LOS ANGELES/NEW YORK: Facing off against a plaintiffs lawyer for the first time about Johnson & Johnsons Baby Powder, the companys Chief Executive Alex Gorsky earlier this month insisted that the companys iconic brand was safe.
“We unequivocally believe that our talc and our baby powder does not contain asbestos,” Gorsky testified in an Oct. 3 deposition in a case involving a retired Indiana college professor who alleges his cancer was caused by the Baby Powder he used for decades. The deposition has not been previously reported.
Gorsky, citing “thousands of tests and studies” to support his testimony, said: “Im not aware of our baby powder or talc containing asbestos.”
Thats harder for him to say now. Last Wednesday, just 13 days after his deposition, the U.S. Food and Drug Administration told the healthcare giant it had discovered asbestos, a known carcinogen, in a bottle of Johnsons Baby Powder.
On Friday, a day after getting the full FDA test results, J&J recalled 33,000 bottles of Baby Powder in the United States. It marked the first time the company has recalled Baby Powder for possible asbestos contamination and the first time U.S. regulators have announced finding asbestos in the product.
The recall is the latest blow to a healthcare conglomerate that has for many years tried to project an image as a caring company. It is now facing thousands of lawsuits over a variety of products, including legal action by more than 15,000 consumers claiming its talc powders caused their cancers.
Shares in J&J, which in February said it had received subpoenas from the U.S. Justice Department and U.S. Securities and Exchange Commission for documents related to the asbestos contamination allegations, dropped almost 6per cent on Friday after the recall was announced. The inquiries include a criminal grand jury investigation into how forthright J&J has been about the safety of its powders, according to people familiar with the matter.
In the deposition, Gorsky was pressed again and again to say – without qualification – that the companys powders were asbestos free. But in answering questions under oath for the first time in the talc litigation, he stuck to his statement that he “believed” J&Js powders were clean.
The FDA finding will make it much more difficult for Gorsky and the company to continue saying that they "believe" the talc powders are free from asbestos, said Elizabeth Burch, a product liability expert at the University of Georgia School of Law. She said the test result and recall lend credibility to what plaintiffs have been arguing in court for months.
J&J stands behind the safety of its talc and said its investigating the FDA test result. The company said it proceeded with the recall “out of an abundance of caution.”
In a statement on Sunday J&J said: “Thousands of tests over the past 40 years repeatedly confirm that our consumer talc products do not contain asbestos, including prior tests by the FDA as recently as last month.”
In a written response to questions from Reuters on Monday, J&J added that Gorsky had no knowledge of the FDA finding of asbestos at the time of his deposition.
The company also said the FDA notified it on Sept. 20 that a test of its Baby Powder did not find any asbestos. Neither had the regulator detected asbestos during testing in 2010 using the “most sophisticated testing techniques available.”
COULD BE DEPOSED AGAIN
Gorskys testimony echoed statements he made after Reuters on Dec. 14 last year published an investigation that found J&J knew for decades asbestos lurked in its talc.
Internal company records, trial testimony and other evidence show that from at least 1971 to the early 2000s, the companys raw talc and finished powders sometimes tested positive for small amounts of asbestos, the Reuters investigation found. Company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it, while failing to disclose it to regulators or the public.
Jim Kramer, the lawyer who deposed Gorsky this month, said he plans to ask the New York state judge in the case to allow him to question the CEO a second time in light of the FDAs findings and the recall.
J&J declined to comment on the possibility of a second round with Kramer or about its legal strategy following the FDA test result.
Gorsky faces at least one more deposition, this one ordered by a Missouri judge for Baby Powder cancer cases pending in that state. That has yet to be scheduled.
DISCUSSED DROPPING TALC POWDERS
In his daylong videotaped deposition, Gorsky, a former Army Ranger, recounted his efforts to stem the growing controversy over one of the companys signature products.
Sitting at the head of a conference table with the blinds drawn in the midtown Manhattan offices of a mediation firm, he testified that J&J considered dropping talc powders.
“We had discussions internally along the way regarding should we leave … talc on the market or not,” Gorsky said at the deposition.
In the end, however, Gorsky said the company, which also sells Baby Powder made from cornstarch, stuck with talc because it was confident about its safety and because many consumers liked its feel.
“We had the right testing procedures in place and so there was … no medical reason or safety reason to withdraw it,” he testified.
“There were in fact differences between cornstarch and talc-based baby powder in its feel, in its absorbency,” said Gorsky, who has been J&Js CEO since 2012. The company “felt it was important to have different options on the market based upon different consumer needs.”
The plaintiffs lawyer pressed the 59-year-old Gorsky on his use of the word “believe” when asked about asbestos in J&Js talc. “My follow up is,” Kramer said, “can you not answer the question as I've presented it with a yes or a no?”
Gorsky, who said in the deposition he uses Johnsons Baby Powder and had also used it on his son, didnt budge. “I did not personally conduct every single test. I can only … gauge it based upon the data and totality thats been presented to me.”
In its answers to Reuters questions on Monday, the company reiterated that “Mr. Gorsky is not a scientist and did not conduct the tests. He therefore relies on others to advise him.”
Before the FDA test result, Gorskys focus on what he "believed" to be true was helpful to J&J's legal position, said Andrew Bradt, a Berkeley Law professor at the University of California. Many state laws require plaintiffs to prove companies knew a product was defective, and if Gorsky had unequivocally said talc does not contain asbestos then opposing lawyers could seek to undermine his declaration by contrasting it with the results of tests J&J knew about over the years suggesting otherwise.
However, in light of the FDA asbestos discovery, plaintiff lawyers could now make it sound like he was being hesitant in his deposition, Bradt said.
Much of the testimony centered on Gorskys efforts to quell public and investor concerns raised by the Dec. 14 Reuters investigation and a story published hours later in the New York Times. The Reuters report had prompted a stock selloff that erased about US$40 billion from the companys market value in one day.
In the subsequent days, J&J tweeted, posted on Facebook, ran a series of full-page newspaper ads, published a lengthy rebuttal to the Reuters investigation on its website and announced a US$5 billion stocRead More – Source