Johnson & Johnson
- Company Name
- Johnson & Johnson
- Stock Symbol
- Class Period
- February 22, 2013 to February 7, 2018
- Motion Deadline
- April 10, 2018
- District of New Jersey
The complaint charges Johnson & Johnson (“J&J”) and certain of its officers with violations of the Securities Exchange Act of 1934. J&J, together with its subsidiaries, researches, develops, manufactures and sells various products in the healthcare field worldwide.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements regarding the Company’s Baby Powder and other talc-based products and concealed damning internal documents and information that undermined the Company’s decades-long claims that its Baby Powder and other talc-based products were free from asbestos and other carcinogens. As a result of defendants’ false statements and omissions about J&J’s talc products, J&J securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of $148.14 per share.
Since at least the 1970s, J&J has faced accusations that cancer-causing asbestos fibers and heavy metals were present in the talc used in its Baby Powder and other products. In June 2014, the Mississippi Attorney General filed a complaint charging the Company with failing to disclose health risks associated with female consumers’ use of J&J’s talc-based products. In recent years, consumers have also filed thousands of cases against J&J alleging that the Company’s Baby Powder and other talc products caused mesothelioma and ovarian cancers. J&J has denied these allegations, vigorously defended itself in court and embarked on a public relations campaign in an attempt to dispel any customer concerns.
Undermining J&J’s denials, on February 4, 2018, Salon publicized recently revealed internal Company documents that “raise[d] questions about J&J’s candor on the incendiary topic of asbestos and talc,” including a handwritten memorandum by the Company’s former CEO that questioned how harmful J&J’s Baby Powder would be to a baby if the product contained 1% asbestos fibers. Other documents showed that the Company had tried to persuade regulators to approve products containing up to 1% asbestos fibers, even though the scientific consensus is that there is no safe level of asbestos, and that internal Company tests had discovered “sub-trace quantities” of minerals in J&J Baby Powder that “might be classified as asbestos fibers.” On February 5, 2018, CNBC issued a statement that the Company’s stock had “fallen on a report that lawsuits could expose potentially damaging documents.” The Company was in the midst of defending itself in a second trial against allegations brought by a mesothelioma sufferer. On this news, J&J stock fell $7.29 per share, or 5%, to close at $130.39 per share on February 5, 2018.
Then, on February 7, 2018, J&J consumers suing the Company issued a press release revealing that “never-before-seen documents” from the Company and its talc supplier recently produced in discovery “shed light on just how prevalent asbestos and heavy metals are in the talc used in Baby Powder.” The press release also disclosed that “the corporate giants continue to reveal more hidden information, adding to a growing body of knowledge about the safety of talc products and their response.” On this news, the price of J&J stock fell $5.06 per share, or 4%, to close at $126.36 per share on February 8, 2018