Manufacturing giant Johnson & Johnson has amassed a nearly $4 billion legal reserve to handle thousands of lawsuits, many claiming that its powder products were tainted with asbestos, according to a regulatory filing.
The company announced that its consumer health division has set aside a $3.9 billion war chest for litigation, most of it going to either fight or settle lawsuits over the contents of its talcum products, according to its Feb. 22 annual report.
Thousands of lawsuits have alleged that Johnson & Johnson’s powder products contained asbestos-laced talc, some of them spurred by a 2018 news report contending that the company knew these products — such as baby powder and body powder — were tainted and concealed it. Now, the company reports that it faces an estimated 25,000 lawsuits over talc allegedly in its body powders.
What a Difference a Few Months Can Make
In a separate filing with the U.S. Securities and Exchange Commission four months ago, the company had estimated that it would need to put aside $2.1 billion to cover its costs in settling talc-related lawsuits.
Johnson & Johnson said in its annual report, “The number of pending personal injury lawsuits continues to increase, and the company also continues to receive information with respect to potential costs and the expected number of cases.”
– Johnson & Johnson annual report
“Lawsuits have been primarily filed in state courts in Missouri, New Jersey and California, and suits have also been filed outside the United States. The majority of cases are pending in federal court, organized into a multi-district litigation.”
The $3.9 billion legal reserve dwarfs the $400 million Johnson & Johnson set aside for “talc related reserves and certain settlements” in 2019, though it matches the amount the company reserved for opioid litigation in 2019.
Speedy Settlements Presumed
Most of these cases involve a single powder-based product: Johnson’s Baby Powder. The company said it expects to resolve “the majority” of these cases in the next two to three years.
Johnson & Johnson is also being investigated by state attorneys general in addition to two consumer suits that are moving forward. States are still conducting investigations — 41 states “have commenced a joint investigation into the company’s marketing of its talcum powder products”— and subtly getting ready to sue. In the report, Johnson & Johnson officials said that these investigations have not resulted in any formal charges or allegations.
Additionally, several states have served the company with civil investigative demands — analogous to a subpoena — seeking documents and other information, Johnson & Johnson disclosed in the report.
