By Brendan Pierson
(Reuters) - After a $67.5 million jury verdict against Johnson & Johnson (N:JNJ) on Oct. 27 marked its third straight trial defeat in an onslaught of lawsuits claiming its talc-based products cause ovarian cancer, the company is hoping to reverse the trend by having the cases heard in a different court.
All three awards, totaling around $195 million, were handed down in state court in St. Louis, Missouri, with the same judge presiding. Women or their families have filed 2,500 similar claims, the vast majority in the same court, which is one of several in the United States that attracts consumer lawsuits.
The plaintiffs claim studies show J&J's Baby Powder and Shower to Shower products, when used in the vaginal area, increase the risk of ovarian cancer. The company counters that larger, more comprehensive studies show no such link.
In a court filing in August, J&J argued the case should be dismissed because plaintiffs’ lawyers tainted the St. Louis jury pool. The company said the other side spent almost $10 million on national and local television commercials in the previous year, with a disproportionate share of them running in St. Louis. The women's lawyers have denied J&J's claim.
The company also contended that, because most of them are not from St. Louis and the New Jersey-based company has no strong ties to the area, the cases should not have been heard there. The judge rejected both arguments.
John Beisner, one of the top lawyers representing J&J, said the company plans to make the same arguments to the Missouri Court of Appeals. If the St. Louis court is found not to have jurisdiction, the cases would have to be refiled elsewhere.
Beisner compared the St. Louis verdicts to a favorable ruling in September from a state court judge in New Jersey. That judge, who is presiding over some 200 talc cases, disqualified the plaintiffs' experts on the grounds that their scientific testimony was too speculative.
In the same decision, he dismissed the first two cases set for trial and the ruling is being appealed.
J&J unsuccessfully tried to block the testimony of the experts in St. Louis on similar grounds. The company will make the same challenge on appeal, Beisner said.
Last week's $70 million verdict followed Missouri jury awards of $72 million in February and $55 million in May.
The first big talc verdict in February was won by the family of Jacqueline Fox, who died in October 2015. Their lawyers said she used J&J Baby Powder and Shower to Shower Powder daily for 35 years for genital hygiene before she was diagnosed with ovarian cancer in 2013.
Jere Beasley, whose firm has filed hundreds of talc cases, including the three Missouri wins and two New Jersey dismissals, said the verdicts should prompt J&J to make a deal.
"If I were representing them, I would say, folks, we need to sit down and regroup and start trying to settle these cases," he said.
LARGE VERDICTS
Large verdicts are relatively common in major product liability cases, and they are often reduced or overturned on appeal. One lawsuit against Merck (NYSE:MRK) & Co over its recalled painkiller Vioxx produced a $253 million verdict in 2005, which was thrown out three years later. Merck eventually settled most Vioxx cases for $4.85 billion in 2007.
Shareholders in J&J, which had sales of $70 billion last year, have so far shrugged off the three talc verdicts, the first of the cases to go to trial. But if the trend continues, liability could mount. The company has not reported setting aside any litigation reserve to deal with talc cases, as it has with previous claims over antipsychotic drug Rispardal and recalled hip implants.
J&J no longer sells Shower to Shower, which was acquired by Valeant Pharmaceuticals (NYSE:VRX) in 2012. Though not a major seller on its own, Baby Powder is a recognized symbol of J&J’s baby care line, which brought in $2 billion in revenue in 2015.
Some legal experts said it made sense for J&J to fight on.
"Ordinarily I would say three verdicts like that would prompt you to think about settlement," said University of Georgia Law School professor Elizabeth Burch, who researches product liability cases, but she said J&J's case is somewhat different.
A settlement would not necessarily cap J&J's liability, Burch said, because its talc products are still on the market, unlike companies whose products have been recalled.
Howard Erichson, a professor at Fordham School of Law, said the company also had valid concerns about the impact of a settlement on its position in the market.
"This is not Vioxx. This is not asbestos," Erichson said. "This is a case where the company wants to defend its brand, and is not going to be anxious to announce a big settlement that appears to concede that the product is harmful.