J&J argues that its shareholders are attempting to rehash decades-old allegations, but the proposed class said that the company failed to actually respond to most of the alleged misstatements in that filing. According to Law360, “The [complaint] sets forth each alleged misrepresentation and omission, which of the defendants made each statement, the date of each statement and the reasons each statement was false and misleading,” the investors said. “Nothing more is required. Notably, defendants fail to challenge many of the misstatements, conceding their falsity.”
Shareholder Frank Hall filed the putative class action in New Jersey federal court claiming that J&J harmed its stockholders by concealing the truth underlying lawsuits and articles contending that J&J’s talcum powder products contain asbestos. According to the complaint, J&J knew for decades that its talc products, namely Johnson’s Baby Powder, contain asbestos fibers and that exposure to J&J’s talc can cause mesothelioma and ovarian cancer. Also, J&J’s revenues from sales of these products were unsustainable due to the dangerous and harmful nature of its talc products. And In the 1990s, J&J outlined a plan to hike flagging sales of its powder “by targeting” black and Hispanic women, according to a company memorandum made public in recent lawsuits against J&J.
Further, by not disclosing this danger, J&J kept its stock price artificially high and harmed shareholders who saw prices drop by more than 5 percent when the media reported the information. The lawsuit cites falls in shares that damaged investors from the following news:
1. On September 21, 2017, Bloomberg published an article titled, “Johnson &Johnson alerted to risk of asbestos in talc in '70s, files show,” stating “documents indicate 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.” Shares of J&J fell $2.28 per share over five consecutive trading days to close at $129.47 per share on September 28, 2017.
2. On February 5, 2018, CNBC published an article titled, “Johnson & Johnson falls on report that lawsuits could expose potentially damaging documents. Shares of J&J fell $7.29 per share or over 5% from its previous closing price to close at $130.39 per share on February 5, 2018,
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positive for asbestos.”
This is a federal securities class action on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired the publicly traded securities of J&J between February 22, 2013 and February 7, 2018. The case is Hall v. Johnson & Johnson et al., case number 3:18-cv-01833, in the U.S. District Court for the District of New Jersey.