J&J loses in Louisiana court of appeals, plans further fight

The only thing positive that Johnson & Johnson could take from Friday's decision by a three-judge panel of the Louisiana court of appeals is that a $330 million penalty wasn't increased.

As in several other state cases, J&J's Janssen Pharmaceuticals subsidiary was accused of inappropriately marketing its antipsychotic drug Risperdal through the state's Medicaid program. The Louisiana case, like those in South Carolina, Texas and Pennsylvania, were separate from consumer fraud litigation settled last week between the company and 36 states.

A Louisiana district court jury unanimously decided against Janssen.

How many violations are we talking about in the Louisiana case?

Only 35,542.

State law allowed for a $10,000 penalty for each violation, so it could have been worse for J&J in that way. But at $7,250 per violation, the civil monetary penalty was $257,679,500. Throw in $70,000,000 in attorney fees and $3,000,200 in court costs and current bill is $330,679,700.

Janssen filed 19 objections to the district court result.

The appeals court did not agree with any of them. (This is the Louisiana Third Circuit Court of Appeal, not to be confused with the federal Court of Appeals for the Third Circuit, which is based in Philadelphia.)

When the Louisiana attorney general's office read the Janssen appeal, the state's lawyers filed their own appeal, seeking to have the interest payments on the penalty increased by making the start date for accrual earlier.

On that point, Janssen prevailed. The appeals court judges left the starting date the same.

A link to that opinion is here.

"We are disappointed with the ruling by the Louisiana 3rd Circuit Court of Appeal and intend to file an appeal to the Louisiana Supreme Court," Janssen said in a statement sent via spokeswoman Teresa Mueller.

"We firmly believe Janssen acted responsibly and did not violate the state’s Medical Assistance Programs Integrity Law. As we argued in our appeal to the Third Court, the lower court proceedings in this case were rife with serious, prejudicial errors, such as lack of evidence that a false or fraudulent claim was submitted to the Medicaid program for reimbursement. Among other concerns, the trial court barred our company from offering substantial evidence that supported the scientific opinions that were challenged in the lawsuit."

One more sign of potential litigation that might someday reach the U.S. Supreme Court was that Janssen twice objected on the grounds that its First Amendment right to free speech was violated by the decision, meaning it thought it could promote the drugs more or less as it wanted.

"The central focus of Janssen's argument is that the petitioning action it undertook was protected, so evidence thereof should not have been admitted and should not have been referenced by the Attorney General in his closing arguments," appeals court judge Phyllis M. Keaty wrote in the opinion.

She and her colleagues did not agree.