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Speaker 1: The fourth largest jury award of the year, has been erased.

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Speaker 1: A California judge throughout a four hundred seventeen million dollar

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Speaker 1: talk powder verdict against Johnson and Johnson last Friday, just

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Speaker 1: three days after a Missouri appeals court overturned a seventy

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Speaker 1: two million dollar talk powder verdict. These rulings add momentum

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Speaker 1: to J and Jay's defense against thousands of other cases

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Speaker 1: brought by women who claimed the company's talcum powder caused

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Speaker 1: their ovarian cancer. Joining us to discuss these reversals and

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Speaker 1: their impact are Eric Gordon, a professor at the University

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Speaker 1: of Michigan Ross School of Business, and Howard Erickson, a

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Speaker 1: professor at Fordham University Law School. Howard, the California judge,

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Speaker 1: tossed out the verdict on several grounds explain what they were. Yeah.

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Speaker 1: The judge not only granted a new trial, the judge

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Speaker 1: actually granted judgment as a matter of law in favor

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Speaker 1: of Johnson and Johnson, meaning the judge decided that the

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Speaker 1: evidence was not there to support the plaintiff verdict. The

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Speaker 1: first and probably most important ground, as if the judge

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Speaker 1: said the plaintiff failed to meet the burden of proof

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Speaker 1: on causation that the plaintiff could not prove that it's

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Speaker 1: more likely than not that J and J talcom powder

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Speaker 1: caused the plaintiffs overian cancer UM. The judge also said

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Speaker 1: that there was no evidence to support the punitive damages

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Speaker 1: award because there was not evidence to support a finding

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Speaker 1: of malice on the part of the defendant. And the

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Speaker 1: judge also said that UM that J and J, as

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Speaker 1: opposed to its consumer products subsidiary, had no duty to

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Speaker 1: warn because until UM, since nineteen sixty seven, J and J,

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Speaker 1: the parent company, was not the manufacturer of the product. So, Eric,

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Speaker 1: if the judge found all these things, why did she

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Speaker 1: even let the case go the jury? You know, that's

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Speaker 1: a question that has always mystified me. I think judges

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Speaker 1: tend to want the jury to come to the right

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Speaker 1: answer itself. Um. You know, the judge takes on quite

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Speaker 1: a burden when she says, I'm stopping the case. You win,

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Speaker 1: So you know, it's it's a bald judge who will

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Speaker 1: do that. But in this case did it? I think

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Speaker 1: because for the for the reasons Howard mentioned, and and

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Speaker 1: also uh, there was some evidence that the jurors themselves

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Speaker 1: acted well, they didn't act like jurors are supposed to act.

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Speaker 1: So how big is this, Howard, I mean, how big

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Speaker 1: a victory is this for J and J. It's it's enormous.

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Speaker 1: And so at the at the opening of the segment

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Speaker 1: you mentioned, you know, they got this four hundred and

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Speaker 1: seventeen million dollar verdict thrown out, and a few days

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Speaker 1: earlier in Missouri they got a seventy two million dollar

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Speaker 1: verdict thrown out on appeal. And one is tempted to think, wow,

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Speaker 1: five hundred million dollars, that's that's no longer sitting there.

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Speaker 1: But that's really not the story because those numbers, especially

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Speaker 1: the four hundred and seventeen million, that number was never

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Speaker 1: gonna gonna stand up as the damages amount in this case.

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Speaker 1: The really big deal is that in Missouri, the court

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Speaker 1: founds that there's no personal jurisdiction over the non Missouri claims.

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Speaker 1: And in California, Judge Nelson, who is overseeing the California

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Speaker 1: Consolidated proceedings, has shown that she is really skeptical about

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Speaker 1: the science supporting the plaintiffs claims UM and that's an

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Speaker 1: enormous deal. Help my my question, Eric, is about it's

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Speaker 1: it's one judge saying I don't see the science here.

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Speaker 1: Does that one judge in California carry to a judge

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Speaker 1: in New York who may hear a case or in

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Speaker 1: another state. So a judge in New York or anywhere.

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Speaker 1: But actually, actually this district in California is not required

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Speaker 1: to follow what judge Nelson did. This is a case

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Speaker 1: in the Superior Court to the State of California. They

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Speaker 1: have no control over other judges. But it has informally

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Speaker 1: um as as Howard was hinting at, informally, it will

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Speaker 1: have a lot of weight because one, you know, this

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Speaker 1: is a court in Los Angeles, this is a court.

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Speaker 1: You know, that's a pretty sophisticated courtroom. And her language

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Speaker 1: was was pretty strong. So now if you're a judge

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Speaker 1: in New York, you're in a position of having to say, well,

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Speaker 1: I I just don't see it that way. I see

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Speaker 1: it completely differently. You have the right to say that,

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Speaker 1: but you've got to have an awful strong conviction to

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Speaker 1: come out and say that. So it doesn't have what

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Speaker 1: the lawyers call presidential effect in any formal sense, but

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Speaker 1: in a practical sense, it sure does, and it's going

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Speaker 1: to change the if they're going to be settlement negotiations.

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Speaker 1: It's changed the balance of power in any of those negotiations. Howard,

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Speaker 1: let's go to the Missouri cases for a moment and

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Speaker 1: tell us about the reasoning the Missouri appeals court and

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Speaker 1: the effect that has on the cases there. What's the

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Speaker 1: Missouri court set is is that the Missouri state courts

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Speaker 1: has no personal jurisdiction over Johnson and Johnson. That is,

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Speaker 1: they have no power to bind Johnson and Johnson if

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Speaker 1: the case does not arise out of some contact that

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Speaker 1: the company had with Missouri. So what that means as

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Speaker 1: a practical matter is Missouri plaintiffs will be able to

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Speaker 1: sue J and J in Missouri, but California plaintiffs and

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Speaker 1: Alabama plaintiffs and New York plaintiffs will not. They they

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Speaker 1: either have to sue J and J in the company's

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Speaker 1: home state of of New Jersey, or they can file

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Speaker 1: it in their own home states or some other state

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Speaker 1: that has a relationship to the claim. And this all

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Speaker 1: flowed from from a U. S. Supreme Court decision a

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Speaker 1: couple of months ago in the Bristol Myers Squib case.

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Speaker 1: And why did they sue in Missouri Howard in about ends,

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Speaker 1: Missouri became the magnet jurisdiction for plaintiffs in the talk litigation.

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Speaker 1: It's not uncommon for plaintiff lawyers to decide that a

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Speaker 1: particular court has either attractive jury demographics or or judges

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Speaker 1: or court rulings that make them more likely to win

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Speaker 1: and more likely to win big. I've been talking with

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Speaker 1: Howard Ericson, a professor at Fordham University Law School, and

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Speaker 1: Eric Gordon, professor at the University of Michigan Ross School

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Speaker 1: of Business, about two verdicts against Johnson and Johnson being

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Speaker 1: thrown out in less than a week, and those verdicts

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Speaker 1: relate to talk powder cases where women claim that the

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Speaker 1: company's talcum powder caused their ovarian cancer. Eric so, J

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Speaker 1: and Jay seems to be winning at the appellate level,

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Speaker 1: but when the cases go before a jury, they're losing.

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Speaker 1: What does that tell you? It tells you that when

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Speaker 1: you go into the jurors and you tell a story

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Speaker 1: about a really unfortunate woman who died of cancer, that

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Speaker 1: the jurors are going to try to find a way

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Speaker 1: to do something about it, especially when the other company

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Speaker 1: is a big company. So there's a there's a lot

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Speaker 1: of emotion. Uh, and when you get to the appeals court.

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Speaker 1: Appeals courts exist for a number of reasons, and one

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Speaker 1: of the reasons is to get away from the emotion

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Speaker 1: and back to the law. So I think this is

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Speaker 1: a pattern we will continue to see. Howard, both sides,

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Speaker 1: both the plaintiff in the California case and the plaintiff

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Speaker 1: in the Missouri case that we've been talking about, have

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Speaker 1: said that they're going to appeal the verdicts. What are

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Speaker 1: their chances on appeal? Well, broadly yes, In Missouri, the

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Speaker 1: decision was already from an intermediate court of appeals. The

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Speaker 1: plants can can try to take it higher. I'd be

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Speaker 1: surprised if they were successful at getting the jurisdictional decision

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Speaker 1: overturned in Missouri. Um, as far as the California decision

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Speaker 1: is concerned, there there are two different aspects to it.

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Speaker 1: There was the judges grant of judgment notwithstanding the verdict

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Speaker 1: that might get reversed on appeal. But then there was

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Speaker 1: the judges grant of a new trial, and that's going

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Speaker 1: to be much harder to overturn on appeal. And when

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Speaker 1: you think about it, the reason the judge decides both

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Speaker 1: of those. So is is precisely to account for the

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Speaker 1: possibility that the judgment, notwithstanding the verdict will be overturned,

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Speaker 1: will be reversed on appeal. So if if the judge's

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Speaker 1: decision gets reversed on appeal, that uh that as a

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Speaker 1: matter of law Johnson Johnson wins, then the judges ruling

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Speaker 1: is still in place that there ought to be a

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Speaker 1: new trial. And since that's a discretionary ruling and there

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Speaker 1: were a number of grounds that the judge gave for it,

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Speaker 1: it's going to be much harder to reverse that. Eric,

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Speaker 1: Where does this leave the more than fifty five hundred

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Speaker 1: tow claims in state and federal courts in the US?

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Speaker 1: Are they going to keep going forward with them? Oh?

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Speaker 1: They're going to keep soldiering on. It takes more than

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Speaker 1: a case like this to stop it. A lot of

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Speaker 1: money has been invested in pursuing those cases. There are

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Speaker 1: people who have suffered. So you know, this is a

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Speaker 1: This is a victory for J and J in what's

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Speaker 1: going to be a long, long set of battles. Howard,

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Speaker 1: if you're the plaintiff's attorneys and this, what are you

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Speaker 1: thinking now? Is there a change of strategy that you

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Speaker 1: could employ. Well, it's it's all about the science. I mean,

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Speaker 1: so it's all about trying to marshal the scientific evidence

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Speaker 1: as as powerfully as possible. And I think the plaintiffs

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Speaker 1: have to and will keep trying to do that. I'm

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Speaker 1: not sure there's so much changes the strategy for the

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Speaker 1: lawyers who are in and I agree with Eric, some

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Speaker 1: of them are likely to be in it for the

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Speaker 1: long haul. What it does change is the thinking by

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Speaker 1: other lawyers who might be trying to decide whether this

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Speaker 1: type of this sort of litigation is worth investing in,

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Speaker 1: worth jumping into. And these kinds of victories for the

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Speaker 1: defendant um have to make this much less appealing prospect.

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Speaker 1: And of course that's what what any mass work defendant hopes. Eric.

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Speaker 1: Have there been any smoking guns in these cases? You know,

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Speaker 1: they had maybe a wet water pistol. They tried to

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Speaker 1: make much of a couple of internal documents. Hasn't hasn't

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Speaker 1: really worked, and they have a big problem. Howard points

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Speaker 1: out that the science at the core is a problem,

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Speaker 1: and and here's a big problem. The National Cancer Institute,

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Speaker 1: well respected says on a public way website, the weight

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Speaker 1: of evidence does not support an association between how exposure

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Speaker 1: and an increased risk of ovarian cancer. The fact is there,

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Speaker 1: there's evidence back and forth. But to have clear and

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Speaker 1: convincing evidence, the preponderance of the evidence when statements like

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Speaker 1: that from respected science places are out there, makes the

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Speaker 1: job of the plaintiffs attorneys really hard. How is there

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Speaker 1: any negotiation going on right now or is J and

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Speaker 1: J just holding firm Well. I have no information about

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Speaker 1: what the parties are talking about behind closed doors, or

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Speaker 1: even what they're thinking about. I can tell you that

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Speaker 1: from knowing about the history of mass tort litigation, what

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Speaker 1: often happens is that a number of trials get fought

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Speaker 1: out on an individual basis. A defendant is hoping to

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Speaker 1: make litigation go away by winning victories in court. But

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Speaker 1: at some point, if the defendant loses a number of trials,

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Speaker 1: then then inevitably the defendant at that point would start

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Speaker 1: to think about negotiating eating a global settlement by talking

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Speaker 1: to some of the leading plaintiffs lawyers in litigation. It

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Speaker 1: remains to be seen whether that's where this is heading. Eric,

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Speaker 1: does the arc of this litigation remind you of any

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Speaker 1: past litigation? You know? This this happens quite often where

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Speaker 1: you know there's a time, there's a time to negotiate,

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Speaker 1: in a time not to negotiate. So when there's a

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Speaker 1: judgment for four hundred and seventeen million dollars out there,

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Speaker 1: you're at the wrong point in the arc. That's not

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Speaker 1: when Johnson and Johnson is going to sit down. Now

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Speaker 1: they might will the plaintiffs sit down and talk, Well,

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Speaker 1: they might have to take another loss or two. So

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Speaker 1: this is part of sort of the typical back and

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Speaker 1: forth arc that the Howard was referring to. So how

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Speaker 1: are you have cases all over? So we're talking about

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Speaker 1: cases in California and Missouri. Are the plaintiff's attorneys in

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Speaker 1: these cases coordinating? Are they acting together or are they

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Speaker 1: just acting for their own clients interest? Is surely a mix.

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Speaker 1: And the the most intense coordination comes in the federal

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Speaker 1: cases because those are consolidated in what's called multi district litigation.

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Speaker 1: And there is a federal multi district litigation of talk

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Speaker 1: cases pending in the District of New Jersey for Judge Wilson.

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Speaker 1: But that's been quite small. That's really that that is

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Speaker 1: really not where most of the cases um are because

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Speaker 1: the plaintiffs have been choosing to file in state court

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Speaker 1: rather than federal court. Um. So the large groups are

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Speaker 1: of cases have been in Missouri, New Jersey, and California,

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Speaker 1: and both New Jersey and California do have consolidated proceedings

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Speaker 1: which automatically bring things together. But even beyond that, plaintiff

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Speaker 1: lawyers tend to um work together on strategy and the

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Speaker 1: the image of plaintiff's trial lawyers as lone wolves and

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Speaker 1: entrepreneurial spirits. While the entrepreneurial spirit thing is still true, um,

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Speaker 1: but plaintiff flayer have been have been working closely together

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Speaker 1: for for decades now. Eric. How much money goes into

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Speaker 1: these plaintiffs cases? Oh, oh, gosh, tens of millions of dollars.

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Speaker 1: These are these are really expensive cases. And and uh,

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Speaker 1: that's a good thing to bring up, because that's a factor.

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Speaker 1: At some point you have Johnson and Johnson financing its

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Speaker 1: defenses by being well Johnson and Johnson. And at another

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Speaker 1: point you have the plaintiff's lawyers financing the cases anyway

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Speaker 1: they can. So you know, at some point that kind

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Speaker 1: of pushes one side closer to a negotiated settlement maybe

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Speaker 1: than the other side. Howard and have you what does this,

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Speaker 1: the arc of this, or the way this is going

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Speaker 1: remind you of any recent or past litigation. Well, when

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Speaker 1: when it's tempted to think of viox because that's relatively recent,

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Speaker 1: um mass tour litigation meanings of a decade ago. But

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Speaker 1: where um, where there was where there are a number

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Speaker 1: of big plaintiffs winds in the early trials the defendant

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Speaker 1: denied causation had some big winds on specific causation, just

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Speaker 1: like that, But then ultimately the defendant murk turned around

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Speaker 1: and negotiated a huge settlement. UM. I would think that's

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Speaker 1: what the plaintiffs layers are hoping this will look like.

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Speaker 1: But at this stage, the science isn't there, And it's

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Speaker 1: always hard to know at an early stage whether as

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Speaker 1: the science develops, whether it's going to look more like

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Speaker 1: you know, say tobacco or asbestos where you end up

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Speaker 1: with an overwhelming consensus of the harmfulness of the product,

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Speaker 1: or whether it's going to look more like ben deecton

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Speaker 1: or breast implants or certain others where the scientific evidence

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Speaker 1: just seems to get weaker and weaker as the litigation

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Speaker 1: UM goes along. I think this decision on Friday is

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Speaker 1: a hint that um that at least Judge Judge Nelson

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Speaker 1: in California thinks it's more like the latter. I want

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Speaker 1: to thank you both for being on Bloomberg Law and

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Speaker 1: for this discussions fascinating discussion. I had forgotten how many

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Speaker 1: mass torque cases there have been. That's Howard Erickson, he's

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Speaker 1: a professor at Fordham University Law School, and Eric Gordon,

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Speaker 1: a professor at the University of Michigan Ross School of Business.

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Speaker 1: Thanks to both of you.