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Philadelphia, PA — July 31, 2025 — In a significant legal development, the 3rd Circuit Court of Appeals has upheld a class certification order in a high-profile talc lawsuit brought by investors against Johnson & Johnson (J&J). The decision reaffirms a 2023 ruling by U.S. District Judge Zahid N. Quraishi, allowing a proposed class of shareholders to proceed with allegations that J&J misled the market by failing to disclose cancer risks associated with its talcum powder products.

The three-judge panel ruled 2-1 in favor of the plaintiffs, concluding that the district court did not err in finding that common issues predominate, particularly around the question of investor reliance in the company’s alleged misrepresentations.

The lawsuit centers on six disclosures that the plaintiffs allege partially corrected J&J’s public statements. According to the appeals court, each disclosure was followed by a drop in J&J’s stock price, with no plausible explanation other than the release of talc-related information — supporting the claim that the market reacted to new, value-relevant data.

Writing for the majority, U.S. Circuit Judge Patty Shwartz stated that J&J had “failed to rebut the presumption of reliance” by not providing sufficient evidence that the alleged misstatements did not impact its stock price.

In a dissenting opinion, Judge Cindy K. Chung argued that the case should be remanded to the lower court for a more detailed analysis of the disclosures, suggesting that not all of them may have contained new or corrective information.

The certified class includes all individuals who purchased or acquired J&J securities between February 22, 2013, and December 13, 2018. The San Diego County Employees Retirement Association has been named lead plaintiff, with Robbins Geller Rudman & Dowd LLP appointed as class counsel.

J&J challenged the certification, claiming the court misapplied standards set by the U.S. Supreme Court’s 2021 decision in Goldman Sachs v. Arkansas Teacher Retirement System, but the 3rd Circuit ultimately rejected the company’s argument.

The case is San Diego County Employees Retirement Association et al. v. Johnson & Johnson et al., case number 24-1409, in the U.S. Court of Appeals for the Third Circuit.