Johnson & Johnson Faces Unfriendly Landscape in Wake of 'Nuclear Verdicts'
Lawyers believe the litigation landscape facing Johnson & Johnson could get worse given the unfriendly view the public has of drug companies.
October 23, 2019 at 01:13 PM
7 minute read
The $8 billion punitive damages verdict Johnson & Johnson was ordered to pay a user of the company's Risperdal drug in a Philadelphia courtroom earlier this month could be a harbinger of jurors' growing hostility toward drug companies, legal experts said.
The Risperdal verdict, which is expected to be reduced, is just one of a steady stream of breathtaking verdicts Johnson & Johnson has faced in litigation over the safety of its products. The number of verdicts has some lawyers saying it may be time for Johnson & Johnson to reconsider its scorched earth tactic of fighting all lawsuits.
On Sept. 30, a Los Angeles jury awarded $40 million to a woman who claimed her use of Johnson & Johnson's talc products caused her to develop mesothelioma. On Sept. 11, a Middlesex County, New Jersey, jury awarded $37.3 million to four users of the company's talc products who developed mesothelioma. J&J has also obtained a number of defense verdicts, including one in another mesothelioma case in Los Angeles on Oct. 9.
The litigation landscape could get worse with the public increasingly unfriendly to drug companies such as Johnson & Johnson.
The $8 billion verdict "tells you that the jury was pretty pissed off. It's an indication they've got a PR problem" at J&J, said Richard Ausness, a professor at the University of Kentucky School of Law who specializes in product liability law. "Apparently there was enough dirt there at trial about J&J's conduct that they got hammered."
Ausness suggests that J&J might benefit by trying to bring a "unilateral approach" to addressing litigation scattered around the country, similar to the manner in which BP negotiated a global settlement in litigation over the massive Deepwater Horizon oil spill in the Gulf of Mexico in April 2010. BP agreed to settle roughly 100,000 claims by individuals and businesses in 2012, and set aside $9.5 billion in a trust to pay for the claims. Such an approach would be akin to a bankruptcy in that Johnson & Johnson would state how much of its assets it can spend on a settlement, Ausness said.
"It might get some of the plaintiffs who haven't settled to agree to it, and it would foreclose the idea of punitives," Ausness said.
Johnson & Johnson spokesman Jake Sargent said the company continues to focus on its work solving the greatest unmet needs within society.
"As we do this, we're operating within a very litigious environment, and we must at times be willing to go to trial when the science, facts and law are on our side," Sargent said. "We also have to remain open to resolving cases through settlement when and where that's appropriate to do. We have a proven track record of being able to successfully and appropriately manage this balance."
A common thread in drug, medical device and talc lawsuits that end in "nuclear verdicts" against Johnson & Johnson is that the company knew the product was dangerous but concealed that fact from the public, said Erik Gordon, an assistant professor of business at the University of Michigan who studies drug companies. And while pharmaceutical companies have been facing public anger over high prescription drug prices, that's not motivating jurors who hit J&J with big verdicts, Gordon said.
Nuclear verdicts are those that end up being substantially more than what lawyers had expected. Lawyers generally consider those awards to be more than $10 million but not necessarily in the billions of dollars.
In the Philadelphia case, " some jurors believed that J&J knew about dangers [of Risperdal] but hid it from the public, and they consider that to be reprehensible conduct, worthy of giant punitive damages," Gordon said. "I think those kinds of allegations are the driving force behind overall dislike of drug companies. Drug companies have been on the spot for price gouging, but there's no price gouging in the J&J verdicts."
And in the cases claiming Johnson & Johnson's talc products caused users to develop ovarian cancer or mesothelioma, fear of cancer provides further motivation to jurors, Gordon said.
In lawsuits over talc, "jurors are hearing about two things that are dangerous things to defend in the courtroom," Gordon said. "They're hearing about cancer, one of the five scariest words in America, and they're hearing about cover-ups. These allegations have created great liability."
Jurors aren't necessarily predisposed to dislike drug companies, since some may have seen their lives prolonged by a drug, Gordon said.
"But when they get into the courtroom and they hear allegations that baby powder causes cancer, and other allegations that J&J knew it and concealed it, that's enough to make you angry," Gordon said.
Although the growth of breast tissue in males that is the alleged side effect of Risperdal is not as serious as cancer, the litigation over the anti-psychotic drug that was the subject of the $8 billion verdict includes allegations that J&J played down the risk, Gordon said.
The glut of litigation engulfing Johnson & Johnson may not have reached its peak, according to Elizabeth Burch, a professor at the University of Georgia School of Law who focuses on mass torts and multidistrict litigation. Talc litigation will likely go on for a long time because of the long latency of cancer caused by asbestos, and Risperdal litigation is just ramping up, she said. Many pelvic mesh cases have settled, but that area of litigation is drawing renewed interest from state attorneys general. Kentucky, Mississippi and Washington have sued J&J over pelvic Mesh, said Burch.
Looking at J&J's overall litigation landscape, with cases concerning opioids, talc, Risperdal, mesh and hip implants, "raises significant questions about J&J's safety record, but also makes it difficult to pinpoint its biggest litigation threat," said Burch.
Christopher Placitella, a plaintiffs lawyer with Cohen, Placitella & Roth in Red Bank, New Jersey, said plaintiffs' knowledge basis is broadening as more evidence that wasn't previously available finds its way to trial, making it harder for J&J to win cases.
Placitella represents plaintiffs in talc cases against Johnson & Johnson in state and federal courts.
Placitella said Johnson & Johnson is disinclined to settle drug and talc cases, regardless of whether an individual case is strong or not. He said the standard on appeal in most jurisdictions is whether the trial court abused its discretion, "which is a high bar for them to overcome. That might be the strategy but I don't think that's a great strategy," he said. "Philosophically they take the position that they want to send a message—they want to fight every case, regardless of the merits."
Placitella said a change in litigation strategy would help turn around the company's fortunes. Specifically, J&J should try to resolve the strong claims against it, and focus just on going to trial on the cases it believes it can win.
"Right now J&J is scorched-earth, no matter what the merits are," Placitella said.
But Johnson & Johnson's sheer size allows it to try more cases, even in hostile jurisdictions, and it has a good track record on appeal, said James Beck of Reed Smith in Philadelphia, who represents drug manufacturers in products liability suits.
"No other company is big enough to take the risk of, say, a 23-plaintiff talc trial in St. Louis," said Beck. "The threatened exposure in such cases forces smaller defendants to settle. J&J risks verdicts to get them overturned on appeal. Speaking as an advocate of pro-defense legal positions, I'm glad they do."
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