The New York Supreme Court's appellate branch reversed an earlier decision in favor of plaintiff Donna Olson, who claimed her lifelong use of J&J's talc caused her to develop mesothelioma. With a win, J&J is also free to pay Olson $120 million in damages, a figure that was reduced from a $325 million award.
The plaintiffs failed to "establish sufficient exposure to a substance to cause the claimed adverse health effect" at trial, according to the appellate court's decision. To show that a toxin, such as asbestos, caused a person's mesothelioma, plaintiffs must present expert testimony that provides "a scientific expression of the level of exposure to toxins in defendant's products that was sufficient to have caused the disease," according to the court.
According to the court, Olson's medical expert failed to meet that standard.
After a four-month trial in 2019, jurors ordered J&J to pay $300 million in punitive damages, as well as $20 million for Olson's past and future pain and $5 million to her husband for loss of consortium.
According to a J&J spokesperson, the trial "suffered significant legal and evidentiary errors that Johnson & Johnson believes will warrant a reversal on appeal."
J&J is also using a strategy known as the Texas two-step to absorb liabilities in its complex talc litigation. According to the strategy, J&J spun up the subsidiary LTL management last year to funnel talc claims and then declared that company bankrupt.
While other companies have used the strategy to protect assets and avoid litigation costs, J&J and LTL aren't out of the woods yet: In May, the Third Circuit Court of Appeals announced that it would reconsider an earlier decision that supported J&J's use of the tactic.
J&J, for its part, has maintained its denial that its baby powder caused ovarian cancer or mesothelioma. The company no longer sells the product in the United States and Canada, and it has recently resisted shareholder calls to halt global sales as well.