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J&J’s Baby Powder Switch Sets an End Date for Legal Liability

May 20, 2020, 11:00 AM

Johnson & Johnson’s decision to phase out the talc-based version of its iconic baby powder may signal the company is moving out of litigation-defense mode over allegations the product causes cancer and preparing for a global settlement of almost 20,000 pending claims.

The move, characterized by J&J officials Tuesday as a “commercial decision,” allows the world’s largest maker of health-care products to create a deadline for future claims that the powder causes ovarian cancer and mesothelioma, legal experts say.

“This fences the litigation pretty neatly,” said Carl Tobias, a University of Richmond professor who teaches about product liability law. “It sets a date that says after this, the claims won’t fly because everyone is on notice about the talc allegations. That definitely makes settlement easier.”

J&J may be weary after six years of litigation with people who claim asbestos in its talc -- or simply the mineral itself –- caused the two types of cancer. Plaintiffs say the company knew of the product’s cancer risks by the early 1970s and failed to warn consumers. A California jury asked in 2018 whether it could force J&J to put a warning on the product.

Read More: Johnson & Johnson Discontinues Talc Powder in U.S., Canada

“This decision has no impact on our legal position,” said Kim Montagnino, a J&J spokeswoman. “We are confident in our legal strategy and our defense, which is supported by decades of scientific evidence showing our talc is safe and does not contain asbestos. The company will continue to defend the product at future trials.”

In some of those trials, juries across the U.S. have hit the company with billions of dollars in damages to compensate injured consumers and punish the company over its handling of the product. J&J has succeeded in getting most of those verdicts reduced or wiped out on appeal.

The company is still appealing a St. Louis jury’s $4.7 billion verdict. Jurors found the talc-based baby powder tainted by asbestos caused ovarian cancers in 22 women who sued.

J&J’s cornstarch-based baby powder, which has been on the market since 1980, will continue to be available in the U.S. and Canada. Other sellers of talc-based products, including Bausch Health Cos., maker of Shower to Shower powder, have replaced the mineral with cornstarch.

Johnson’s Baby Powder currently accounts for less than 1% of the company’s U.S. consumer-health revenue, according to Kathleen Widmer, chairman of the company’s North America consumer unit. Its sales have declined as consumer habits have changed.

Read More: J&J Recalls Lot of Baby Powder After Asbestos Trace Found

The company blames the drop in demand on “misinformation around the safety” of one of its most recognizable products and a barrage of lawyer advertising seeking out former baby powder users who developed cancer.

“Consumers are confused about the product,” Widmer said in an interview, noting that J&J has seen a recent surge of calls into its consumer-care center about talc. The company reported a 15% jump in talc suits in its most recent regulatory filing.

Despite the company’s denials, the talc phase-out is a likely first step toward a global resolution of cancer claims, said Elizabeth Burch, a University of Georgia law professor who specializes in mass-tort cases.

“It may still take a while because J&J may want to try more cases in hopes of driving down the value of such lawsuits, but this is clearly a move toward settlement,” Burch said. “It really gives the plaintiffs some heavy duty public-relations ammo and that could bring in a lot more cases.”

Under federal law and in most states, a company’s decision to take a product off the market can’t be introduced as evidence of wrongdoing or liability.

But in some states, the defense a company a presents to a jury may invite questions about its decision to stop selling a product, said Mark Lanier, a veteran plaintiffs lawyer who won the $4.7 billion talc verdict.

“If they open the door by saying they used talc from China and they’d never had any problem with it, then I could get a judge to let me ask: ‘Then why did you take it off the market?’” Lanier said in an interview.

A federal judge in New Jersey who is overseeing pre-trial evidence gathering in 16,000 cases last month rejected J&J’s bid to knock out all the ovarian cancer claims by attacking the scientific arguments made by the plaintiffs’ expert witnesses.

A lead lawyer in those cases said it’s high time J&J pulled its Baby Powder off the market.

“J&J did what they should have done decades ago,” said attorney Leigh O’Dell. “Now J&J should accept responsibility for the thousands of women who are suffering or who have died as a result of ovarian cancer caused by their talcum powder products.”

The consolidated case is In Re: Johnson & Johnson Talcum Powder Products, Marketing, Sales Practices and Product Liability Litigation, 16-md-2738, U.S. District Court, District of New Jersey (Trenton).

To contact the reporters on this story:
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;
Riley Griffin in New York at rgriffin42@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Peter Blumberg, Joe Schneider

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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