Johnson & Johnson will pay 75 million dollars to resolve a consumer protection lawsuit filed by Mississippi about him baby powder of the company, resolving a lawsuit in which the state had requested up to 6 billion dollars.
The pact comes as attorneys for the state and J&J were preparing for a bench trial next month in Jackson, Mississippi. This was stated by sources who asked not to be identified because the agreement is not yet public. Mississippi was one of only two states to sue over J&J's marketing of baby powder.
The state sued J&J for failure to warn consumers about the assumptions cancer risks associated with dust over a period of almost 50 years. The deal comes as the world's largest maker of health care products seeks to manage a growing number of consumer lawsuits accusing it of concealing product risks, after two failed attempts to use bankruptcy courts to impose a according to former users.
The decade-long litigation, along with the prospect of future cancer lawsuits, has slowed down J&J's share priceanalysts such as Chris Schott of JPMorgan Chase & Co. have noted in the past. Shares rose 0.3 percent in New York trading.
“Consistent with the plan we outlined last year, the company continues to pursue multiple paths to achieve a comprehensive and final resolution of the talc litigation,” Eric Haas, J&J's global vice president of litigation, said in an emailed statement. “We will continue to address claims from those who do not want to participate in our contemplated consensual bankruptcy resolution through litigation or settlement.”
Debbee Hancock, a spokeswoman for Mississippi Attorney General Lynn Fitch, did not immediately respond to calls Thursday seeking comment on the settlement.
Requested fines
As part of its case, Mississippi asked a judge to order J&J to put a warning on baby powder sold in the state and force the company to pay up to $10,000 for each violation of state consumer protection laws linked to years of sales.
The pact follows J&J's agreement in January to pay $700 million to resolve an investigation by 42 U.S. states into allegations the company mismarketed its baby powder by failing to warn about possible cancer risks.
The Mississippi deal was not covered by that agreement, sources said. Only this state and New Mexico have filed lawsuits against the company's marketing of baby powder.
J&J argues in court filings that its talc-based products do not cause cancer and has marketed its baby powder appropriately for more than a century. He also notes that federal regulators have not required him to put a cancer warning on the bottle. The company no longer manufactures or sells its talc-based baby powder. and replaces it worldwide with a version of cornstarch.
The New Brunswick, New Jersey-based company offered to settle all current and future baby powder claims for $9 billion in the bankruptcy filing of one of its units, but lawyers for former powder users have rejected that offer. J&J has promised that a unit will file a third bankruptcy case in hopes of facilitating future settlement talks.
J&J said in securities filings last month that now faces almost 60,000 lawsuits from former talcum powder users who blame the dust for their cancers. The company has settled a recent series of cases ready for trial, but still faces some state court juries later this year.
