Delaware top court trims J&J $1B Auris damages
Johnson & Johnson won a partial victory in Delaware’s Supreme Court on Monday, which overturned part of a $1 billion damages award linked to its 2019 acquisition of surgical robotics firm Auris Health.
The unanimous ruling sets aside part of a September 2024 award to former Auris shareholders, who claimed J&J failed to support Auris’ iPlatform technology and was too slow in securing regulatory approvals to bring devices to market. The recalculation of damages, including interest, could reduce the payout by hundreds of millions of dollars, News.Az reports, citing Reuters.
Shareholders, represented by Fortis Advisors, argued that J&J fraudulently structured milestone-based payments instead of paying more upfront. The deal valued Auris at $3.4 billion.
In its 87-page decision, Delaware’s Supreme Court rejected the lower court’s finding that J&J had an implied obligation to secure regulatory approval for an iPlatform product by the end of 2021. However, most of the original court’s findings were upheld, and damages must now be recalculated.
Johnson & Johnson said it is reviewing next steps. “We are pleased the court reversed the trial court’s improper substitution of its subjective views for the parties’ negotiated milestone requirements,” the company said, while expressing disappointment that the remainder of the trial court’s decision was left intact.
Fortis lawyer Philippe Selendy said the ruling highlighted J&J’s “inexcusable breach” of the merger agreement, which delayed Auris’ life-saving surgical robots and involved separate claims of fraud.
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