Home Class Action Lawsuits J&J beats workers’ lawsuit over talc claims’ impact on stock

J&J beats workers’ lawsuit over talc claims’ impact on stock

by admin
0 comment

A bottle of Johnson and Johnson Baby Powder is seen in a photo illustration taken in New York, February 24, 2016. REUTERS/Shannon Stapleton/Illustration/File Photo

Register now for FREE unlimited access to Reuters.com

  • Alleged coverup of asbestos claims caused stock drop -workers
  • But disclosure could have done more harm than good, court says

(Reuters) – Johnson & Johnson on Wednesday defeated a bid by a group of employees to revive their proposed class action claiming the company’s attempts to conceal allegations that its talc-based baby powder contained asbestos caused an employee stock plan to plummet.

A unanimous three-judge panel of the 3rd U.S. Circuit Court of Appeals said it would have been reasonable for J&J to conclude that disclosing the allegations earlier would do more harm than good, “particularly given the uncertainty about J&J’s future liabilities and the future movement of its stock price.”

J&J has been hit with tens of thousands of lawsuits from consumers who claim the company’s talc-based powder gave them cancer. The company’s stock dropped more than 10% following a December 2018 Reuters’ report that said the company had concealed the fact that its baby powder contained asbestos.

Register now for FREE unlimited access to Reuters.com

J&J, which has denied wrongdoing and says its talc products are safe, did not immediately respond to a request for comment. Neither did lawyers for the plaintiffs.

The plaintiffs in Wednesday’s lawsuit, filed in New Jersey federal court, said J&J had breached its fiduciary duty to employees enrolled in a retirement plan that invested in the company’s stock by not disclosing the allegations prior to Reuters publishing its report. They said the plan lost millions of dollars as a result.

J&J has said that it could not have made corrective disclosures because the company believed its baby powder did not contain asbestos or cause cancer.

U.S. District Judge Freda Wolfson dismissed the case last year, saying the company had shown that an earlier disclosure could have done more harm than good to its stock value.

The U.S. Supreme Court established the “more harm than good” standard for cases involving employee stock ownership plans in the 2014 case Fifth Third Bancorp v. Dudenhoeffer.

The 3rd Circuit on Wednesday rejected the plaintiffs’ appeal, saying J&J could not have known that the claims about its baby powder would have such an impact on its stock.

“It was a guess that J&J’s stock price would drop significantly, and there was even less certainty about the timing and degree of such a drop,” Circuit Judge Kent Jordan wrote.

The panel included Circuit Judges Luis Restrepo and D. Brooks Smith.

Last October, J&J assigned its talc liabilities to a newly created subsidiary called LTL Management LLC, which filed for bankruptcy days later. J&J said last month that it would stop selling talc baby powder globally in 2023 and switch to cornstarch-based powder.

The case is Perrone v. Johnson & Johnson, 3rd U.S. Circuit Court of Appeals, No. 21-1885.

For the plaintiffs: Jacob Zamansky of Zamansky

For J&J: Mark Blocker of Sidley Austin

Read more:

Johnson & Johnson knew for decades that asbestos lurked in its baby powder

J&J to end global sales of talc-based baby powder

Judge greenlights J&J strategy to resolve talc lawsuits in bankruptcy court

J&J to spin off consumer products and focus on pharmaceuticals

Inside J&J’s secret plan to cap litigation payouts to cancer victims

Register now for FREE unlimited access to Reuters.com

Our Standards: The Thomson Reuters Trust Principles.

Source link

You may also like

Leave a Comment

Soledad is the Best Newspaper and Magazine WordPress Theme with tons of options and demos ready to import. This theme is perfect for blogs and excellent for online stores, news, magazine or review sites.

Buy Soledad now!

Edtior's Picks

Latest Articles

u00a92022u00a0Soledad.u00a0All Right Reserved. Designed and Developed byu00a0Penci Design.