Johnson & Johnson Drops 3.08% as Talc Settlement Rejected

On April 1, 2025, Johnson & Johnson's stock dropped 3.08% in pre-market trading, reflecting investor concerns over the company's legal challenges and strategic decisions.

Johnson & Johnson faced a significant setback as a U.S. bankruptcy judge rejected the company's $10 billion settlement proposal aimed at resolving tens of thousands of lawsuits alleging that its baby powder and other talc products cause ovarian cancer. This marks the third time the company's bankruptcy strategy has failed in court.

The judge, Christopher Lopez, ruled that Johnson & Johnson's settlement plan lacked sufficient support from the affected women and provided excessive legal immunity to entities not involved in the bankruptcy, including Johnson & Johnson's product distributors and its recently spun-off consumer health business, Kenvue. The judge's decision underscores the complexity and contentious nature of the legal battles surrounding Johnson & Johnson's talc products.

In response to the ruling, Johnson & Johnson stated that it would not appeal the decision but also refused to continue with the settlement process. The company plans to return to the tort system, aiming to overturn the allegations through litigation. Critics, including plaintiff attorney Andy Birchfield, have accused Johnson & Johnson of using bankruptcy as a means to evade responsibility for the health issues allegedly caused by its products.