J&J Slumps on $4.7 Billion Award to Cancer Patients

Ebony Scott
July 14, 2018

Johnson & Johnson has been ordered to pay $4.7 billion to 22 women who claimed the company's baby powder caused ovarian cancer.

The verdict capped a six-week-long trial focusing largely on whether J&J's talc contained asbestos and the company's conduct surrounding testing for the presence of the cancer-causing mineral. But the prosecution lawyer told the Missouri court that the FDA and Johnson & Johnson had used flawed testing methods.

The jury reached a unanimous verdict yesterday to award compensatory damages for 22 plaintiffs that averaged US$25 million apiece. However, this and a $72 million award in a separate case were both overturned on the basis of insufficient evidence and alleged jury misconduct in setting high damages.

The pharmaceutical giant plans to appeal.

The shares of the New Brunswick, New Jersey-based company dropped 1.4 per cent in late trading after closing at USUS$127.76 in NY. Lead counsel for the plaintiffs, Mark Lanier said in a statement that J&J had covered up evidence of asbestos in its products for more than 40 years.

Although J&J faces the greatest legal exposure, it's not the only company to be targeted in talc powder litigation. Given the size of the award and that it came out of the first trial test of claims of an asbestos-ovarian cancer link, investors are likely to increase their focus on the talc cases on the heels of the large award for the plaintiffs, according to Credit Suisse analyst Vamil Divan, who has an "outperform" rating on the company's shares.

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The plaintiffs argued that Johnson & Johnson's talcum powder products, like baby powder, caused them to develop ovarian cancer. Another mesothelioma case in late May ended in a mistrial. Five plaintiffs were from Missouri, with others from states that include Arizona, New York, North Dakota, California, Georgia, the Carolinas and Texas.

The lawyer for the 22 women in this most recent case said in a statement following the ruling that Johnson & Johnson should pull its product "before causing further anguish, harm, and death from a bad disease". Six of the women have died, so their families pressed wrongful-death claims against J&J.

The punitive part of the St. Louis verdict may be particularly vulnerable to post-trial challenges or appeals.

After a brief punitive phase Thursday afternoon, jurors deliberated for about 30 minutes before handing down their $4.14 billion punitive award.

It's the largest ever verdict again Johnson & Johnson. Plus, many appeals courts cut back punitive damages awards on appeal. Most of the 22 plaintiffs were not Missouri residents, and he said they should not have been allowed to sue New Jersey-based Johnson & Johnson in St. Louis under a recent U.S. Supreme Court decision that severely restricted state courts' jurisdiction over injury lawsuits brought by non-residents against out-of-state companies.

Other reports by GizPress

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