Johnson & Johnson continues to face legal challenges over allegations that its talcum powder causes cancer. Recently, a judge dismissed the company’s latest attempt to settle thousands of lawsuits through bankruptcy, marking the second time J&J’s bankruptcy strategy has been rebuffed. We take a look at the timeline of the talc litigation below.
Johnson & Johnson is planning on spinning off its consumer unit, which will be known as “Kenvue.” The separation of the unit could happen later this year.
The company’s talc-related troubles started in 2009 when the first lawsuit was filed against J&J alleging its talc products caused a woman’s ovarian cancer. By 2016, J&J suffered its first significant legal defeat with a $72 million verdict. In 2018, a jury ordered the company to pay $4.69 billion to cancer victims.
Johnson & Johnson began selling its Baby Powder brand of talcum powder in 1894.
Now, the company has stopped selling the product in North America. J&J announced that decision in May 2020 facing rising legal costs. It has asserted that its products were safe. In 2021, J&J implemented a contentious bankruptcy strategy to shield itself from legal liability, transferring talc lawsuits to a new subsidiary, LTL Management, which immediately filed for Chapter 11.
An appeals court overturned this move in January, ruling that J&J could not offload liabilities while financially sound. Undeterred, LTL filed for bankruptcy again in July 2023, citing a proposed $8.9 billion settlement deal. A judge, however, rejected the petition, ruling that the talc lawsuits did not put LTL into enough “financial distress.”
Now, after almost 38,000 lawsuits and roughly $4 billion in payouts, the company continues to navigate litigation while phasing out talc internationally. The company also plans to appeal the latest bankruptcy dismissal. But after more than a decade of courtroom battles, J&J remains embroiled in allegations that its iconic talc products posed a risk to consumers.
A J&J talc litigation timeline
Key moments in Johnson & Johnson’s talc litigation history, from the first filed lawsuit in December 2009 to the latest court ruling in July 2023.
An overview of important events in the talcum-powder litigation:
- December 4, 2009: Deane Berg files first lawsuit against J&J alleging its talcum products caused ovarian cancer, marking the start of ongoing litigation. Berg would go on to win the case in 2013, but the jury did not award damages.
- February 22, 2016: A jury orders J&J to pay $72 million in damages in a civil case. The decision was its first major courtroom loss in the talc cases.
- July 12, 2018: J&J ordered to pay a $4.69 billion to cancer victims, stoking a surge of lawsuits.
- May 19, 2020: With legal costs mounting, J&J stops selling talc baby powder in North America amid safety concerns.
- October 14, 2021: J&J shifts talc lawsuits to a new subsidiary, LTL Management, which declares bankruptcy.
- August 11, 2022: J&J announces plans to phase out global sales of talc baby powder, transitioning to cornstarch formula.
- January 30, 2023: An appeals court overturns J&J’s bankruptcy strategy, ruling it improperly offloaded lawsuits.
- July 28, 2023: A judge rejects J&J’s second attempt at a bankruptcy settlement, dealing the company another setback.
Analysis
The talcum-powder litigation, along with the COVID-19 pandemic, has driven financial turbulence for Johnson & Johnson in recent years. The initial 2009 lawsuit, which concluded four years later, had a minimal impact on the company’s stock performance. In May 2020, J&J halted the sale of its talc-based baby powder in the U.S. and Canada. This decision, part of a wider product re-evaluation in the early days of the pandemic, occurred in a period of stock price fluctuation and a sales drop. Yet, the company’s stock price remained fairly stable. The company’s diverse portfolio, strong financials in pharma and medical devices and strategic initiatives such as its decision to spin off its slower-growing consumer business paint a more complex financial picture.