Product News and Recalls

Massive J&J Verdict Survives First Test

judge leaves multi-billion dollar Johnson & Johnson verdict untouchedIn a previous post, we discussed the $4.7 billion verdict recently awarded to 22 plaintiffs who claimed that asbestos present in Johnson & Johnson’s Baby Powder caused them to develop ovarian cancer. The verdict was one of the largest in history and sent J&J stock tumbling. Even in the face of such a verdict, J&J remained steadfast and even defiant in its tone. The company issued statement after statement unequivocally denying the presence of asbestos in any of its talc products.

One can only imagine, then, the shockwaves that reverberated throughout Johnson & Johnson’s executive suites when Reuters published an investigative report that asserted, among other things, that not only had asbestos been present in J&J talc products for decades, but that the company was aware of it and actively worked to keep that fact from the public. Based primarily on the content of internal company documents, the bombshell report was a massive hit to the public perception of J&J as a wholesome, trustworthy company. Wall Street reacted accordingly and erased billions more in value from the world’s largest healthcare goods manufacturer.

Historically speaking, verdicts of the magnitude of the J&J decision are prone to reductions and, in some cases, even complete reversals depending on the judge’s interpretation of what can be considered a reasonable award given the circumstances. This verdict, however, has now withstood its first test. A Missouri judge has upheld the verdict and his reasoning seems to be rooted, at least in part, to the revelations put forth by the Reuters piece. Citing the claim that J&J “knew of the presence of asbestos in products that they knowingly targeted for sale to mothers and babies, knew of the damage their products caused, and misrepresented the safety of these products for decades,” Judge Rex Burlison left the verdict completely untouched.

The corporation is now operating in damage control mode as 2019 promises a flood of new lawsuits – some of them with groups of plaintiffs larger than the 22 whose verdict has already broken records. A stock buyback plan has been initiated and the company has launched a PR offensive. Full-page advertisements have begun appearing in news publications around the country attempting to reassure a scorned public of the safety of its products.

Pandora’s box, however, may already be open on a company whose entire image has been dependent on trustworthiness and wholesomeness for over a century. The result of that company knowingly introducing asbestos into millions of American homes for decades remains to be seen.