Thousands of women have filed suit against Johnson & Johnson, claiming the company’s talcum powders, a household staple for more than a century, can cause devastating cases of ovarian cancer. In lawsuit after lawsuit, patients accuse one of the world’s largest companies of ignoring decades of medical evidence and failing to warn the public of baby powder’s potential risks.
Are Major Talcum Powder Settlements Coming?
When patients began filing these lawsuits, it was far from certain that their arguments and evidence could win the day in court. Today, the legal landscape is different. Three talcum powder jury trials have now come to a close, and in each case, juries sided with patients, finding Johnson & Johnson liable for failure to warn. The company has already been ordered to pay $127 million to the women who filed these successful lawsuits.
With three liability victories in the books, legal experts have begun asking a new question: are talcum powder lawsuit settlements on the way?
There’s no way to answer that question now, although three jury defeats have certainly put Johnson & Johnson’s defense attorneys on notice. The cost of litigating over 1,200 baby powder lawsuits will certainly be high, even for a company with nearly $45 billion in annual gross income. Like any Defendant in a massive product liability litigation, Johnson & Johnson will have to make a strategic decision. Obviously, we’re not in a position to speculate on what that decision will be.
Multi-District Litigation Hasn’t Been Established Yet
It’s important to note that the baby powder lawsuits haven’t yet been consolidated in a Multi-District Litigation. In brief, a Multi-District Litigation, or MDL, is one way the court system has to handle a high volume of similar lawsuits that get filed in different federal courts. Instead of allowing thousands of claims to proceed in isolation, a panel of federal judges can send them to a single court. There, the lawsuits will go through pre-trial proceedings (which includes discovery, the evidence-gathering process) together.
Settlements are often reached at this stage. In fact, settlement offers usually carry the day in Multi-District Litigations. Between 60% and 90% of personal injury lawsuits reach a settlement in the court to which they are transferred, according to law researchers at Cornell University. Settlement is the norm, not an exception, in Multi-District Litigation.
Since a settlement can be offered at any point during litigation, some MDL proceedings are ended before any of the consolidated lawsuits reach a courtroom. If that doesn’t happen, it’s probably because the parties have some insurmountable disagreement – or both see their own position on the issue as superior to the other side’s. That’s what juries are for.
Bellwether Trials Often Spur Legal Settlements
After going through discovery, MDL judges will often schedule what we call “bellwether trials” to bring some clarity to the situation.
Bellwether trials are like test cases. Several of the consolidated lawsuits will be selected and go to trial first. This is a way of allowing both sides in the dispute to evaluate their prospects going forward. Obviously, if a Defendant wins every bellwether trial, they probably won’t be that likely to offer other Plaintiffs a settlement. But if Plaintiffs are victorious, those wins could be a sign that a Defendant should cut their losses, abandon their defense arguments and settle the rest of the claims.
One of Multi-District Litigation’s greatest strengths, at least from the court system’s point of view, is that negotiating a global settlement becomes possible. By bringing every case before a single judge, MDL allows a select number of Defendants to settle hundreds or thousands of lawsuits at the same time.
State Courts Complicate The Picture
On a federal level, none of this has happened yet. That’s probably because many of the talcum powder lawsuits, including the three that have reached jury verdicts, were filed in state, not federal, court. But on a more local level, state court systems have begun consolidated baby powder lawsuits.
In late 2015, the Supreme Court of New Jersey decided to consolidate more than 100 talcum powder lawsuits in a Multi-County Litigation. That’s a mechanism, similar to Multi-District Litigation, used to make state court proceedings more efficient. The cases were transferred to a court in Atlantic City, where they are currently pending.
Of course, someone has to ask a court system to consolidate similar lawsuits. Usually, that’s the corporate Defendant. In New Jersey, Johnson & Johnson asked for the state’s baby powder cases to be gathered together, and that request was granted.
The company is headquartered in New Jersey and currently employs 13,500 people there, according to Investopedia. That makes Johnson and Johnson the state’s seventh-largest employer, a huge asset, and may go some way in explaining why the company decided to request consolidation there, but not in other jurisdictions.
What Would A Settlement Look Like?
That’s a case-by-case decision, the result of negotiations between a Defendant and Plaintiffs’ attorneys.
Theoretically, a company can negotiate with each Plaintiff individually to reach a settlement amount. That’s the norm for cases that haven’t been consolidated in a single court. But when Multi-District Litigation takes effect, it’s more common for a Defendant to offer a global settlement, one to which each of the Plaintiffs can, in principle, agree.
For many MDLs, this involves setting up a trust fund that Plaintiffs can receive benefits from. The claims process is usually structured so that awards are proportional to damages: people who were hurt more seriously, or underwent more treatments, will be eligible to receive more money.
One important thing to note is that the total settlement amount is set in most cases; it doesn’t change. If 599 Plaintiffs deplete the fund with their own claims, the 600th Plaintiff won’t receive any compensation, no matter how severe their injuries. So every individual’s level of compensation usually depends on how much every other Plaintiff received.
No one has to accept a settlement, though, although many companies make a certain level of acceptance mandatory. For example, when Bayer agreed to set aside a $57 million fund to settle claims over the birth control pills Yasmin and Yaz, the company said it would only pay out if 97.5% of the Plaintiffs decided to opt-in to the settlement. That’s a strong incentive for patients to settle, since declining the offer could deprive thousands of other people of the compensation they’re pursuing. In a simpler scheme, some Defendants make it a requirement that all Plaintiffs, both current and future, participate in the settlement process.