Updated December 30th, 2023 at 14:22 IST
Federal Judge certifies class action for Johnson & Johnson shareholders on talc disclosure
Lawsuit alleges J&J's stock price suffered multiple declines in late 2017 & 2018 due to events confirming company's concealment of asbestos in its talc products
A federal judge has granted certification for a class action lawsuit against Johnson & Johnson, allowing shareholders to collectively pursue allegations that the company fraudulently concealed the presence of cancer-causing asbestos in its talc products.
US District Judge Zahid Quraishi in Trenton, New Jersey, ruled on Friday that shareholders who held stock from February 22, 2013, to December 13, 2018, can proceed as a group in their securities fraud claims.
Despite J&J's attempt to shorten the class period by at least a year, arguing that certain events causing stock price declines did not reveal new information, the judge rejected this argument. J&J's talc products, including its iconic baby powder, have been at the center of controversy.
The company ceased global sales of talc-based baby powder this year, replacing it with corn starch, while maintaining that its talc products are safe and asbestos-free.
Erik Haas, J&J's worldwide vice president of litigation, affirmed the company's commitment to providing truthful disclosures and stated their intention to vigorously defend against challenges to product safety or the accuracy of public statements.
Shareholders, including lead plaintiff San Diego County Employees Retirement Association, aim to benefit from the advantages of a class action, making it easier and more cost-effective to recover damages compared to individual lawsuits.
The lawsuit alleges that J&J's stock price suffered multiple declines in late 2017 and 2018 due to events confirming the company's concealment of asbestos in its talc products. These events included a jury award in July 2018 to 22 women who claimed ovarian cancer resulted from asbestos exposure and a subsequent Reuters report revealing J&J's awareness of asbestos risks for decades.
J&J argued that these events did not contain new information, but the judge disagreed, stating that the Reuters report provided careful analysis and necessary context, making it more than a repetition of stale information.
The company is also facing over 50,000 lawsuits in mass tort litigation related to its talc products. Previous attempts by J&J to use bankruptcy proceedings to limit its exposure to talc litigation have been rejected by the courts.
(With Reuters Inputs)
Published December 30th, 2023 at 14:22 IST