An Illinois jury has issued a verdict compelling Reckitt Benckiser Group Plc's (OTC:RBGLY) (OTC:RBGPF) Mead Johnson to pay $60 million to the mother of a premature infant who tragically succumbed to necrotizing enterocolitis (NEC) after being fed the company's Enfamil baby formula.
The jury found Mead Johnson negligent for failing to warn of the risks associated with NEC, a disease that mostly affects premature newborns, with a mortality rate ranging from 15% to 40%.
The verdict signifies the opening of a legal floodgate, with hundreds of similar lawsuits pending against Mead Johnson and Abbott Laboratories Inc (NYSE:ABT) regarding their infant formulas.
In a statement, Reckitt said, "While we continue to offer our deepest condolences to Ms. Watson, we strongly disagree with the jury's decision to fault Mead Johnson and award damages. We continue to believe that the allegations from the plaintiff's lawyers in this case were not supported by the science or experts in the medical community. This was underscored during the trial by a dozen neonatologists."
Reuters highlighted that over 400 NEC lawsuits against Mead Johnson and Abbott are pending in federal court in Chicago, and others, like Watson's, are in state courts.
Citing the jury, Bloomberg noted, "The jury's finding confirms what Mead Johnson folks already knew – that its formula dramatically increases the NEC risk. This is the first verdict in the US, but won't be the last unless baby formula makers accept responsibility for their misdeeds."
Reuters reported that the NEC lawsuits are distinct from the legal proceedings against Abbott concerning the closure of its Sturgis, Michigan facility and the recall of baby formula batches due to potential contamination.
These actions by Abbott led to a shortage of formula across the United States in 2022.
Price Action: ABT shares are down 4.59% at $113.40 on the last check Friday.
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