Manufacturing giant Johnson & Johnson has amassed a nearly $4 billion legal reserve to handle thousands of lawsuits, many claiming that its talcum 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
Four months earlier, the manufacturer estimated it would have to set aside only $2.1 billion to handle talc-based lawsuits, as shown in a separate report filed with the Securities and Exchange Commission.
“The number of pending personal injury lawsuits continues to increase, and the company continues to receive information with respect to potential costs and the anticipated number of cases,” Johnson & Johnson wrote in its 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 number of pending personal injury lawsuits continues to increase, and the company continues to receive information with respect to potential costs and the anticipated number of cases — Johnson & Johnson annual report
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.
In addition to the consumer suits, Johnson & Johnson also faces state investigations. According to the annual report, 41 states have “commenced a joint investigation into the company’s marketing of its talcum powder products.” Johnson & Johnson officials noted in the report that this multi-state investigation has yet to file charges or make any formal 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.