A lawyer who is trying to broker a settlement in Johnson & Johnson’s baby powder cancer lawsuits proposed that it can resolve the decade-long litigation and any future cases for $19 billion — $10 billion more than the company offered in two failed trips through bankruptcy court.
James Conlan-bsp-person>, a former law firm partner who used to defend J&J against baby powder suits, now runs a business aimed at helping corporations corral liability in mass personal injury litigation.
He floated his proposal to J&J’s board in November, according to a court filing unsealed this week. But J&J rejected it and insisted a third Chapter 11 filing by one of its units is the best way forward, even though courts previously ruled-bsp-bb-link> the world’s largest maker of health-care products wasn’t in enough financial distress to use that process.
But Conlan’s proposal – backed by leaders of law firms suing J&J over claims that the talcum in its baby powder contained cancerous asbestos – is the first time plaintiffs have said publicly how much J&J should pay to resolve more than 50,000 cases that have created an overhang on the company’s stock price.
Clare Boyle, a J&J spokeswoman, said in a statement that an “improper and unethical collaboration” between Conlan and a plaintiffs’ lawyer “was designed to thwart a reasonable and appropriate resolution of the talc litigation.”
J&J contends its talc-based products don’t cause cancer and it has marketed its baby powder appropriately for more than 100 years. Still, the New Brunswick, New Jersey-based company has been moving since 2020 to replace talcum powder in its products with cornstarch.
Elizabeth Burch, a University of Georgia professor who specializes in product-liability law, said a $19 billion settlement could mean an average of more than $200,000 for each talc claimant. “Whether it’s attractive to plaintiffs depends on details like who qualifies and how heavy-handed the settlement tactics are,” Burch said in an emailed statement.
Conlan, a former defense lawyer with Faegre Drinker Biddle & Reath, said in his November proposal to J&J’s board that his Legacy Liability Solutions company would buy J&J units funded to deal with the talc cases and Legacy would then decide how to divide the money among claimants.
The settlement would mirror those adopted by other companies in which claimants would receive payments based on the severity of their injuries, Conlan said in the letter. He said working with his company would allow J&J to avoid another bankruptcy filing – which likely wouldn’t survive another court challenge – and offers a “more certain” and faster way of resolving the cases.
In its court filings, J&J said it had no interest in using Conlan’s firm as a settlement vehicle because it believed “the bankruptcy process offers the fairest, most efficient resolution.” A J&J in-house lawyer has said he still hopes to use a third bankruptcy-bsp-bb-link> as a platform for a broad settlement. The company announced this week it has settled some talc-cancer cases in hopes of removing objections-bsp-bb-link> to another trip though Chapter 11.
The company is asking the New Jersey federal judge overseeing most of the lawsuits to remove Alabama-based consumer lawyer
The company also said the pair were motivated by financial gain. Under a settlement of that size, Birchfield’s law firm would claim the lion’s share of legal fees potentially worth more than $2 billion, J&J said.
Birchfield said J&J’s effort to knock his firm out of its role is just another attempt by the company to bully opponents and ratchet down settlements. He has opposed J&J’s $8.9 billion offer as insufficient. He also said he got no confidential information from Conlan and their relationship doesn’t raise ethical issues.
The consolidated case is In Re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, 16-md-2738, US District Court, District of New Jersey (Trenton).
–With assistance from Steve Stroth-bsp-person>.
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