Johnson and Johnson's Appeal To Undo Fine Rejected By Supreme Court

Johnson & Johnson's appeal to undo a $2.1 billion damages fine was rejected by the Supreme Court on Tuesday, the 1st of June. The company was hit with allegations that the asbestos found in its talc powder products, including baby powder, led to the development of ovarian cancer in women.

The Supreme Court dismissed the appeal by Johnson and Johnson without any statements. Two Justices; Samuel Alito and Brett Kavanaugh recused themselves from taking up the case, according to the order.

Johnson and Johnson had earlier asked the Supreme Court to look into the fine it was mandated to pay last year by the Supreme Court in Missouri. The fine was over $4 billion but was reduced by a state appeal court to $2.1 billion.

This controversy has seen a vicious legal presence from both sides, Neal Katyal, who's a former legal solicitor general representing the pharmaceutical company, New Brunswick, and Ken Start, firm Whitewater prosecutor representing the women with ovarian cancer who sued the company.

Johnson and Johnson have said that it stopped the sales of its talc-based baby powder in the United States and Canada since May 2020, claiming demand for the product went down due to "misinformation around the safety of the product and a constant barrage of litigation advertising.”

The company revealed that it is currently facing more than 21,800 lawsuits against it over its talc products.

Starr wrote in his brief urging the justices not to review the case that Johnson & Johnson “knew for decades that their talc powders contained asbestos, a highly carcinogenic substance with no known safe exposure level.”

“They could have protected customers by switching from talc to cornstarch, as their scientists proposed as early as 1973. But talc was cheaper and petitioners were unwilling to sacrifice profits for a safer product,” he wrote.

To dispute the point, Katyal argued that “federal regulators and respected health organizations have rejected calls for warnings on talc, and comprehensive epidemiological studies tracking tens of thousands of talc users have found no meaningful association between cosmetic talc use and ovarian cancer.”

Katyal said that attorneys for those who had sued Johnson & Johnson had searched the country “for women who were both diagnosed with ovarian cancer and among the millions who used Petitioners’ talc products.”

“They put dozens of plaintiffs on the stand to discuss their experiences with cancer, and the jury awards billions of dollars in punitive damages supposedly to punish Petitioners,” he wrote. “Lawyers can then follow this script and file the same claims with new plaintiffs and seek new outsized awards, over and over again.”

In a statement released on Tuesday, Johnson & Johnson said that the Supreme Court’s decision left vital legal questions unsolved.

“The matters that were before the court are related to legal procedure, and not safety,” the company said. “Decades of independent scientific evaluations confirm Johnson’s Baby Powder is safe, does not contain asbestos, and does not cause cancer.”

The company's stock (JNJ) on the NYSE are currently trading at $166.08 per share, 1.87% less than Monday.

Johnson & Johnson, which was founded in 1886 in New Brunswick, New Jersey, is an American company which develops and produces pharmaceuticals, medical devices and consumer packaged products. The company is ranked 37 on the Fortune 500 list of largest US companies by total revenue. In 2020, it brought in $82.584 billion in revenue, making it one of the most valuable companies in the world.

In 2020, the company's three major business sectors: Pharmaceuticals, Medical Devices, and Consumer Health, contributed 55%, 28%, and 17% respectively to its revenue.