$572M in first opioid case. Not enough...

Johnson & Johnson ordered to pay $572M in first opioid case

By PAUL DEMKO

A judge has ordered Johnson & Johnson to pay $572 million to Oklahoma for its role in fueling the state’s opioid crisis, in a highly anticipated ruling likely to have implications for a mass of litigation across the country challenging opioid makers and distributors.

The ruling against the health care giant followed the country’s first trial brought by a state government seeking to hold a drugmaker responsible for the death and devastation wrought by the opioid epidemic. Local governments, hospitals and tribes have filed nearly 2,000 similar lawsuits — many of which have been tied together — challenging pharmaceutical companies over their alleged roles in flooding the country with powerful prescription painkillers.

Cleveland County District Court Judge Thad Balkman on Monday ruled Johnson & Johnson aggressively marketed opioids and promoted misleading medical claims that underplayed the drugs’ addiction risk.

"Defendants caused an opioid crisis that is evidenced by increased rates of addiction, overdose deaths and neonatal abstinence syndrome," Balkman said.

The damages appeared to be smaller than Wall Street was expecting, as stocks of companies involved in opioid litigation spiked upward after the ruling. Wells Fargo analysts earlier said they believed Johnson & Johnson could have faced a payout of more than $2 billion in the Oklahoma lawsuit.

“This is not the eye-popping result that some people expected it to be,” said Andrew Pollis, a professor at Case Western Reserve University School of Law, who has tracked the opioid litigation closely.

Still, the Monday ruling was a strong signal for other opioid lawsuits still pending, some experts said.

"It may not be the billions that some people were projecting, but this precedent, from the standpoint of the plaintiffs, is a green light,” said Thomas Cooke, a professor at Georgetown University’s McDonough School of Business. “Had this verdict been in favor of Johnson & Johnson, the impact would have been devastating on future cases."

The ruling could influence settlement talks in the massive trove of pending cases overseen by federal judge in Ohio. The judge for over a year has been pushing for a nationwide settlement that experts believe could be the biggest since tobacco companies agreed to pay $250 billion two decades ago. The first of those trials is scheduled to begin this fall.

However, the Oklahoma lawsuit may be an imperfect bellwether for those cases, largely because the highest-profile opioid maker, Purdue Pharma, wasn’t on trial. In addition, the state's “public nuisance” statute that Oklahoma relied on to make its case won’t be relevant to the proceedings in Ohio.

Oklahoma originally named Purdue and Teva Pharmaceuticals in the same litigation. Before the case went to trial, Oklahoma settled with Purdue for $270 million in March, partially because the state feared the drugmaker would declare bankruptcy and avoid paying anything. Oklahoma also reached an $85 million settlement with Teva Pharmaceuticals days before the trial started in May.

That left Johnson & Johnson as the lone defendant. Oklahoma’s attorneys portrayed the pharmaceutical giant as the “kingpin” of the opioid epidemic during the seven-week trial. They argued that Johnson & Johnson, through its subsidiaries, including Janssen Pharmaceuticals, supplied much of the raw material that other drugmakers relied on to hook millions of Americans onto pain pills. They said the state would need as much as $17.8 billion over the next 30 years to address fallout from the addiction crisis.

Johnson & Johnson, which on Monday said it would appeal the ruling, vigorously denied Oklahoma’s claims and accused it of trying to scapegoat the company for a public health disaster it wasn’t responsible for creating. The company’s attorneys also suggested that Oklahoma officials were asleep at the switch as the crisis mounted and failed to take action.

“Janssen did not cause the opioid crisis in Oklahoma, and neither the facts nor the law support this outcome,” said Michael Ullmann, Johnson & Johnson’s general counsel, in a statement.