J&J CEO to testify at trial for first time on Baby Powder risks

[January 27, 2020]  By Michael Erman and Lisa Girion

NEW BRUNSWICK, N.J. (Reuters) - Johnson & Johnson Chief Executive Officer Alex Gorsky was set to be called as a witness on Monday in what would be his first appearance in a jury trial over allegations that the company's Baby Powder causes cancer.

Lawyers for three men and one woman who sued J&J subpoenaed Gorsky in a trial playing out in a state courtroom in New Brunswick, New Jersey near the company's headquarters.

All four have mesothelioma, a rare and incurable cancer that they said was caused by their exposure to asbestos in Baby Powder applied when they were diapered as infants.

During an earlier phase of the trial, the jury held J&J liable for the plaintiffs' cancers and awarded them $37.2 million in compensation. Now their lawyers are seeking to persuade a second jury that J&J's behavior was so reckless that punitive damages are warranted.

J&J fought the subpoena of Gorsky, arguing that he had no first-hand knowledge about the safety of its powders and that the case involves corporate conduct that occurred long before he joined the company in 2012. Compelling his testimony, J&J said in a motion, would set a precedent that could result in other chief executives being hauled to court and "would serve no purpose other than to harass Mr. Gorsky and divert him from his executive responsibilities."

Last week, the New Jersey Supreme Court turned down the company's request to suspend the subpoena, clearing the way for Gorsky to be called to testify.

The stakes are high. J&J faces more than 16,000 lawsuits. They assert that J&J sold powders contaminated with asbestos, a known carcinogen, and failed to warn users. J&J also faces a federal criminal investigation into how forthright it has been about the products' safety.
 

Alex Gorsky, Chairman and CEO of Johnson & Johnson, celebrates the 75th anniversary of his company's listing on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 17, 2019. REUTERS/Brendan McDermid

In October, J&J disclosed that a contract lab for the U.S. Food and Drug Administration had found asbestos in a bottle of Baby Powder produced in 2018. The company questioned the finding and commissioned tests on samples from the same bottle and talc from the same lot. Less than two weeks later, J&J announced those tests had found no contamination, other than some asbestos it attributed to an air conditioner in the lab.

In December 2018, a Reuters report based on J&J documents produced in litigation showed that the company knew small amounts of asbestos had been found in its talc on occasion since 1971. J&J dismissed the Reuters' report as "an absurd conspiracy theory."

Gorsky's road to court began in the days following the publication of that report when he took the lead in company efforts to rebut it. The chief executive attested to the safety and purity of Johnson's Baby Powder in a video posted on the company's website and in an appearance on CNBC's "Mad Money."

"We unequivocally believe that our talc, our Baby Powder, does not contain asbestos," Gorsky told the investment show's host Jim Cramer.

(Reporting by Michael Erman in New Jersey and Lisa Girion in Los Angeles; editing by Grant McCool)

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