On this photo illustration, a container of Johnson and Johnson baby powder is displayed on April 05, 2023 in San Anselmo, California.
Justin Sullivan | Getty Images
Johnson & Johnson has reached a tentative settlement to resolve an investigation by greater than 40 states into claims the corporate misled patients concerning the safety of its talc baby powder and other talc-based products, the corporate said in an announcement to CNBC on Tuesday.
Notably, the settlement doesn’t resolve the tens of hundreds of consumer lawsuits, a few of that are slated to go to trial this 12 months, alleging that those talc-based products caused cancer.
Those cases have for many years caused financial and public relations trouble for J&J, which contends that its talc-based products and now-discontinued talc baby powder are secure for consumers.
J&J said in an October securities filing that 42 states and Washington, D.C., had launched a joint investigation into its marketing of talc-based products. The corporate pays $700 million to settle the probe, its CFO Joseph Wolk told The Wall Street Journal on Tuesday.
Last 12 months, J&J only put aside about $400 million to resolve U.S. state consumer protection claims.
A J&J spokesperson refused to confirm the settlement figure to CNBC.
Erik Haas, J&J’s worldwide vp of litigation, confirmed the deal in an announcement without providing additional details.
“Consistent with the plan we outlined last 12 months, the corporate continues to pursue several paths to achieve a comprehensive and final resolution of the talc litigation,” Haas told CNBC. “As was leaked last week, that progress includes an agreement in principle that the Company reached with a consortium of 43 State Attorneys Generals to resolve their talc claims.”
Bloomberg first reported concerning the settlement earlier this month, citing sources accustomed to the matter.
J&J, which reported fourth-quarter results on Tuesday, has twice tried to resolve the buyer talc cases by offloading those liabilities right into a subsidiary, LTL Management, and having that unit file for Chapter 11 bankruptcy protection.
A Recent Jersey bankruptcy judge in July rejected the second bankruptcy attempt, stating that LTL Management wasn’t in sufficient financial distress. A U.S. appeals court in April dismissed the primary bankruptcy attempt for a similar reason.
As a part of the newest failed bankruptcy attempt, J&J proposed to pay $8.9 billion to talc claimants.
Haas said during an earnings call in October that the corporate is asking the Supreme Court to overturn the lower court rulings denying bankruptcy protection to LTL Management.
J&J also said late last 12 months that it’s considering a 3rd bankruptcy attempt because it tries to push forward with that proposal.
J&J ended sales of its talc-based baby powder globally last 12 months.
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