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Johnson & Johnson’s Talc Disclosures Certified As Shareholder Class Action By Judge.

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Johnson & Johnson's Talc Disclosures Certified As Shareholder Class Action By Judge.

(CTN News) – The class action lawsuit against Johnson & Johnson alleging fraudulent concealment of asbestos contamination in its talc products has been given the green light to proceed by a federal judge.

The U.S. District Judge Zahid Quraishi in Trenton, New Jersey, has granted shareholders the ability to collectively pursue their securities fraud claims from Feb. 22, 2013, to Dec. 13, 2018. Despite Johnson & Johnson’s argument for a shorter class period, the judge rejected this and allowed the longer timeframe.

Johnson & Johnson has consistently maintained that its talc products are safe and free from asbestos. In recent times, the company has made a switch to using corn starch instead of talc in its baby powder. However, shareholders’ lawyers have not yet commented on the ruling.

Class actions are often seen as a more efficient and cost-effective way for shareholders to seek compensation. With the longer class period now approved, there is a possibility that the recovery amount for shareholders could be higher.

This ruling marks another development in the ongoing legal battles faced by Johnson & Johnson regarding the safety of its talc products.

J&J’s stock price experienced a decline on six occasions in late 2017 and 2018, as confirmed by events that revealed the company’s concealment of asbestos in its talc products. These events included a jury awarding $4.69 billion to 22 women in July 2018, who claimed that asbestos exposure led to their ovarian cancer.

Additionally, a Reuters report, published five months later, disclosed that J&J had been aware of the asbestos risks for decades. J&J, however, argued that these events did not impact its stock price since they did not provide any new information that contradicted its previous disclosures.

According to Johnson & Johnson, the only new information was that the jury accepted the women’s arguments, and the 56 internal documents mentioned in the Reuters report were already public.

Despite J&J’s stance, Quraishi remained unconvinced and emphasized that the Reuters report offered a meticulous analysis and essential context, presenting more than just repetitive information. Consequently, the release of the report caused a 10% decrease in the company’s share price.

Furthermore, J&J is currently facing over 50,000 lawsuits related to its talc products, and its attempts to limit its liability through bankruptcy have been rejected by the courts.

The ongoing case is Hall v Johnson & Johnson et al, filed in the U.S. District Court, District of New Jersey, under the docket number 18-01833.

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