If Johnson & Johnson investors and company executives thought 2018 was bad, they may not have seen anything yet. With a massive verdict of over $4 billion leading the way and more than 10,000 additional lawsuits waiting the wings, J&J finds itself in a battle to not only reclaim its wholesome and trustworthy image, but perhaps even in a battle for its very survival.
To put the matter in perspective, the verdict that shook the company to its core was found for a group of 22 plaintiffs. $4.69 billion was awarded, and the vast majority of that award was in the form of punitive damages. Since that time, a bombshell investigative report by Reuters used internal J&J documents and communication to conclude that not only was Johnson & Johnson aware that its talc products contained asbestos, but that it had known this fact for decades and had actively worked to keep that information from becoming public knowledge.
A federal judge has recently upheld the verdict, presumably due at least in part to the notion that J&J was knowingly exposing America’s families for decades to a substance they knew to be harmful.
Among the trials waiting to be heard in 2019 is a group of almost 40 women who claim the very same harms via the very same minerals. That trial will be held in the same federal court as the $4 billion decision.
Yet, in the face of all of this – including the release of its own internal communications – J&J continues to deny everything. “Johnson & Johnson is committed to defending these cases based on the strong scientific evidence that talc does not cause cancer,” says a company spokesman in a statement emailed to the LA Times. And, even in the face of a steadfast and defiant defense, investors acknowledge that the coming year will be a tumultuous one for the company. “I don’t believe they did anything wrong,” says a portfolio manager with a company that owns a portion of J&J shares, “but I think this is going to a major overhang for a long time. I could see the number of lawsuits doubling or more, and just the cost to defend them all could reach into the billions.”
But J&J’s statement in response to these latest developments is worth re-reading. The company’s spokesman asserts that there is “strong scientific evidence that talc does not cause cancer.” Yet that is not what these women have asserted. The presence of asbestos and the company’s efforts to cover it up are matters of vastly more importance. And, if juries around the country pay attention to those subtle differences, the road ahead could be a very long one for Johnson & Johnson.