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J&J loses bid to overturn baby powder verdict, but damages cut to $2.12 bln

(Reuters) – A Missouri appeals court on Tuesday rejected Johnson & Johnson’s bid to throw out a jury verdict in favor of women who blamed their ovarian cancer on its baby powder and other talc products, but reduced damages by more than half, to $2.12 billion.

The Missouri Court of Appeals lowered the original $4.69 billion verdict from July 2018 after dismissing claims by some of the 22 women and their families who had sued.

But it said the plaintiffs had proven that J&J and an affiliate concealed for decades that the talc products contained asbestos, “worked tirelessly” to ensure that testing protocols would not detect asbestos in all talc samples and published articles downplaying the safety hazards of talc.

“Plaintiffs proved with convincing clarity that defendants engaged in outrageous conduct because of an evil motive or reckless indifference,” the court said. “There was significant reprehensibility in defendants’ conduct.”

J&J said it will appeal to the Missouri Supreme Court.

“We continue to believe this was a fundamentally flawed trial, grounded in a faulty presentation of the facts,” spokeswoman Kim Montagnino said. “We deeply sympathize with anyone suffering from cancer, which is why the facts are so important. We remain confident that our talc is safe, asbestos free, and does not cause cancer.”

Tuesday’s decision followed J&J’s May 19 announcement that it would stop selling its Baby Powder talc in the United States and Canada.

The New Brunswick, New Jersey-based company faces more than 19,000 lawsuits claiming that its talc products cause cancer because of contamination from asbestos, a known carcinogen.

J&J’s payout in Tuesday’s decision includes $500 million of compensatory damages and $1.62 billion of punitive damages, down from a respective $550 million and $4.14 billion in the original verdict from a Missouri circuit court.

Mark Lanier, the lead lawyer for plaintiffs, called the decision “a clarion call for J&J to try and find a good way to resolve the cases for the people who have been hurt.”

J&J has faced intense scrutiny of its baby powder’s safety following a 2018 Reuters investigative report that found it knew for decades that asbestos lurked in its talc.

Internal company records, trial testimony and other evidence show that from at least 1971 to the early 2000s, J&J’s raw talc and finished powders sometimes tested positive for small amounts of asbestos. J&J has been the target of a federal criminal probe on how forthright it has been about the safety of its talc products, as well as an investigation by 41 U.S. states of its baby powder sales.

The company has also faced an investigation by a congressional subcommittee on the health risks of asbestos in consumer products containing talc.

J&J on Tuesday declined further comment on these matters.

Johnson & Johnson’s shares were down 39 cents at $142.83 in late trading on the New York Stock Exchange.

(Reporting by Jonathan Stempel in New York; Additional reporting by Lisa Girion in Los Angeles and Carl O’Donnell in New York; Editing by Franklin Paul, Bill Berkrot and Dan Grebler)