According to the latest news by Bloomberg, Johnson & Johnson’s shares dropped after a jury ordered the company to pay $4.69 billion to 22 women who had alleged that the company’s talcum products contained asbestos had given them ovarian cancer.
This verdict make this case the 6th largest defective product legal battle in American history. The award ordered by the jury is $4.14 billion in damages and another $550 million to be given out to the 22 women as well as their families as compensation.
The verdict was given by the jurors of the St. Louis city court and these asbestos cases came as a part of more than 9,000 claims that accused J&J’s talcum products of causing cancer.
After the news broke, J&J’s shares dropped by 0.7% to trade at $126.83 per share in morning trading in New York. This was despite the fact that there were no changes in the major market indices.
According to a Credit Suisse analyst, Vamil Divan, investors are going to focus more on these legal cases as they will be concerned about the long term impact of these large awards for the plaintiffs. Overall, though, Divan feels that J&J is strong enough to absorb relatively large payouts such as these to resolve these cases. Credit Suisse has given J&J and “outperform” rating.
J&J’s spokesperson, Carol Goodrich stated that the company was going to appeal this decision. She averred that the verdict was the result of a rather unfair process which had allowed 22 women to be represented in one case, most of whom did not even have a connection to Missouri.
Goodrich also stated that the fact that each of the plaintiffs was awarded about $25 million regardless of what their individual facts were, or what the differences in laws for each of the individual women’s cases, just goes to show that there was an overwhelming prejudice against this kind of proceeding.
The company spokesperson also asserted in her emailed statement that Johnson & Johnson’s products did not contain any asbestos and definitely did not cause ovarian cancer. She said she was confident that this verdict would be overturned. Goodrich said that there were too many errors in this trial, even worse than other cases that the company had fought, whose verdicts had been overturned.
Johnson & Johnson was not the only company that these group of 22 women sued. They also sued a business division of Imerys SA, the company that supplied the talc to J&J. However, Imerys Talc quietly settled the case on confidential terms well before the trial started. The company agreed to pay the plaintiffs about $5 million to settle the claims, according to inside sources.
According to a Widener University Professor who teaches mass-tort cases, Jean Eggen, this case will grab headlines because of the fact that it is the largest verdict for a jury trial for this year. However, the decision about asbestos in J&J’s Baby Powder in favor of the women alleging that it caused ovarian cancer is going to have a much bigger, longer-term impact on the company.
She said that this new theory has found buyers, so there could be more ovarian cancer cases allegedly being caused by such talc products that will surface.
According to the plaintiffs’ lawyer, Mark Lanier, J&J knew that its products were tainted and did everything it could to keep this information from the public. He said that if a test showed that J&J’s product contained asbestos, then the company sent that product to another lab that it controlled to produce contradictory results.