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Johnson & Johnson Attempts To Side-Step
$100 Million Baby Powder Settlement

Kori Hale
forbes.com
Contributor

I’m the CEO of CultureBanx, redefining business news for minorities.
Pharmaceutical giant Johnson & Johnson JNJ -0.9% wants to claim bankruptcy to side-step anymore talcum claims, which was a primary ingredient in its popular baby powder. Right now the company is facing more than 38,000 cases that allege J&J talc products caused cancer, after agreeing to a $100 million settlement back in 2021. The bankruptcy setup claim is even more concerning for Black women, who 15 years ago, were selected by J&J as “the right place” to sell more baby powder to, specifically targeting  “under-developed geographical areas.”


The Breakdown You Need To Know:
J&J plans to dance a “Texas two-step” through its subsidiary, LTL Management, as part of a legal strategy that allows companies to separate liabilities from assets through a divisive merger, according to Reuters. CultureBanx noted the company had set aside $3.9 billion in a ‘trust fund’ for litigation expenses to cover payouts for trust lost from 25,000 consumers who purchased its Baby Powder.


An attorney for J&J told a New Jersey bankruptcy court judge that its plan to use a subsidiary to resolve talc claims against it is the best way to achieve an “equitable, efficient, and consensual resolution.” Lawyers representing cancer patients say that the bankruptcy case is meant to delay and frustrate lawsuits that would otherwise go to a jury trial against J&J directly.

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Baby Powder Targets:
Racial and ethic disparities in U.S. healthcare are rife, with Black women facing higher risks to their health from discrimination. In 2006, the company began distributing baby powder through a specially curated network of churches and beauty salons targeting Black & Hispanic communities. 


Moreover, J&J launched a $300,000 radio advertising campaign in six markets with the prime goal of reaching “curvy Southern women 18-49 skewing African American.” To add insult to injury,  an independent investigation discovered that the company knew for decades that asbestos was mixed in with the talcum. 


The lack of care for Black & Hispanic consumers is evident, fueling fears about the ethical standards of J&J’s health & safety protocols. In 2020 alone, J&J was ordered to pay $2.1 billion to a group of women who linked their ovarian cancer to J&J products; with six of the plaintiffs dying before the trial started and five more passing since 2018. 


Situational Awareness:
J&J maintains that its consumer talc products are safe, even though it stopped selling baby powder in the U.S. and Canada back in May 2020. If J&J reached comparable settlements in all of the 38,000 talc cases pending against it, the company would have about $5.5 billion in liability.
https://www.forbes.com/sites/financialfinesse/2022/05/31/are-you-concerned-about-investing-in-a-529-plan/?sh=126ad2a44c97

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