In a groundbreaking ruling, a federal judge in Trenton, New Jersey, has officially certified a class action for Johnson & Johnson shareholders, providing them with the collective ability to pursue claims accusing the company of fraudulent concealment regarding asbestos contamination in its talc products. U.S. District Judge Zahid Quraishi’s recent decision allows shareholders to unite in advancing securities fraud claims collectively, covering the period from Feb. 22, 2013, to Dec. 13, 2018.
This ruling comes despite J&J’s attempt to advocate for a shorter class period, arguing that certain events causing stock price declines did not introduce «new» information. Renowned for its talc-based baby powder, Johnson & Johnson ceased global sales of such products in 2023, emphasizing the transition to corn starch as the primary ingredient and steadfastly asserting the safety of its talc products, denying any asbestos contamination.
Erik Haas, J&J’s Worldwide Vice President of Litigation, reiterated the company’s commitment to transparent disclosures and pledged to vigorously defend cases challenging product safety or public statement accuracy.
Shareholders, including lead plaintiff San Diego County Employees Retirement Association, allege that J&J’s stock price experienced six declines between late 2017 and 2018 due to revelations about the company concealing asbestos in its talc products. Events triggering these declines included a landmark $4.69 billion jury award in July 2018 linking ovarian cancer to asbestos exposure and a subsequent Reuters report later that year exposing J&J’s long-standing awareness of asbestos risks.
Despite J&J’s argument that these events did not present new information, Quraishi disagreed, highlighting the careful analysis and necessary context provided by the Reuters report, deeming it more than a recap of stale information. On the day of the report’s release, the company’s share price plummeted by 10%.
This class action certification empowers shareholders to collectively pursue claims, potentially enhancing the overall amount recovered. As Johnson & Johnson confronts a mounting wave of litigation with over 50,000 lawsuits related to its talc products, this landmark ruling adds significant weight to the legal challenges, marking a pivotal moment in the ongoing legal battle surrounding talc contamination allegations.
