Article published on May 14th, 1991.

HEADLINE: SETTLEMENT REACHED IN TYLENOL SUIT

An out-of-court settlement was reached Monday between the manufacturer of Tylenol painkillers and the families of seven people in the Chicago area who died after taking cyanide-laced capsules in 1982.

The surprise settlement apparently is the last of the litigation stemming from the case. Because there was no trial, it was not determined whether Johnson & Johnson and its division, McNeil Consumer Products Co., which manufactures Tylenol, was negligent for failing to use tamper-resistant packaging.

The case, in which the victims unknowingly ingested Extra-Strength Tylenol capsules laced with fatal doses of potassium cyanide poison, led to federal regulations requiring the use of tamper-resistant packaging of consumer products ranging from medicines to salad dressing.

The seven deaths in Chicago were never solved, but publicity surrounding the incident led to hundreds of so-called copycat cases of product tampering elsewhere in the United States.

The exact terms, including dollar amounts of the settlement, were not released and will be sealed by a court order that Cook County Circuit Court Judge Warren Wolfson is expected to issue Wednesday, according to attorneys Leonard Ring and Philip Corboy, who represented the plaintiffs.

Corboy did say, however, that compensation will include a provision for the college educations of the eight children whose parents died in the poisonings.

Jeffrey Leebaw, a spokesman for Johnson & Johnson, said the company is pleased with the settlement.

''While there is no way that we could have anticipated a criminal tampering with our product or prevented it, we wanted to do something for these families and finally put this tragic event behind us,'' Leebaw said, adding that the company still denies any liability in the poisonings.

The lawyers for the plaintiffs had said they would attempt to show that product tampering was a well-known problem before the murders and that the manufacturer of Tylenol could have and should have taken steps before the murders to safeguard their product.

''We`re elated with the settlement,'' Corboy said. ''It takes two to tango, and they filled out our dance card.''

''Liability was the key,'' Ring said. ''And it was hotly contested. Johnson & Johnson said it was `some person out there` who caused the deaths. Our contention was that they should have foreseen it.''

One product liability expert speculated later Monday that lawyers for Johnson & Johnson and McNeil Consumer Products Co. decided the possible risks to the companies` reputations from an unfavorable verdict were greater than the dollar costs of a settlement.

The expert, Richard Epstein, law professor at the University of Chicago, said big corporations are reluctant to take risks. He also said the law is unclear on whether manufacturers are liable when someone else tampers with their products.

''There was no clear defense that they have to this kind of case,''

Epstein said. ''One jury might decide one way and another jury would decide the other way. . . . On the question of whether you should have designed a product to take into account the mad tamperer, it`s not clear that you`re going to win.''

Legal experts also say that settlements are less likely to attract widespread public attention than are jury verdicts.

Jury selection had been expected to begin Monday for a trial that lawyers said would have lasted four to six weeks and resulted in years of appeals. The settlement was reached after three days of negotiations.

According to the plaintiffs` attorneys, negotiations began between the two sides ''late Saturday night'' and continued through Sunday by telephone. By 1:30 p.m. Monday, all plaintiffs had accepted their settlements.

Although the killings were never solved, one man, James Lewis, now 44, was sentenced in 1984 to 10 years in prison for a million-dollar extortion plot connected to the Tylenol poisoning.

Lewis was once the prime suspect in the case, but he denied any connection. He was convicted of sending a letter to Johnson & Johnson shortly after the seven deaths, demanding $1 million ''to stop the killings.''

The case began on the morning of Sept. 29, 1982, when 12-year-old Mary Kellerman woke up with a cold and sore throat in her home in Elk Grove Village and took an Extra-Strength Tylenol capsule. Almost immediately afterward, she collapsed and soon died.

The other victims also took Tylenol that day. They were Adam Janus, 27, of Arlington Heights; his brother, Stanley Janus, 25, and Stanley Janus` wife, Theresa, 19; Mary Reiner, 27, of Winfield; Mary McFarland, 31, of Elmhurst;

and Paula Prince, 35, of Chicago`s Near North Side.

Two firefighters, Richard Keyworth of Elk Grove Village and Lt. Philip Cappitelli of Arlington Heights, first developed the theory that Tylenol capsules were responsible.

Eventually, the company recalled 8 million capsules.

A total of 75 capsules laced with cyanide were found in eight different bottles that had been tampered with. Two of the bottles were found as a result of Johnson & Johnson`s recall. The firm offered to repay people for Tylenol they threw away as a result of the murders.

The firm received wide praise for its quick response to the tragedy.

''The problem present when these people died is no longer a problem,''

Corboy said. ''Johnson & Johnson should be complimented for coming out with tamper-proof products within five weeks'' of the deaths.

However, a spokeswoman for the U.S. Food and Drug Administration, Fay Peterson, said the FDA`s position is that there is no such thing as a tamper- proof package. FDA regulations now require tamper-resistant packaging.