Johnson & Johnson Ordered to Pay $572M for Contributing to the Opioid Crisis in Landmark Ruling
- In a landmark decision, a judge ordered Johnson & Johnson to pay $572 million to the state of Oklahoma for deceptive opioid marketing and for significantly contributing to the opioid crisis.
- This is the first legal battle a pharmaceutical company has lost in relation to the opioid crisis, though attorneys for Johnson & Johnson say they will appeal the decision with the Oklahoma Supreme Court.
- Monday’s decision could provide a precedent for future cases against companies manufacturing opioids, including a consolidated case of nearly 2,000 lawsuits that is set to be heard by a federal judge in Ohio this October.
Johnson & Johnson Loses Lawsuit
Johnson & Johnson became the first pharmaceutical company to lose a legal battle concerning accountability in relation to the opioid crisis after a judge slapped the company with a $572 million bill on Monday.
The case, part of a lawsuit filed by the state of Oklahoma, accused Johnson & Johnson of deceptive marketing that led, in part, to the opioid crisis the nation faces today. Judge Thad Balkman, who presided over the case, sided with the state in his opinion and found that Johnson & Johnson’s practices lead to higher rates of addiction and overdose.
“Those actions compromised the health and safety of thousands of Oklahomans,” Balkman said while announcing his decision in court. “Specifically, defendants caused an opioid crisis that is evidenced by increased rates of addiction, overdose deaths, and neonatal abstinence syndrome in Oklahoma.”
“[Johnson & Johnson] promoted their specific opioids using misleading marketing,” Balkman wrote in his opinion. “Among other things, they sent sales representatives in Oklahoma doctors’ offices to deliver misleading messages, they disseminated misleading pamphlets, coupons, and other printed materials for patients and doctors, and they misleadingly advertised their drugs over the internet.”
While the state had asked for $17.5 billion, Judge Balkman said the state had not provided “sufficient evidence” of costs past the first year of a 30-year plan to cover a wide range of services. That plan includes treatment for victims, emergency care, law enforcement, social services, and other addiction-related needs.
Nonetheless, in a press conference immediately following the verdict, Oklahoma Attorney General Mike Hunter called the decision a “great triumph” for the state.
“What we showed during our seven-week trial and what Judge Balkman confirmed today is what we know now for certain,” Hunter said. “Johnson & Johnson was the kingpin behind the nation’s opioid crisis.”
Meanwhile, an attorney representing Johnson & Johnson blasted the ruling and said the company will appeal the decision to the Oklahoma Supreme Court.
“Today’s decision represents a radical departure from more than a century of case law in this state,” attorney Sabrina Strong said on Monday.
The case, which began in May, had also accused Teva Pharmaceuticals and Purdue Pharma of similar practices, but the companies reached settlement agreements of $85 million and $270 million, respectively, before the trial began.
“Public Nuisance” Laws
The trial was argued under the basis of Oklahoma public nuisance laws, which has never been done against a pharmaceutical company. Generally, public nuisance laws pertain to property disputes, though the laws are broad in Oklahoma and can be applied to health-related issues, as well.
During the trial, the state argued Johnson & Johnson created a public nuisance by spreading false information to everyone from the public to doctors prescribing medicine, fueling the opioid crisis. Part of that included advertising the drugs as “safe and effective,” essentially downplaying the drugs’ addictive qualities.
It also accused Johnson & Johnson of refining a highly-addictive opioid poppy, the raw products of which were later sold to other opioid manufacturers. In fact, through this mechanism, Johnson & Johnson supplies 60 percent of the opioid ingredients used by major opioid manufacturers.
The state also pointed to a wide range of statistics, notably, contending that more than 6,000 Oklahomans have died since 2000 because of opioid-related illnesses. The state also claimed that by 2017, pharmacies were filling an average of 479 opioid prescriptions an hour.
On the defendant side, lawyers for Johnson & Johnson denied any misleading advertising. They also testified that the company shouldn’t be held liable, arguing the opioids were supplied legally and were tightly regulated by the FDA.
“No Oklahoma court has ever done what this court has done today in applying public nuisance law to any commercial activity, let alone the highly-regulated area of prescription medicines,” Strong said. “The decision violates well-established constitutional principles, including due process of law.”
Lawyers also argued that the company only directly sold a relatively small amount of opioids, amounting to about 1% of all opioids sold in the country.
What This Decision Means for Similar Cases
Because of the nature of the case, it is being hailed as a landmark decision, and many believe it could set a precedent for upcoming cases. Not only is Johnson & Johnson being held accountable for the opioid epidemic, but it was also the first pharmaceutical company to have lost in a public nuisance lawsuit.
In October, a federal judge in Cleveland, Ohio will oversee another major lawsuit, this one involving nearly 2,000 cases consolidated under one umbrella. If the plaintiffs are successful, that case could potentially pave the way for more lawsuits in 2020.
In 2017, the White House Council of Economic Advisers published an analysis attributing a cost of $504 billion to the opioid epidemic. Plaintiffs hope these lawsuits can recover those costs to pay for the destruction caused by the opioid crisis.
See what others are saying: (New York Times) (CBS News) (KOCO)
Survey and Census Data Shows Record Number of Americans are Struggling Financially
Americans are choosing not to pursue medical treatment more and more frequently as they encounter money troubles.
A recent federal survey shows that a record number of Americans were worse off financially in 2022 than a year prior.
Coupled with recent census data showing pervasive poverty across much of the country, Americans are forced to make difficult decisions, like foregoing expensive healthcare.
According to a recent Federal Reserve Bureau survey, 35% of adults say they were worse off in 2022 than 2021, which is the highest share ever recorded since the question was raised in 2014.
Additionally, half of adults reported their budget was majorly affected by rising prices across the country, and that number is even higher among minority communities and parents living with their children.
According to recent census data, more than 10% of the counties in the U.S. are experiencing persistent poverty, meaning the area has had a poverty rate of 20% or higher between 1989 and 2019.
16 states report at least 10% of their population living in persistent poverty. But most of the suffering counties were found in the South — which accounts for over half the people living in persistent poverty, despite making up less than 40% of the population.
These financial realities have placed many Americans in the unfortunate situation of choosing between medical treatment and survival. The Federal Reserve study found that the share of Americans who skipped medical treatment because of the cost has drastically increased since 2020.
The reflection of this can be found in the overall health of households in different income brackets. 75% of households with an income of $25,000 or less report being in good health – compared to the 91% of households with $100,000 or more income.
See what others are saying: (Axios) (The Hill) (Federal Reserve)
Montana Governor Signs TikTok Ban
The ban will likely face legal challenges before it is officially enacted next year.
First Statewide Ban of TikTok
Montana became the first state to ban TikTok on Wednesday after Gov. Greg Gianforte (R) signed legislation aimed at protecting “Montanans’ personal and private data from the Chinese Communist Party.”
The ban will go into effect on Jan. 1, 2024, though the law will likely face a handful of legal challenges before that date.
Under the law, citizens of the state will not be held liable for using the app, but companies that offer the app on their platforms, like Apple and Google, will face a $10,000 fine per day of violations. TikTok would also be subject to the hefty daily fine.
Questions remain about how tech companies will practically enforce this law. During a hearing earlier this year, a representative from TechNet said that these platforms don’t have the ability to “geofence” apps by state.
Roger Entner, an analyst at Recon Analytics, told the Associated Press that app stores could have the capability to enforce the restriction, but it would be difficult to carry out and there would be a variety of loopholes by tools like VPNs.
Montana’s law comes as U.S. politicians have taken aim at TikTok over its alleged ties to the CCP. Earlier this year, the White House directed federal agencies to remove TikTok from government devices. Conservatives, in particular, have been increasingly working to restrict the app.
“The Chinese Communist Party using TikTok to spy on Americans, violate their privacy, and collect their personal, private, and sensitive information is well-documented,” Gov. Gianforte said in a Wednesday statement.
Criticism of Montana Law
TikTok, however, has repeatedly denied that it gives user data to the government. The company released a statement claiming Montana’s law “infringes on the First Amendment rights of the people” in the state.
“We want to reassure Montanans that they can continue using TikTok to express themselves, earn a living, and find community as we continue working to defend the rights of our users inside and outside of Montana,” the company said.
The American Civil Liberties Union condemned Montana’s law for similar reasons.
“This law tramples on our free speech rights under the guise of national security and lays the groundwork for excessive government control over the internet,” the ACLU tweeted. “Elected officials do not have the right to selectively censor entire social media apps based on their country of origin.”
Per the AP, there are 200,000 TikTok users in Montana, and another 6,000 businesses use the platform as well. Lawsuits are expected to be filed against the law in the near future.
See what others are saying: (Associated Press) (Fast Company) (CBS News)
How a Disney-Loving Former Youth Pastor Landed on The FBI’s “Most Wanted” List
“Do what is best, not for yourself, for once. Think about everyone else,” Chris Burns’ 19-year-old son pleaded to his father via The Daily Beast.
Multi-Million Dollar Scheme
Former youth pastor turned financial advisor Chris Burns remains at large since going on the run in September of 2020 to avoid a Securities Exchange Commission investigation into his businesses.
Despite his fugitive status, the Justice Department recently indicted Burns with several more charges on top of the $12 million default judgment he received from the SEC.
Burns allegedly sold false promissory notes to investors across Georgia, North Carolina, and Florida. The SEC claims he told the investors they were participating in a “peer to peer” lending program where businesses that needed capital would borrow money and then repay it with interest as high as 20%. Burns allegedly also reassured investors that the businesses had collateral so the investment was low-risk.
The SEC says that Burns instead took that money for personal use.
Burns began his adult life as a youth pastor back in 2007 before transitioning into financial planning a few years later. By 2017, he launched his own radio show, The Chris Burns Show, which was funded by one of his companies, Dynamic Money – where every week Burns would “unpack how this week’s headlines practically impact your life, wallet, and future,” according to the description. He also frequently appeared on television and online, talking about finances and politics.
The SEC alleges that he used his public appearances to elevate his status as a financial advisor and maximize his reach to investors.
His family told The Daily Beast that he became obsessed with success and he reportedly bought hand-made clothes, a million-dollar lakehouse, a boat, several cars, and took his family on several trips to Disney World. His eldest son and wife said that Burns was paying thousands of dollars a day for VIP tours and once paid for the neighbors to come along.
Then in September 2020, he reportedly told his wife that he was being investigated by the Securities Exchange Commission but he told her not to worry.
The day that he was supposed to turn over his business documents to the SEC, he disappeared, telling his wife he was just going to take a trip to North Carolina to tell his parents about the investigation. Then, the car was found abandoned in a parking lot with several cashier’s checks totaling $78,000
FBI’s Most Wanted
The default judgment in the SEC complaint orders Burns, if he’s ever found, to pay $12 million to his victims, as well as over $650,000 in a civil penalty. Additionally, a federal criminal complaint charged him with mail fraud. Burns is currently on the FBI’s Most Wanted list.
Last week, the Justice Department indicted him on several other charges including 10 counts of wire fraud and two counts of mail fraud.
“Burns is charged for allegedly stealing millions of dollars from clients in an illegal investment fraud scheme,” Keri Farley, Special Agent in Charge of FBI Atlanta, said in a statement to The Daily Beast. “Financial crimes of this nature can cause significant disruptions to the lives of those who are victimized, and the FBI is dedicated to holding these criminals accountable.”
His family maintains that they knew nothing of Burns’ schemes. His wife reportedly returned over $300,000 that he had given to her.
She and their eldest son, who is now 19, told The Daily Beast they just want Burns to turn himself in, take responsibility for his actions, and try to help the people he hurt.
“Do what is best, not for yourself, for once. Think about everyone else,” Burns’ son said in a message to his father via The Daily Beast.