Hat tip to Charles P. Pierce at Esquire for pointing to a New Yorker article by Casey Cep:
The company has spent billions on cases about one of its most popular products. As its executives try a brazen new legal strategy to stop the litigation, corporate America takes note.
If you are wondering why a map of mineral deposits is at the top of this post, it’s because
talc is one of the minerals
Johnson & Johnson used for decades in their body powder and baby powder.
Talc has many uses (see the link) including cosmetics, paper making, lubricants, ceramics — many things — and of course on the human body to prevent chafing, for dryness, etc. But talc also has a problem for human use; it may be contaminated with
asbestos which is a carcinogen. Cep has this to say on
why talc is a problem for Johnson & Johnson.
Almost every American, from nursery to deathbed, uses Johnson & Johnson products: baby shampoo, Band-Aids, Neosporin, Rogaine, and O.B. tampons; Tylenol, Imodium, Motrin, and Zyrtec; Listerine mouthwash and Nicorette gum; Aveeno lotion and Neutrogena cleanser; catheters and stents for the heart; balloons for dilating the ear, nose, and throat; hemostats and staples; ankle, hip, shoulder, and knee replacements; breast implants; Acuvue contact lenses. But what few of those consumers grasped until a series of baby-powder cases began to go to trial was that, for decades, the company had known that its powders could contain asbestos, among the world’s deadliest carcinogens.
emphasis added
Cep begins with the story of Deane Berg, who goes to the doctor over what looked like a minor health issue, and ended up getting surgery and chemotherapy for what turned out to be ovarian cancer. While recovering from an excruciating treatment, she began to dig into what might have caused it — and the trail led to a product she’d been using for years: talcum powder from Johnson & Johnson.
From there Cep gets into the history of Johnson & Johnson, reporting that the founder, Robert Wood Johnson* in the post Civil War era found ways to build the brand partly on the reputation of others, such as putting a Red Cross on its products to rip off the reputation of Clara Barton’s organization. (They even tried to sue the nonprofit for trademark infringement. More on the history of Johnson & Johnson here.)
* Yes — the Robert Wood Johnson Foundation you hear about when PBS thanks sponsors.
To cut to the chase, J&J (Johnson & Johnson) knew for years that they had asbestos as a contaminant in the talc they were using in their powder products (the two minerals are often found together) and as early as 1969 company scientists were warning that this could be a problem — with legal exposure. (Cep describes some of the medical experiments J&J carried out on prisoners that sound chilling.)
As the asbestos carcinogen problem began to gather attention as a serious health risk, J&J engaged in what are standard corporate strategies: working the refs (government regulators) and spreading confusion. Supreme Court Justice Brett Kavanaugh’s father turns up here.
...whereby an industry successfully resists oversight by interfering with the most basic terms of regulation, from definitions to measurements to methodologies. By way of illustration, he [epidemiologist David Michaels] points to a powerful voice in the cosmetics industry: a trade group once called the Cosmetic, Toiletry, and Fragrance Association, and now known as the Personal Care Products Council.
The C.T.F.A. demonstrated its clout in the seventies, when advocacy groups, among them the Center for Science in the Public Interest and the Environmental Defense Fund, began urging the F.D.A. to regulate asbestos in cosmetics. In 1973, the agency proposed a rule that would require talc to be “at least 99.9 percent free of amphibole types of asbestos fibers and at least 99.99 percent free of chrysotile asbestos fibers.” The C.T.F.A. had just hired a young lobbyist, E. Edward Kavanaugh, the father of the Supreme Court Justice Brett Kavanaugh, who would go on to run the organization for twenty years; according to 990 forms that the C.T.F.A. submitted to the I.R.S., he eventually earned an annual salary package of four and a half million dollars.
Why is it not surprising that the the lifestyle that young Brett Kavanaugh enjoyed was based on blood money?
The industry strategy paid off:
By 1976, the F.D.A. had all but given up regulating asbestos in talc, in part because Johnson & Johnson, which had the lion’s share of the powder market, had encouraged the C.T.F.A. to preëmpt government regulation with self-regulation. The group approved an industry-wide, voluntary standard that cosmetic talc should contain “no detectable fibrous, asbestos minerals.” Then the members chose their own detection method—one that didn’t test for chrysotile asbestos and could only show levels of amphibole asbestos when they were five times higher than what the F.D.A. had originally proposed. The epidemiologist David Egilman, who has studied asbestos and testified as a witness on behalf of plaintiffs in talc lawsuits, compared this to companies placing needles on a bathroom scale and then denying that those needles existed because they didn’t weigh enough to register. (A lawsuit brought against P.C.P.C. alleging negligence and conspiracy was dismissed by a New Jersey judge last year.)
Cep has more on the failure of regulators to cope with the industry, including one of those revolving door stories where the regulator becomes a highly-paid agent for the regulated. What happened to Berg’s lawsuit against J&J is infuriating.
Where things begin to become a problem for J&J is that they started getting hit with more and more liability lawsuits over ovarian cancer caused by using J&J’s talc-based powder. While J&J usually won, the cases where juries awarded damages were often very costly — which brings us to where we are today. I’ll let Charlie Pierce frame this:
In last week’s New Yorker, Casey Cep went long on the situation, concentrating specifically on J&J’s strategy for ducking any further financial penalties, which is just about as skeevy as one might expect from an American corporation in 2022. Cep:
Deploying a legal maneuver first used by Koch Industries, Johnson & Johnson, a company valued at nearly half a trillion dollars, with a credit rating higher than that of the United States government, declared bankruptcy. Because of that move, the fate of forty thousand current lawsuits and the possibility of future claims by cancer victims or their survivors now rests with a single bankruptcy judge in the company’s home state, New Jersey. If Johnson & Johnson prevails and, as Berg puts it, “weasels its way out of everything,” the case could usher in a new era in which the government has diminished power to enforce consumer-protection laws, citizens don’t get to make their case before a jury of their peers when those laws fail, and even corporations with long histories of documented harm will get to decide how much, if anything, they owe their victims.
First of all, adopting any litigation strategy pioneered by the Koch empire marks you, prima facie, as lousy to any thinking person with an ounce of empathy in their withered soul. Second, as much money as the lawsuits have cost J&J to this point, this strategy is being devised to pre-empt legal remedies before victims can seek them out. The jury verdict is still the most effective corporate regulator left to the average American because, god knows, the government entities ostensibly tasked with the job have been starved to the bone.
...The rest of the piece is a sadly familiar accounting of the steady move toward legalized influence-peddling that has been the hallmark of the government's regulatory powers for the past four decades…
...Now, Johnson and Johnson—which is, as Cep points out, is a half-trillion-dollar company—is going to argue in court that it is broke as hell, and everybody will pretend that this makes all the sense in the world.
emphasis added
So, all of those lawsuits will end up having to thread the needle of a single bankruptcy court action in New Jersey, and corporate accountability becomes even more of a theoretical concept.
This isn't quite as egregious as the tale of the man on trial for murdering his parents begging for mercy because he’s an orphan, but it’s close. We’re told market forces can solve any problem far more effectively than government regulation or lawsuits. So, what does the market think?
Johnson & Johnson stock outperforms market despite losses on the day
Published: Sept. 13, 2022 at 4:32 p.m. ET
It’s also not just ovarian cancer that is causing difficulties for J&J when it comes to women’s health care:
Settlement of two Australian class actions is largest in country’s history and subject to federal court approval
Pelvic mesh implant manufacturer Johnson & Johnson group has reached a $300m settlement in two class actions, after thousands of women worldwide reported complications from the mesh products including chronic pain, painful sexual intercourse and incontinence.
It marks the largest settlement in a product liability class action in Australian history, and is subject to federal court approval.
...Shine Lawyers led the Australian class actions and alleged Johnson & Johnson failed to properly test the devices and played down their risk to both surgeons and patients. Women have suffered complications including mesh exposure and erosion – when the mesh pokes through the vaginal wall or cuts through internal tissue – vaginal scarring, fistula formation, painful sex, and pelvic, back and leg pains. Some of these complications may occur years after surgery and can be difficult to treat.
Johnson & Johnson is a huge corporation with many products, most of which do what they are supposed to do without problems. Why there is a problem with talc, and mesh implants, and who knows what else is not hard to understand.
It was easier and less costly for J&J to work the system than it was for them to do due diligence and stop making products when they became aware they were causing problems. It would have been better if they didn’t allow potential profits to override making sure those products were safe before putting them on the market.
It would have been far better for everyone — including J&J — if they had faced the kind of regulatory oversight that would have made the company afraid to pursue profit at the expense of its customers if they knew they would be quickly held to account.
It also would be far better for everyone if J&J wasn't such a huge corporation with so much money as to make it almost impossible to hold to account, or with so much distance between the top executives and the people who actually develop products and bring them to market. The problems with baby formula show what happens when markets are dominated by players that are too few and too big.
What Johnson & Johnson is doing in court to reduce the damages they are liable for is shameful — and also just the way things work for corporations with the resources to pull it off.
As long as we permit it.