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As Talc Lawsuits Rise, J&J Supplier Seeks Bankruptcy

Following a multi-billion verdict in a talc case, a key supplier for Johnson & Johnson's baby powder filed for bankruptcy.

Imerys Talc America said it could not afford to defend itself from nearly 15,000 lawsuits over its talc mineral product. Last year, a jury awarded $4.69 billion to 22 women who said talc baby powder caused ovarian cancer.

In the talc litigation, it was a bellwether case for future cases. For the talc company, it was the beginning of the end.

Cancer or Mesothelioma

The company filed bankruptcy to end nearly a decade of lawsuits. The plaintiffs have alleged generally that talc causes cancer or mesothelioma.

Under Chapter 11, the company can set up a trust to deal with current and future cases. Bloomberg says it could "pressure plaintiffs to accept lower settlements."

"After carefully evaluating all possible options, we determined pursuing Chapter 11 protection is the best course of action to address our historic talc-related liabilities and position the companies for continued growth," said Giorgio La Motta, president of Imerys Talc America.

A St. Louis jury handed Johnson & Johnson its biggest loss last July, adding to five previous talc verdicts against the company for hundreds of millions of dollars. Most of the record award was for punitive damages.

"Denying the Obvious"

In consolidated litigation, plaintiffs have cited a 1997 memo from a Johnson & Johnson medical consultant. It says "anybody who denies" the risk of using hygienic talc and ovarian cancer is "denying the obvious in the face of all evidence to the contrary."

The evidence has fueled large punitive awards. In the $4.69 billion case, the jury awarded $550 million in compensatory damages and $4.14 billion in punitives.

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