Oops! Judge cuts Johnson & Johnson fine
In a mortifying mistake destined to be cited by gleeful math teachers everywhere, an Oklahoma judge acknowledged that he was three decimal places off — mistaking thousands for millions — when he originally calculated the amount Johnson & Johnson should pay for its role in the state’s opioids crisis.
As a result, Judge Thad Balkman announced Friday a new fine, reduced by about $107 million. The total is now $465 million, down from the $572 million he assessed in August.
The miscalculation came when he was assessing various costs to the state to deal with health and law enforcement issues stemming from opioids. In his August order, Balkman listed the yearly price to train Oklahoma birthing hospitals to evaluate infants with opioids in their systems at $107,683,000.
But amount was actually $107,683.
He was alerted to the mistake by lawyers for Johnson & Johnson, whose accountants did what students have always been urged to do. They checked his math. They counted zeros.
“That will be the last time I use that calculator,” Balkman said in an October hearing about the dispute.
The judge’s order Friday is the final decision from last summer’s landmark eightweek trial, the first state trial to determine whether pharmaceutical companies could be held liable for the opioid disaster.
His ruling highlighted two challenges that opioid plaintiffs face: how to calculate the cost of damage wrought by opioids and how to assign blame.
Those questions are at the heart of thousands of opioid lawsuits brought by cities, counties and states nationwide against a much broader swath of drug manufacturers as well as distributors and pharmacy chains. On its face, the revised Johnson & Johnson fine may signal that expectations for a whopping payout may now have to be managed carefully. Even in August, when Balkman arrived at the higher award, the company’s stocks performed well, suggesting that shareholders considered the amount relatively insignificant.
But legal experts cautioned against reading too much into Friday’s order. John Coffee Jr., director of the Center on Corporate Governance at Columbia Law School, said he viewed the Oklahoma case as singular. “It only proved that a lessthanstrong case against the one defendant who did not settle because it felt it could win could still produce a plaintiff ’s victory, although a modest one.”
In contrast, two Ohio counties recently wrested settlements worth $320 million from opioid distributors and manufacturers. The next opioid trial, currently set for March 20, will be brought by New York state and Suffolk and Nassau counties against an array of opioid manufacturers and distributors with deep pockets, including Johnson & Johnson.
Months before the trial, Oklahoma had settled with Purdue Pharma and Teva, an Israelbased manufac
“That will be the last time I use that calculator.”
Judge Thad Balkman in a hearing about the dispute
turer of generic drugs, for a combined $355 million. Johnson & Johnson, which said that its sales of opioids were scarcely 1% of the market, instead chose to fight. In August, Balkman ruled that Oklahoma had proved that the company’s aggressive marketing tactics had an outsize effect on the state’s crisis.