation, this deal could help the claimants get back to their lives and also let the innovator refocus their efforts on researching and discovering new treatments and novel therapies that could improve the health of patients,” Mulligan said.
At the end of 2023, J&J faced lawsuits from over 59,000 talc-related plaintiffs, with more to come in future decades as people who used the talc products develop illness.
The company said in May that ovarian cancer-related talc claims which could resolved through the settlement offer comprise 99.75% of the pending talc suits against it – while adding it entered settlements for 95% of the mesothelioma-related claims and that others would be resolved apart from Chapter 11.
From the Southeast Texas Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com