J&J wins plaintiff support for $6.5 billion baby powder settlement – Bloomberg

Johnson & Johnson (NYSE:) has made significant progress toward advancing its $6.5 billion plan to settle thousands of lawsuits from individuals who claim its baby powder caused cancer, Bloomberg News reported on Monday.

More than 75% of those involved approved J&J’s proposal in a confidential vote that concluded in late July, the report said, citing sources familiar with the matter. This outcome, though not yet officially certified, would strengthen the company’s effort to manage its liabilities through a unit specifically created to handle these lawsuits.

With the number of lawsuits growing, J&J tapped a consulting firm to manage the voting process and tally the results. Despite this step forward, the litigation continues, and the company still faces major hurdles in its attempts to settle the cases.

The settlement offer covers claims that the talc-based powder caused ovarian and other gynecological cancers. J&J announced in May that it had resolved 95% of claims alleging that asbestos contamination in its baby powder led to mesothelioma, a type of cancer affecting tissues around the heart and lungs.

The pharma giant has consistently maintained that its talc-based powders did not cause cancer and that it marketed the product appropriately for over a century. The company discontinued the talc-based version last year, replacing it with a cornstarch-based alternative.

Although the settlement plan still faces potential legal challenges from plaintiffs who oppose the terms, this voting milestone could allow the J&J unit to request bankruptcy protection from a judge once again. Two previous attempts to secure this protection in New Jersey were rejected by a federal appeals court.

When a settlement gains support from three-quarters of the plaintiffs, companies can seek to expedite Chapter 11 bankruptcy cases. With this level of backing for J&J’s plan, the unit could move forward with a “pre-packaged” filing in Texas, considered a more business-friendly jurisdiction than New Jersey.

According to Bloomberg, J&J’s current proposal includes $6.5 billion in payments over 25 years to resolve existing and future claims related to ovarian and other gynecological cancers.

Separately, the company has already paid approximately $5 billion for talc-related claims, including those linked to mesothelioma, other cancers, and allegations of unlawful marketing by U.S. states. J&J has indicated that many more cases could still be filed.

Most of the pending cases are currently consolidated before a federal judge in New Jersey for pre-trial information exchanges.