Jury Orders J&J to Pay $750 Million for Talc Case Punishment

(Bloomberg) -- Johnson & Johnson was ordered by a New Jersey jury to pay an additional $750 million in punitive damages to a group of former Baby Powder users who had already been awarded $37.2 million as compensation for cancers they blamed on asbestos in the talc-based product.

After the verdict Thursday in New Brunswick, state court Judge Ana V. Viscomi reduced the punitive award to $186.5 million. State law limits the amount to five times the compensatory damages awarded to the plaintiffs last year.

Jurors in J&J’s hometown concluded after about two hours of deliberation that the company’s conduct in manufacturing and marketing the product warranted punishment. A separate jury in September found the company liable for the cancers claims and made the initial award for actual damages.

“The jury listened to all of the evidence and apparently determined there is a need for deterrence” to insure consumers are aware of the talc-based powders’ health risks, said Christopher Placitella, an attorney for the plaintiffs. Jurors spent more than two weeks hearing evidence that showed J&J officials knew there was asbestos in its baby powder and failed to warn consumers, Placitella said.

The September verdict was one of five talc cases J&J lost last year, though it prevailed in eight others. J&J, which denies its 135-year-old baby powder line is contaminated with asbestos, still faces more than 16,000 suits from women who mostly say they used the talc-based product for genital hygiene and later developed cancer. Nearly a third of those suits were filed in the last year.

J&J shares were down 0.2% to $153.62 at 3:32 p.m. in New York.

Appeals Planned

Company officials said Thursday they’ll appeal both verdicts in the New Brunswick case, saying the judge made legal errors that warrant having the results thrown out.

“Today’s verdict is at odds with the decades of evidence showing the company acted responsibly, was guided by sound science and used the most sophisticated testing available for its talc,” Kim Montagnino, a spokeswoman, said in an emailed statement.

While there’s no guarantee J&J would win, it isn’t unusual for punitive awards, especially big ones, to be reduced or tossed by trial judges or appellate courts. After a Philadelphia jury ordered J&J to pay more than $8 billion to a man who claimed its Risperdal anti-psychotic drug caused him to grow female-sized breasts, a judge last month slashed the award by 99.9% to $6.8 million.

Not-So-Final Verdicts

The talc litigation may eventually cost the company as much as $10 billion, according to Bloomberg Intelligence. Though Baby Powder accounts for only a small fraction of J&J’s annual revenue, it’s been a core brand for the company for more than a century.

Plaintiffs’ lawyers claim internal J&J documents show executives knew since the late 1960s that talc mined in places such as Vermont and Italy contained trace amounts of asbestos but failed to alert consumers or regulators. Asbestos is often found intertwined with talc when mined, though the company claims it is removed in the manufacturing process. The listed ingredients in J&J’s Baby Powder are talc and fragrance.

CEO Testimony

The New Brunswick case got special attention when J&J CEO Alex Gorsky testified last month. He was grilled over statements he made defending baby powder’s safety on national TV in 2018. Gorsky said he relied on internal experts in describing the product as safe and free of asbestos.

“The $750 million total verdict was a loud repudiation of J&J’s decades of excuses” over the company’s mishandling of its talc-based products, Moshe Maimon, another lawyer for plaintiffs, said in an emailed statement.

Plaintiffs Douglas Barden, 65; David Etheridge, 57; D’Angela McNeill-George, 41; and Will Ronning, 46; said they faced long-term exposure to carcinogens as children because their parents used Baby Powder and another J&J talc-based product, Shower to Shower, on them. The four have all been diagnosed with mesothelioma, a cancer linked to asbestos.

The punishment verdict marks the second time a hometown jury has stung J&J. Another panel ordered the company last year to pay $117 million to an investment banker who blamed asbestos-laced baby powder for his mesothelioma. That included punitive damages. The company also has won some talc cases in that court.

J&J sold the rights to Shower to Shower in 2012 to the company now known as Bausch Health Cos., which replaced the talc in the product with cornstarch.

The case is Barden vs. Brenntag North America, L-1809-17, New Jersey Superior Court, County of Middlesex (New Brunswick).

©2020 Bloomberg L.P.

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