1 00:00:03,480 --> 00:00:07,560 Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every 2 00:00:07,640 --> 00:00:10,440 Speaker 1: day we bring you insight and analysis into the most 3 00:00:10,480 --> 00:00:13,399 Speaker 1: important legal news of the day. You can find more 4 00:00:13,440 --> 00:00:18,040 Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud 5 00:00:18,320 --> 00:00:23,280 Speaker 1: and on Bloomberg dot com slash podcasts. In an unusual turn, 6 00:00:23,600 --> 00:00:26,120 Speaker 1: Johnson and Johnson will have to face a second jury 7 00:00:26,120 --> 00:00:29,240 Speaker 1: in a California tal case because the first jury couldn't 8 00:00:29,280 --> 00:00:32,840 Speaker 1: agree whether a dying woman was eligible for punitive damages. 9 00:00:33,240 --> 00:00:36,040 Speaker 1: The jury did find that the company's talk products caused 10 00:00:36,040 --> 00:00:39,479 Speaker 1: her cancer and award her twelve million dollars. Joining me 11 00:00:39,479 --> 00:00:42,600 Speaker 1: as Peter Hanney, professor at Wayne State University Law School, 12 00:00:42,840 --> 00:00:46,400 Speaker 1: Peter tell us about the jury's findings as two damages 13 00:00:46,520 --> 00:00:51,240 Speaker 1: against J and J. Colgate, pom Olov, and avon Well. 14 00:00:51,880 --> 00:00:55,800 Speaker 1: The starting point, he is that they found that the 15 00:00:55,840 --> 00:01:00,440 Speaker 1: talcum powder did in fact caused the cancer. So the 16 00:01:00,480 --> 00:01:05,080 Speaker 1: award of the twelve million was for the damages and 17 00:01:05,160 --> 00:01:08,920 Speaker 1: the harm that was caused to her. The question now 18 00:01:09,280 --> 00:01:15,240 Speaker 1: is whether this second jury will give punitive damages or 19 00:01:15,280 --> 00:01:19,640 Speaker 1: what California calls exemplary damages, and that that's going to 20 00:01:19,760 --> 00:01:23,720 Speaker 1: require a different standard that the plaintiff has to show 21 00:01:23,800 --> 00:01:28,360 Speaker 1: by clear and convincing evidence that the defendant is guilty 22 00:01:28,480 --> 00:01:32,320 Speaker 1: of what the statute says is oppression, fraud, or malice. 23 00:01:32,560 --> 00:01:36,839 Speaker 1: And so that's a higher standard to try to get 24 00:01:36,920 --> 00:01:40,480 Speaker 1: punitive damages in this type of case. So, in the 25 00:01:40,680 --> 00:01:44,560 Speaker 1: punitive damages portion of the first trial, the jurors did 26 00:01:44,560 --> 00:01:48,680 Speaker 1: not find evidence that Colgate acted with malice, but they 27 00:01:48,680 --> 00:01:52,680 Speaker 1: were deadlocked on whether Jay and Ja did. So the 28 00:01:52,760 --> 00:01:56,120 Speaker 1: child judges requiring a new trial, a sort of a 29 00:01:56,200 --> 00:02:00,560 Speaker 1: mini trial, to consider only the punitive damages against Ja 30 00:02:00,720 --> 00:02:06,400 Speaker 1: and J. How unusual is that, Well, certainly it's not typical. 31 00:02:06,560 --> 00:02:12,160 Speaker 1: Usually you have one jury deciding both the award of 32 00:02:12,320 --> 00:02:15,480 Speaker 1: actual damage as the harm to the plain, different than 33 00:02:15,600 --> 00:02:19,080 Speaker 1: punitive damages. For example, last month in New York, a 34 00:02:19,160 --> 00:02:23,440 Speaker 1: jury awarded three million dollars against Johnson and Johnson and 35 00:02:23,560 --> 00:02:28,320 Speaker 1: punitive damages, and that was the same jury. So it's 36 00:02:28,320 --> 00:02:32,840 Speaker 1: certainly not typical. But it is a way for a 37 00:02:32,960 --> 00:02:36,359 Speaker 1: judge to bring together a new group of jurors and 38 00:02:36,400 --> 00:02:40,200 Speaker 1: then to say, all right, you guys figure out whether 39 00:02:40,240 --> 00:02:44,440 Speaker 1: there should be the award of any punitive damages. And 40 00:02:44,960 --> 00:02:48,120 Speaker 1: for punitive damages, the California statue, which goes back to 41 00:02:48,760 --> 00:02:54,720 Speaker 1: seventy two. UM talks about a despicable conduct by the defendant, 42 00:02:54,960 --> 00:02:57,440 Speaker 1: and so you know what they're going to have to 43 00:02:57,520 --> 00:03:04,160 Speaker 1: look at is how aspicable was Johnson and Johnson. J 44 00:03:04,360 --> 00:03:08,000 Speaker 1: and J says the process is prejudicial because the new 45 00:03:08,080 --> 00:03:11,120 Speaker 1: jury won't hear all the evidence from the first trial. 46 00:03:11,200 --> 00:03:13,720 Speaker 1: It will simply be told that the company has already 47 00:03:13,760 --> 00:03:18,400 Speaker 1: been found responsible for the woman's illness. Is that a 48 00:03:18,440 --> 00:03:22,400 Speaker 1: problem for J and J? Certainly it is, um and 49 00:03:22,480 --> 00:03:26,400 Speaker 1: it will be a ground for their appeal. And usually 50 00:03:26,520 --> 00:03:31,800 Speaker 1: most punitive damages awards are reduced either by the trial 51 00:03:31,960 --> 00:03:36,440 Speaker 1: judge or by the Court of appeals that they will 52 00:03:36,520 --> 00:03:42,320 Speaker 1: knock it down but won't necessarily get rid of it completely. So, uh, 53 00:03:42,320 --> 00:03:45,360 Speaker 1: this would be one basis for Johnson and Johnson to appeal. 54 00:03:45,440 --> 00:03:48,920 Speaker 1: But if there is an award of punitive damages here, 55 00:03:49,360 --> 00:03:53,680 Speaker 1: it certainly gives the plaintiff leverage to try to negotiate 56 00:03:54,320 --> 00:03:58,680 Speaker 1: some type of resolution because you're rolling the dice when 57 00:03:58,800 --> 00:04:00,760 Speaker 1: you go to the court of a eels. You never 58 00:04:00,840 --> 00:04:03,680 Speaker 1: know if the Court of appeals might say, well, this 59 00:04:03,800 --> 00:04:07,840 Speaker 1: is a company that made over fifteen billion dollars last 60 00:04:07,960 --> 00:04:12,120 Speaker 1: year in earnings and therefore a couple hundred million dollars 61 00:04:12,160 --> 00:04:15,400 Speaker 1: is enough to punish them. Peter, I wonder, as I mentioned, 62 00:04:15,440 --> 00:04:20,159 Speaker 1: the jury did not find that Colgate had acted with malice, 63 00:04:20,200 --> 00:04:23,360 Speaker 1: so they're off the hook for punitives and deadlocked. As 64 00:04:23,360 --> 00:04:27,880 Speaker 1: to J and J. Colgate stopped selling talk based products 65 00:04:27,960 --> 00:04:33,800 Speaker 1: in but J and J continues to use TALC. Could 66 00:04:33,839 --> 00:04:38,000 Speaker 1: that have had any part in the jury's decision? Oh, 67 00:04:38,120 --> 00:04:41,279 Speaker 1: it certainly could, And of course the plaintiffs are going 68 00:04:41,360 --> 00:04:44,760 Speaker 1: to try to argue that, or the plaintiff is going 69 00:04:44,800 --> 00:04:47,919 Speaker 1: to try to argue that in this case Johnson and 70 00:04:48,000 --> 00:04:53,479 Speaker 1: Johnson is ignoring scientific evidence and findings in other cases 71 00:04:54,120 --> 00:04:56,679 Speaker 1: that they are liable. Now, they haven't been found liable 72 00:04:56,720 --> 00:05:00,279 Speaker 1: in every case Johnson and Johnson hasn't been found liable 73 00:05:00,320 --> 00:05:03,719 Speaker 1: in every case it's gone to trial. But I think 74 00:05:04,120 --> 00:05:07,599 Speaker 1: what is likely to happen is they're going to present 75 00:05:07,960 --> 00:05:11,839 Speaker 1: at least some of their scientific evidence again and then say, look, 76 00:05:11,920 --> 00:05:16,839 Speaker 1: Johnson and Johnson is ignoring a real threat here unlike Colgate, 77 00:05:17,000 --> 00:05:23,159 Speaker 1: and therefore hold them responsible and send a message. And 78 00:05:23,320 --> 00:05:27,680 Speaker 1: that's what punitive damages are. It's designed to punish the 79 00:05:27,839 --> 00:05:32,719 Speaker 1: defendant and so it's a it's not a criminal finding, 80 00:05:32,839 --> 00:05:37,320 Speaker 1: but it has some of the overtones of a criminal finding, 81 00:05:37,400 --> 00:05:41,560 Speaker 1: saying you simply ignored what you should have been doing, 82 00:05:41,800 --> 00:05:45,360 Speaker 1: which is protect the safety of consumers of your products. 83 00:05:45,400 --> 00:05:47,600 Speaker 1: So J and J is still facing more than four 84 00:05:47,960 --> 00:05:52,640 Speaker 1: thousand claims over its TOE products, but as you mentioned, 85 00:05:52,760 --> 00:05:56,280 Speaker 1: the record has been mixed. It's one sum loss sum 86 00:05:56,400 --> 00:05:59,280 Speaker 1: settled some Does that make it more difficult for the 87 00:05:59,320 --> 00:06:03,200 Speaker 1: company to decide what to do going forward, whether they 88 00:06:03,240 --> 00:06:07,520 Speaker 1: have a universal settlement of sorts? Certainly it does. I mean, 89 00:06:07,960 --> 00:06:10,479 Speaker 1: the best thing for Johnson and Johnson would be to 90 00:06:10,560 --> 00:06:13,400 Speaker 1: come up with a way to get all of these 91 00:06:13,440 --> 00:06:18,400 Speaker 1: cases settled, but that could run into certainly into the 92 00:06:18,440 --> 00:06:22,200 Speaker 1: hundreds of millions and maybe into the billions of dollars, 93 00:06:22,360 --> 00:06:27,440 Speaker 1: And so they may decide to keep fighting and hope 94 00:06:27,440 --> 00:06:30,280 Speaker 1: they can build up enough of a record where they 95 00:06:30,320 --> 00:06:34,120 Speaker 1: get winds and trials that it will discourage at least 96 00:06:34,120 --> 00:06:37,400 Speaker 1: some of the plaintiffs. But if you hear of about 97 00:06:37,400 --> 00:06:41,200 Speaker 1: a major punitive damages award in a case, then you 98 00:06:41,240 --> 00:06:45,919 Speaker 1: know the plaintiffs lawyers are going to swarm and I think, well, 99 00:06:46,000 --> 00:06:49,640 Speaker 1: maybe I can get a slice of that exact same pie, 100 00:06:49,800 --> 00:06:52,320 Speaker 1: and so it's not going to be easy for Johnson 101 00:06:52,320 --> 00:06:54,240 Speaker 1: and Johnson to get out of all these cases. I 102 00:06:54,279 --> 00:06:59,919 Speaker 1: mean over ten thousand cases means that's spread across the country. 103 00:07:00,040 --> 00:07:03,480 Speaker 1: That's not an easy way to come up with a settlement. 104 00:07:04,240 --> 00:07:06,880 Speaker 1: And they do gain a little bit of an advantage 105 00:07:06,920 --> 00:07:10,800 Speaker 1: because eleven thousand of the cases are filed in federal courts, 106 00:07:10,840 --> 00:07:15,600 Speaker 1: but they've been consolidated for pre trial information exchanges. A 107 00:07:15,640 --> 00:07:20,000 Speaker 1: slight advantage. I guess you know it by by bringing 108 00:07:20,000 --> 00:07:23,800 Speaker 1: the cases together. It's certainly uh, let's Johnson and Johnson 109 00:07:24,440 --> 00:07:28,440 Speaker 1: um deal with them as one. But you know, once 110 00:07:28,440 --> 00:07:31,080 Speaker 1: they're brought together, this is where Johnson and Johnson can 111 00:07:31,080 --> 00:07:34,440 Speaker 1: start to look for some type of global settlement. But 112 00:07:35,480 --> 00:07:38,200 Speaker 1: they've got to figure out what that dollar figure is 113 00:07:38,240 --> 00:07:40,760 Speaker 1: and that's not going to be easy to figure out. Right. 114 00:07:40,760 --> 00:07:43,080 Speaker 1: Thank you so much as always, Peter. That's Peter Handing, 115 00:07:43,120 --> 00:07:47,200 Speaker 1: a professor at Wayne State University Law School. Thanks for 116 00:07:47,280 --> 00:07:50,520 Speaker 1: listening to the Bloomberg Law Podcast. You can subscribe and 117 00:07:50,600 --> 00:07:53,840 Speaker 1: listen to the show on Apple Podcasts, SoundCloud, and on 118 00:07:53,880 --> 00:07:58,640 Speaker 1: Bloomberg dot com slash podcast. I'm June Brasso. This is 119 00:07:58,680 --> 00:08:02,760 Speaker 1: Bloomberg att Dean D.