Is forty years enough time for a company to remove harmful ingredients from a product? The complaint for this securities class action claims that Johnson & Johnson knew that its talc contained asbestos as early as 1972 but hid this from the public. According the complaint, 5,000 lawsuits have been filed against the company by victims of ovarian cancer and mesothelioma, illnesses purportedly caused by asbestos.
The class for this action is all persons and entities who acquired the publicly-traded securities of J&J between February 22, 2013 and February 7, 2018.
The filings and other public statements by J&J during the class period have to do with assertions of compliance with regulations, of high quality in products, of the adequacy of product warnings, and of the company’s belief that it has substantial defenses in liability lawsuits.
For example, in an article on cancer in a pro figure skater, allegedly caused by baby powder, the company said, in part, that “the safety of cosmetic talc is supported by decades of scientific evidence and independent peer-reviewed studies.” And a statement from its website says, “Our talc is carefully selected, processed and tested to ensure that is [sic] asbestos free, as confirmed by regular testing conducted since the 1970s.”
However, on September 21, 2017, Bloomberg published an article claiming that documents unsealed in a lawsuit against J&J showed that “J&J has known for decades that its talc products include asbestos fibers and that the exposure to those fibers can cause ovarian cancer.” The article claimed that more than 5,000 lawsuits across the country blamed the company’s baby powder for ovarian cancer.
One of the unsealed documents, the article claimed, was a May 1974 item from an official at J&J’s Windsor mine in Vermont that recommended “the use of citric acid in the depression of chrysotile asbestos” from talc mined at the site.
A press release from a law firm with a current suit against the company claimed that previous lawsuits had uncovered previously hidden information:
At the various revelations, J&J’s stock price fell. The complaint claims that the failure to disclose the presence of asbestos in talc products, and the company’s public statements on related matters, are violations of the Securities Exchange Act of 1934.