Johnson & Johnson

Johnson & Johnson's Baby Powder was one of the most trusted consumer products in American history. The company's own Credo, written by Robert Wood Johnson II in 1943, states that J&J's first responsibility is to "the doctors, nurses and patients, to mothers and fathers and all others who use our products." Internal documents established in litigation tell a different story. Documents revealed in court proceedings show J&J had known about asbestos contamination in its talc since at least 1971 — and spent decades finding ways to conceal the evidence from the public. Women who used Baby Powder daily as a feminine hygiene product were at elevated risk of ovarian cancer. The product was not reformulated for the U.S. market until 2020, when J&J announced it would discontinue talc-based Baby Powder in the United States and Canada — citing "misinformation" and "unfounded media reports" rather than acknowledging any health risk. The company continued selling talc-based Baby Powder internationally. The litigation record documents the scale of the concealment. Jury verdicts against J&J include: $72 million to Jacqueline Fox's family (2016, later overturned on jurisdictional grounds); $417 million in California (2017, $70M compensatory + $347M punitive); $4.7 billion to 22 women in St. Louis (2018). As lawsuits exceeded 40,000, J&J offered a $9 billion settlement (2023). A federal court rejected a $10 billion settlement proposal in February 2025. As of 2026, more than 62,000 lawsuits remain pending. A Reuters investigation published in December 2018 documented internal J&J company tests that repeatedly found asbestos in its talc from the 1970s through the early 2000s. J&J disputed the report. The company had told the FDA, Congress, and the public for decades that its talc was safe and asbestos-free.

• —Internal documents show J&J knew asbestos was present in its talc since at least 1971.
• —Baby Powder marketed as safe and gentle for decades while concealment continued.
• —Reuters (December 2018): internal company tests found asbestos in talc from the 1970s through early 2000s.
• —2016: $72M verdict to Jacqueline Fox family (later overturned on jurisdictional grounds).
• —2017: $417M California verdict ($70M compensatory + $347M punitive).
• —2018: $4.7B St. Louis jury award to 22 women.
• —2020: J&J discontinued talc Baby Powder in U.S./Canada — cited 'misinformation,' denied any health risk.
• —2023: J&J offered $9B settlement as lawsuits exceeded 40,000.
• —February 2025: Federal court rejected $10B settlement proposal.
• —As of 2026: 62,000+ lawsuits pending.
• —No criminal charges filed against J&J or any executive.

Risperdal (risperidone) is an antipsychotic approved by the FDA for specific uses in adults. J&J's subsidiary Janssen Pharmaceuticals marketed it for uses the FDA had not approved: behavioral and psychological symptoms of dementia in elderly patients, and various conditions in children. Both populations faced documented safety risks — increased mortality risk in elderly dementia patients; gynecomastia (pathological breast tissue growth) in boys who took the drug. In November 2013, the Department of Justice announced that Johnson & Johnson would pay more than $2.2 billion to resolve criminal and civil allegations arising from the promotion of Risperdal and two other drugs. The criminal component included a guilty plea by Janssen Pharmaceuticals and $485 million in criminal fines and forfeiture. The civil component totaled approximately $1.72 billion in False Claims Act settlements. The DOJ found that Janssen paid kickbacks to physicians and to nursing home pharmacies that dispensed the drug — embedding financial incentives into the prescribing chain for a vulnerable population. Alec Gorsky, who was vice president of sales and marketing for Janssen during the period of Risperdal's off-label promotion, became CEO of Johnson & Johnson in 2012 — one year before the $2.2 billion settlement. He served as CEO until 2022. On the opioid front, J&J's Janssen subsidiary manufactured Duragesic (a fentanyl patch) and other opioid products. In January 2022, J&J agreed to pay $5 billion as part of a landmark $26 billion multi-company settlement with McKesson, AmerisourceBergen, and Cardinal Health to resolve opioid crisis claims by states and localities across the United States. No executives were criminally charged in connection with either Risperdal or the opioid settlement.

• —DOJ settlement (November 4, 2013): $2.2B total — $485M criminal fines/forfeiture (guilty plea by Janssen) + $1.72B civil False Claims Act settlements.
• —Off-label promotions: Risperdal marketed to dementia patients (increased mortality risk) and children (documented gynecomastia cases in boys).
• —Kickbacks paid to physicians and nursing home pharmacies to drive Risperdal prescriptions.
• —Prior state settlement (August 2012): $181M to 36 U.S. states over similar off-label promotion allegations.
• —Alec Gorsky: VP of Sales/Marketing at Janssen during Risperdal marketing period → became J&J CEO (2012–2022) → settled the case as CEO.
• —Opioid settlement (January 2022): $5B as part of $26B multi-company resolution covering states and localities.
• —Janssen manufactured Duragesic (fentanyl patch) and other opioid analgesics marketed during the epidemic.
• —Combined pharmaceutical enforcement: $7.2B across the two actions.
• —Zero executives criminally charged in either action.

The Texas Two-Step is a corporate bankruptcy maneuver in which a solvent company uses a state divisive merger statute to split into two entities — one holding assets, one holding liabilities — and files only the liability-holding entity into bankruptcy to resolve mass tort claims at a discounted rate. J&J pioneered its use at pharmaceutical scale. In October 2021, J&J restructured to create a subsidiary called LTL Management LLC. LTL received the talc-related liabilities. LTL then filed Chapter 11 bankruptcy in the Western District of North Carolina. The bankruptcy trust J&J proposed to fund was approximately $2 billion — against independent estimates that the company's real talc liability, tried to verdict at scale, could reach $25 billion or more. The Third Circuit Court of Appeals rejected the bankruptcy filing in January 2023, ruling that LTL — which was backstopped by J&J's assets — was not in genuine financial distress and therefore had no right to bankruptcy protection. J&J refiled a second bankruptcy petition in April 2023. A federal bankruptcy court dismissed the second filing as well. In May 2023, J&J announced a revised $8.9 billion settlement offer. A New Jersey federal court rejected a $10 billion proposal in February 2025, finding it procedurally deficient. The tactic delayed the trials of tens of thousands of cancer patients for years. Several plaintiffs died while waiting. As of 2026, more than 62,000 lawsuits remain pending. J&J is a profitable company with approximately $370 billion in market capitalization. The bankruptcy filings were not driven by financial necessity — they were tools of litigation strategy. Federal courts said so.

• —October 2021: J&J created LTL Management LLC via divisive merger; transferred all talc liabilities into the shell.
• —LTL filed Chapter 11 bankruptcy in Western District of North Carolina — J&J itself remained solvent.
• —Initial bankruptcy trust offered: ~$2B vs. estimated $25B+ in real plaintiff exposure.
• —January 2023: Third Circuit rejected filing — LTL not in genuine financial distress; dismissed.
• —April 2023: J&J refiled second bankruptcy. Federal court dismissed the second filing as well.
• —May 2023: J&J proposed $8.9B revised settlement offer.
• —February 2025: Federal court rejected $10B settlement proposal.
• —Plaintiffs who died awaiting trial include individuals whose cases were stayed during the bankruptcy proceedings.
• —62,000+ lawsuits remain pending as of 2026.
• —J&J market cap: ~$370B — bankruptcy was litigation strategy, not financial necessity.
• —No criminal liability for the obstruction maneuver.