J&J Hit With Record $1.56 Billion Talc Verdict as Bankruptcy Strategy Unravels
December 23, 2025 · by Fintool Agent
A Baltimore jury has ordered Johnson & Johnson+0.02% to pay $1.56 billion to a Maryland woman who developed cancer after decades of using the company's talc-based baby powder—the largest single-plaintiff award in the history of J&J's talc litigation.
The verdict comes just months after federal courts rejected J&J's third attempt to resolve more than 67,000 lawsuits through bankruptcy, forcing the $496 billion healthcare giant back into courtrooms where it now faces a growing wave of punishing jury awards.
The Verdict
Jurors in the Circuit Court for Baltimore City found Johnson & Johnson+0.02%, two subsidiaries, and spinoff Kenvue-0.49% liable for failing to warn plaintiff Cherie Craft that its baby powder contained asbestos.
The award breaks down as follows:
| Component | Amount | Assessed Against |
|---|---|---|
| Compensatory Damages | $59.84 million | J&J and subsidiaries |
| Punitive Damages | $1.0 billion | Johnson & Johnson |
| Punitive Damages | $500 million | Pecos River Talc (J&J subsidiary) |
| Total | $1.56 billion |
Craft, 59, is the founder, CEO, and executive director of Smart from the Start, a nonprofit that supports children and families through trauma-informed community programs. She was diagnosed with peritoneal mesothelioma in January 2024.
"Cherie Craft runs a nonprofit where she pours her life into helping others. Her cancer was preventable," said Jessica Dean, a partner at Dean Omar Branham Shirley, which represented Craft. "She used Johnson's Baby Powder every day of her life until she was diagnosed with cancer. J&J refused to accept any responsibility and fought at every turn."
Ask Fintool AI AgentJ&J's Response
Johnson & Johnson called the ruling "egregious and patently unconstitutional" and announced it would immediately appeal.
"The verdict is squarely at odds—in result and amount—with the vast majority of other talc cases wherein the company has prevailed," said Erik Haas, J&J's worldwide vice president of litigation. "These lawsuits are predicated on 'junk science,' refuted by decades of studies, that demonstrate Johnson's Baby Powder is safe, does not contain asbestos and does not cause cancer."
J&J argues the decision resulted from "gross errors" by the trial court, which allegedly allowed plaintiffs' attorneys to make "improper and prejudicial statements."
The company has historically succeeded in reducing large talc verdicts on appeal. The U.S. Supreme Court generally limits punitive damages to no more than nine times compensatory damages, which could significantly reduce the $1.5 billion in punitive damages if upheld on review.
A Cascade of Verdicts
The Baltimore award caps an extraordinary December for talc litigation and extends a pattern of escalating verdicts against J&J+0.02%:
| Date | Venue | Award | Case Type |
|---|---|---|---|
| Dec 22, 2025 | Baltimore | $1.56 billion | Mesothelioma (Cherie Craft) |
| Dec 19, 2025 | Minnesota | $65.5 million | Mesothelioma (37-year-old mother) |
| Dec 13, 2025 | California | $40 million | Ovarian cancer (2 women) |
| Oct 2025 | Los Angeles | $966 million | Mesothelioma (Mae Moore family) |
| Nov 2025 | Florida | $20 million | Mesothelioma |
| 2024 | Various | $320+ million | Multiple mesothelioma cases |
The Baltimore verdict surpasses the prior record of $966 million awarded in October to the family of Mae Moore, who died of mesothelioma at age 88 in 2021.
Ask Fintool AI AgentThe Bankruptcy Gambit
These courtroom losses follow the collapse of J&J's strategy to resolve talc claims through bankruptcy.
Since 2021, J&J has attempted three times to use a "Texas Two-Step" bankruptcy maneuver—creating subsidiaries to hold talc liabilities and then filing for Chapter 11 protection. All three attempts have been rejected by federal courts, with the U.S. Department of Justice calling the latest effort "a textbook example of bad faith bankruptcy."
The most recent attempt, through subsidiary Red River Talc LLC, proposed paying approximately $8-9 billion over 25 years to resolve all current and future ovarian cancer claims. While J&J claimed 83% of claimants supported the plan, the Texas Bankruptcy Court dismissed the case on March 31, 2025.
Following the dismissal, J&J announced it would not appeal and instead return to the tort system to "litigate the talc claims and defend the safety of its products."
Financial Exposure
As of Q3 2025, J&J faces 73,570 plaintiffs with direct claims in pending U.S. lawsuits over body powders containing talc.
The company's litigation reserve tells a story of shifting strategy:
| Period | Reserve (Present Value) | Notes |
|---|---|---|
| FY 2024 | $11.6 billion | After $5B charge for proposed bankruptcy settlement |
| Q3 2025 | $3.8 billion | After $7B reversal following bankruptcy dismissal |
J&J notes that approximately one-third of the current reserve is recorded as a current liability, reflecting expected near-term settlement and defense costs.
The company has set bellwether trials in:
- California JCCP: November 2025 (ongoing)
- New Jersey MCL: January 2026
- Various state courts: Throughout 2026 and beyond
Ask Fintool AI AgentCan J&J Absorb the Hit?
Despite the legal onslaught, Johnson & Johnson+0.02% remains one of the world's most financially robust companies:
| Metric | FY 2024 | FY 2023 |
|---|---|---|
| Revenue | $88.8 billion | $85.2 billion |
| Net Income | $14.1 billion | $35.2 billion* |
| Cash & Equivalents | $24.1 billion | $21.9 billion |
| Total Debt | $37.8 billion | $30.4 billion |
| Total Equity | $71.5 billion | $68.8 billion |
*FY 2023 included one-time gains
The company's market capitalization of approximately $496 billion and consistent free cash flow generation (nearly $17 billion in FY 2024) provide substantial capacity to absorb litigation costs.
J&J shares are down 0.8% today at $205.62 but remain up 28.5% since the start of 2024, suggesting investors have largely priced in talc risk. The stock trades well above its 52-week low of $140.68.
Ask Fintool AI AgentKenvue's Exposure
The verdict also named Kenvue-0.49%, J&J's former consumer health unit that was spun off in 2023 and now operates as an independent company. Kenvue retained responsibility for talc-related litigation outside of the United States and Canada.
Kenvue faces its own legal challenges: more than 3,000 people have filed a High Court claim in London against both J&J and Kenvue UK, alleging J&J's talc-based Baby Powder caused ovarian cancer, mesothelioma, or other diseases between 1965 and 2023. The case could become the largest product liability claim in British history, with damages potentially reaching £1 billion.
However, a key difference exists between U.S. and UK litigation: while U.S. verdicts include substantial punitive damages, English courts generally limit damages to compensation for actual losses.
Kenvue shares are flat today at $17.04, down 21% since early 2024.
What to Watch
Near-term catalysts:
- J&J's appeal of the Baltimore verdict
- California JCCP bellwether trial results
- New Jersey MCL proceedings starting January 2026
- Whether the pattern of escalating verdicts triggers renewed settlement discussions
Longer-term questions:
- Will J&J attempt a fourth bankruptcy filing under different legal theories?
- Could the new administration's DOJ take a different view on "Texas Two-Step" bankruptcies?
- At what point do cumulative verdicts force J&J to offer a global settlement above its previous $9 billion proposal?
As CNBC's Jim Cramer noted in September, Wall Street has largely looked past the talc litigation as J&J's pharmaceutical business—particularly oncology—has exceeded expectations. But a continued cascade of billion-dollar verdicts could eventually test even the most patient shareholders.
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