Johnson & Johnson (NYSE: JNJ) is reaching deeper in its pockets to comply with the verdict of its second major lawsuit this month.
On Wednesday, a Philadelphia court ordered Johnson & Johnson to pay $8 billion in damages to a Risperdal consumer who said the company had failed to warn of the drug’s risk of gynecomastia — breast development in males. The man had previously been awarded $680,000 for the same claims.
The USDA had approved the drug in 1993, but the plaintiffs claim Johnson & Johnson inappropriately marketed it for unauthorized use for children.
Why It’s Important
The case marks Johnson & Johnson's second legal payout this month. On Oct. 1, it agreed to pay $20 million to settle an opioid lawsuit with two Ohio counties.
The stock has risen since that settlement's announcement, but it dropped 2% Wednesday morning with news of the latest legal bill. The company faces thousands more unsettled Risperdal cases in the state of Pennsylvania, alone.
Trials also continue on Johnson & Johnson’s talcum powder scandal. Last month, New Jersey closed its trial with a $37.3 million verdict.
Management intends to appeal the decision. It claims that the court violated due process by precluding Johnson & Johnson from presenting key evidence to its defense and neglecting to elicit proof of harm alleged by the plaintiff. It also cites inconsistency with findings in outside districts and with legal precedent established by higher courts.
“United States Supreme Court precedent dictates that punitive damages awards that are a double-digit multiplier of the compensatory award should be set aside,” it said.
Management expects a reduction in the sum of damages.
“This award is grossly disproportionate with the initial compensatory award in this case, and the Company is confident it will be overturned,” it said in a statement.
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