Judge imposes $4.5M fine on Johnson & Johnson

WELLSBURG – Circuit Judge Martin Gaughan has imposed a penalty of nearly $4.5 million on drug maker Johnson & Johnson for false and misleading promotion of antipsychotic drug Risperdal and painkiller Duragesic.

Gaughan found 4,450 separate violations of West Virginia consumer fraud law.

He imposed the maximum $5,000 penalty on 400 Risperdal sales calls and 100 Duragesic sales calls. He imposed $500 penalties on 3,900 Risperdal sales letters and 50 Duragesic file cards. That totals $4,475,000.

Johnson & Johnson might have celebrated, for Attorney General Darrell McGraw originally sought more than $20 million.

Instead the company served notice that it would appeal.

McGraw sued Johnson & Johnson in 2004 in Brooke County, claiming it didn't tell customers that Risperdal increased the risk of diabetes.

Chief Deputy AG Fran Hughes signed the complaint. She appointed then-law partners Teresa Toriseva and Barry Hill of Wheeling as special assistants.

Hill amended the complaint to add a claim that Johnson & Johnson concealed the addiction risk of Duragesic.

Rebecca Betts of Charleston answered for Johnson & Johnson that contingency fees for Toriseva and Hill would violate due process.

Hughes replied that Johnson & Johnson would suffer no harm from the fee arrangement and lacked standing to challenge it.

Last year Gaughan set the stage for trial by denying summary judgment to Johnson & Johnson and finding its promotions false and misleading.

At trial in September, Johnson & Johnson proposed to count the Risperdal letters as a single violation.

The company continued to deny that it misled anyone, but Gaughan had made up his mind and didn't appreciate the argument.

In a Feb. 25 order, he wrote that Johnson & Johnson still didn't accept that their promotions were false and misleading.

He rejected its claim that it wasn't conscious of wrongdoing.

"A mass marketing campaign should not be counted as merely one violation as the deterrent effect of a $5,000 civil penalty is minimal," he wrote. "Defendants directly disobeyed a direct Food and Drug Administration mandate to include diabetes warning language within its Risperdal promotional materials."

Hill represented the state at trial. He and Toriseva no longer work together.

Toriseva sent a letter to Gaughan on March 2, claiming a portion of the fees.

Gaughan can't do anything about it, for on March 30 he granted a joint motion to stay post trial proceedings pending appeal to the West Virginia Supreme Court of Appeals.

Johnson & Johnson's insurer, Federal Insurance, posted a $5,414,750 appeal bond.