Johnson & Johnson is looking to strike a blow to one of the more infamous verdicts in the City of St. Louis. While St. Louis has long had a reputation for plaintiff-friendly decisions, the largest verdict by far was $4.69 billion against Johnson & Johnson for 22 plaintiffs in July 2018.

In the summer of 2020, the verdict was upheld by the Missouri Court of Appeals. On November 3rd, 2020, the Missouri Supreme Court refused to hear an appeal from Johnson & Johnson and Johnson & Johnson Consumer, Inc. in Robert Ingham et al. v. Johnson & Johnson, et al. The courts let stand a state appellate decision which affirmed a $2.2 billion jury verdict against the consumer giant and for women who claimed their ovarian cancer was caused by use of Johnson & Johnson’s talcum powder products.

Johnson & Johnson called the trial verdict “fundamentally flawed” and “at odds with decades of independent scientific evaluations confirming [their products were] safe.” They vowed to appeal the verdict to the Supreme Court.

In March 2021, Johnson & Johnson filed a petition on three issues related to the verdict: whether consolidating 22 plaintiffs into a single case violated due process; whether the punitive damages award was unconstitutional in light of the actual compensatory award; and whether the trial court actually had personal jurisdiction in the case.

The particular issues raised by Johnson & Johnson highlight many of the concerns raised over the years with Plaintiff friendly procedures in St. Louis. Only five of the 22 plaintiffs resided in Missouri. Other than suing the same defendant for the same product, their cases had little in common. These practices have become commonplace in Missouri and are likely to continue without a ruling from the Supreme Court that would change the current litigation climate.

Does Consolidating Cases Violate Due Process?

The first issue raised by Johnson & Johnson on appeal involved the joinder of 22 plaintiffs together into a single consolidated case. There is little question the City of St. Louis has been a favorable forum for plaintiffs’ attorneys looking to consolidate multiple plaintiffs for trial. The Supreme Court has held that individualized determinations regarding injuries must be made for each plaintiff in such a case. See Wal-Mart v. Dukes, 546 U.S. 338 (2011). The problem is illustrated well in Johnson & Johnson’s case, where 22 plaintiffs from 12 states with varying ages were each awarded $25 million in compensatory damages. 

The Missouri appeals court upholding the ruling found that “any dangers of prejudice arising from joinder were adequately addressed by the trial court’s instructions to the jury to consider each Plaintiff’s claim separately.” The jury instructions lasted 12 hours, as they involved the application of multiple states’ laws as applied to the claim by the Missouri trial court. In its brief to the Supreme Court, Johnson & Johnson argues that Missouri’s reliance on individualized jury instructions to cure any juror confusion is inadequate as evidenced by the fact that the jurors treated all plaintiffs similarly in terms of their damages award. “The jury was confronted with 22 different plaintiffs with dramatically different cancer-risk profiles, prognoses, and talc use. The mass trial papered over these differences, allowing the jury to overlook significant weaknesses in individual plaintiffs’ claims-and to infer causation from the number of plaintiffs before it.”

Were the Punitive Damages Constitutional?

The second issued raised by Johnson & Johnson in its appeal to the Supreme Court concerns the issue of punitive damages. At trial, the jury awarded $550 million in compensatory damages, as well as $3.15 billion in punitive damages against Johnson & Johnson and $990 million in punitive damages against Johnson & Johnson Consumer Inc. On appeal, Johnson & Johnson contends that the punitive damage awards violate the federal due process clause, far exceeding the permittable compensatory to punitive damage ratio previously outlined by the Supreme Court.

In 2003, in State Farm Mut. Automobile Ins. Co. v. Campbell, the U.S. Supreme Court reserved a $145 million punitive damages award against State Farm imposed by the state of Utah, finding that such an award—on only $2.4 million in compensatory damages—violated the due process clause of the Fourteenth Amendment. 538 U.S. 408. Though refusing to establish a bright line ratio for punitive damages, the court held that “[s]ingle digit multipliers are more likely to comport with due process.” Id. at 425. 

However, the court also explained that in cases where punitive damages are substantial, “then a lesser ratio, perhaps only equal to compensatory damages (1:1), can reach the outermost limit of the due process guarantee.” Id. Following the State Farm decision, many courts ignored the latter explanation, interpreting the decision to mean that any ratio below 10:1 was permissible. Johnson & Johnson, facing an overall ratio of 11.5:1, argued there are several reasons for the Court to grant cert and review the case.

Clarifying the State Farm Precedent

Johnson & Johnson requested that the Supreme Court provide clarity on the State Farm holding by resolving disputes between lower courts’ decisions. In its brief, Johnson & Johnson outlined varying interpretations of State Farm, ranging from the faithful application of the 1:1 ratio in “substantial” damage cases in five state and federal courts, to some courts even ignoring the 10:1 in certain cases, such as where the Oregon Supreme Court affirmed a punitive damage award 97 times the compensatory damage award.

Although Johnson & Johnson seeks a declaration from the Supreme Court that theirs is the type of case in which a 1:1 ratio is appropriate, even reducing their punitive damage awards from 11.5:1 to 9:1 would save the company hundreds of millions of dollars.

Reevaluating Punitive Damages in Joint and Several Liability Cases

Johnson & Johnson noted that there is even a disagreement on how to calculate the ratio in cases of joint and several liability. In this case, the Missouri Supreme Court halved the ratio because the awards were issued against two defendants by assuming that each defendant will pay the full amount. However, Johnson & Johnson argued that other courts have rejected this approach because it presumed a legal impossibility: that each defendant will ultimately pay the full compensatory damage award, as opposed to only their calculated share. This distinction drastically affects the amount of punitive damages that a defendant is obligated to pay.

If the Supreme Court sought to provide standards in State Farm which would produce predicable punitive damage awards, and reign in forum shopping by plaintiffs, it is clear those results have not followed. Johnson & Johnson believes that their historic verdict is precisely the case to have those standards reevaluated.

Determining Jurisdiction in Light of Ford Motor Co.

Finally, Johnson & Johnson’s third point raises issues with Missouri finding jurisdiction over all the plaintiffs’ claims based on the company’s contract with a vendor to bottle one of its talc products in Missouri. Johnson & Johnson described this theory of jurisdiction as similar to the theory that the Court just unanimously ruled on in Ford Motor Co. v. Montana Eighth Judicial District Court. The question was whether a proximate cause standard or some other test applies to the “arise out of or relate to” prong of specific jurisdiction. 

Johnson & Johnson’s Petition for Writ of Certiorari was filed prior to the Court issuing its ruling in Ford Motor Co. Writing for the Court, Justice Elena Kagan rejected Ford’s “causation only” approach, holding that the connection between the plaintiffs’ claims and Ford’s activities in the forum state is close enough to support specific jurisdiction. In doing so, the Court reaffirmed its landmark ruling in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, et al, which held that to be subject to specific jurisdiction, the plaintiff’s claims “must arise out of or relate to the defendant’s contacts” with the forum.

Focusing on the word “or,” the Court explained that the requirement of a “connection” between a plaintiff’s suit and a defendant’s activities extends beyond causality. More than one state can have specific jurisdiction over a nonresident defendant, particularly one that has a “non-causal affiliation between the forum and the underlying controversy,” i.e., an accident occurring inside the state and that involves a nonresident defendant’s product. Id. Given this recent opinion, it seems very unlikely the Court would hear the case on this final point.

What Happens Next in Johnson & Johnson?

Whether the Supreme Court decides to take up the case remains to be seen. A potential ruling could have far reaching implications for the award of punitive damages and the current trend of consolidating multiple plaintiffs and their claims before a single state court.

Rasmussen Dickey Moore defends product manufacturers in the nation’s toughest, plaintiff-friendly courts, including the City of St. Louis and Madison County in Illinois. When you face claims in challenging jurisdictions, be sure to contact RDM.

The post Johnson & Johnson Appeals Landmark St. Louis Verdict to the U.S. Supreme Court appeared first on RDM | Rasmussen Dickey Moore.