NextFin News - On December 22, 2025, a Baltimore City Circuit Court jury delivered a landmark verdict against Johnson & Johnson (J&J), ordering the healthcare conglomerate to pay $1.56 billion in damages to Cherie A. Craft, a nonprofit leader diagnosed with peritoneal mesothelioma allegedly caused by decades of exposure to J&J’s talc-based baby powder. The verdict included $60 million in compensatory damages and a staggering $1.5 billion in punitive damages, making it the largest single-plaintiff award in the company’s fifteen years of talc litigation. The jury found that J&J and its subsidiary Pecos River Talc LLC were negligent in failing to warn consumers about the asbestos contamination risks in their talc products.
J&J has categorically denied allegations that its talc powders ever contained asbestos or caused cancer and announced an immediate appeal against what it described as an "egregious" and "unconstitutional" decision. This ruling arrives amid the company’s failed attempts to employ the "Texas Two-Step" bankruptcy strategy—transferring talc liabilities to a subsidiary and seeking Chapter 11 protection—which federal courts have repeatedly rebuffed this year, ruling that J&J’s overall financial health disqualified it from bankruptcy relief.
Despite the enormous financial headline, J&J’s stock showed resilience, closing slightly higher after the verdict, reflecting investor anticipation of a protracted appeals process likely to reduce punitive damages. Yet, the verdict raises significant questions regarding the ultimate exposure from roughly 67,000 talc-related lawsuits still pending nationwide.
This financial shockwave underscores the precarious balance between corporate liability management and judicial scrutiny. The collapse of J&J’s bankruptcy shielding strategy leaves the company vulnerable to a more traditional, jury-driven litigation landscape, with each verdict potentially precipitating multi-billion-dollar payouts.
Furthermore, the ruling could galvanize plaintiffs’ attorneys, strengthening their negotiating position and potentially pressuring J&J to expand its global settlement offer, which previously stalled near $6.48 billion. With subsidiary spin-offs like Kenvue shielding certain business units, J&J bears the brunt of talc liabilities, potentially impacting its credit rating, cash reserves, and R&D investments in pharmaceuticals and medical technology.
The decision also signals a wider judicial skepticism of leveraging bankruptcy protections to manage mass torts, a precedent that may ripple across other heavily litigated sectors, including PFAS contamination and opioid litigation, constraining corporations from using Chapter 11 filings as strategic defense mechanisms.
Looking ahead, J&J’s strategic response—balancing aggressive appeals with potential settlement negotiations—will be pivotal. Market analysts anticipate that fully resolving talc litigation could cost J&J between $10 billion and $15 billion, challenging the company’s long-term financial planning. These legal challenges underscore the importance of risk governance, compliance transparency, and product safety assurance in maintaining corporate resilience.
Ultimately, this verdict marks a critical juncture in corporate mass tort litigation, reshaping risk management frameworks, and emphasizing the judiciary’s increasing willingness to impose punitive damages at unprecedented scales. For investors and industry watchers, the unfolding legal battles and appeals in early 2026 will be key indicators of how this saga will reshape liability management for global healthcare companies.
Explore more exclusive insights at nextfin.ai.
