Supreme Court Rules Johnson & Johnson Must Pay $2.1 Billion in Baby Powder Lawsuit

The Supreme Court has effectively upheld a ruling that Johnson & Johnson (NYSE: JNJ) must pay a significant award to a group of women in a high-profile lawsuit. The court chose not to consider the company's objections to the ruling, leaving Johnson & Johnson obligated to pay $2.1 billion.

The lawsuit concerned the company's baby powder, which the plaintiffs alleged was contaminated with carcinogenic asbestos. A jury in St. Louis found in favor of the petitioners, who were ultimately awarded that $2.1 billion as a group. The amount is the sixth-largest award in the history of the American legal system.

Gavel atop a pile of money

Image source: Getty Images.

While this is a stinging legal defeat for Johnson & Johnson, the company has planned for its financial impact. In February, it announced it was setting aside a "litigation expense" of $3.9 billion to fund the compensatory damages.

The company must contend with a raft of other cases related to its baby powder; it said in that February announcement that it faces thousands more lawsuits from onetime users of the product. In an article on the Supreme Court decision published Tuesday, Bloomberg said the number of those cases exceeds 26,000.

In a statement quoted by the news agency, Johnson & Johnson spokeswoman Kim Montagnino wrote about the Supreme Court's move that "The decision by the court to not review the case leaves unresolved significant legal questions that state and federal courts will continue to face."

She added, "The Supreme Court has many times said its decision to deny hearing a case expresses no view on the merits [of a case]."

On Tuesday, Johnson & Johnson stock fell by 2.2%, while the S&P 500 index essentially traded sideways.

10 stocks we like better than Johnson & Johnson
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Johnson & Johnson wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of May 11, 2021

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More