Johnson & Johnson’s agreement to settle litigation with multiple states over its talcum-based baby powder is putting the company on a new path to addressing mounting lawsuits against its former flagship product, according to a WSJ Pro Bankruptcy commentary. After two failed attempts to address them in bankruptcy through its subsidiary, the healthcare-products company has pivoted toward a new strategy to tackle mass lawsuits against its talc-based baby powder, focusing on aligning various litigating groups for settlements. With Tuesday’s proposal to pay roughly $700 million to more than 40 states over alleged false marketing of the talc powder, J&J has potentially snatched victory with one group of claimants. Now, it can focus on settling with its most significant group of claimants — ovarian and mesothelioma cancer patients that have filed more than 50,000 cases alleging harm from the asbestos content in the baby powder. J&J’s ability to settle these cases would be crucial for successfully addressing all talc-related liabilities either in or out of court. Settling with each group would allow injury claimants to receive distribution more quickly than trying each case in federal courts. Reaching settlements with various groups would also be helpful in securing bankruptcy court approval for its restructuring plan, if J&J decides to pursue another chapter 11 filing.
