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(Bloomberg) -- Abbott Laboratories and Reckitt Benckiser Group Plc shares fell as a judge ordered a new trial after rejecting a verdict that had cleared the companies of liability over claims they hid potential risks of their premature-infant formulas.
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Abbott was down 2.7% at 1:54 p.m. in New York after paring morning losses, while Reckitt’s shares fell as much as 5.6% in London before closing down 1.7%. Both early declines were the biggest in about eight months.
The stock action came after a Missouri state judge on Thursday ruled that the plaintiff — the son of Elizabeth Whitfield, on whose behalf she brought the case — had been denied a fair trial, granting a request for a new one. A jury last year rejected claims that formulas made by Abbott and Reckitt’s Mead Johnson unit caused necrotizing enterocolitis in Whitfield’s son.
In setting aside the verdict, the St. Louis judge ruled that the defendants had repeatedly introduced inadmissible evidence to the jurors. More broadly, he found that “cumulative error,” including improper expert opinions and attacks on the legal system itself, had “weakened the foundation of the judicial process and seriously undermined the confidence in the outcome of this trial.”
Reckitt said the ruling was “at complete odds with the law and the facts” and that the company would appeal it.
“The jury unanimously found, consistent with the scientific consensus, that Mead Johnson was not liable, and nothing the court has now cited justifies disregarding the jury’s determination,” Reckitt said in a statement, adding: “This is not a finding of liability. Should this ruling stand, the plaintiff is entitled only to a new trial.”
Abbott also said it would appeal and that it expected the jury’s verdict to be reinstated. The verdict was “consistent with the consensus of scientists, governmental regulators and the neonatologists who treat these vulnerable patients in intensive care units every day,” the company said in a statement.
Timothy Cronin, a lawyer for Whitfield, said the ruling “speaks for itself” after “an unfair trial for this little boy.”
The case is K.W. v. Mead Johnson & Co. et al., 2222-CC-06214, 22nd Judicial Circuit of Missouri (St. Louis).
--With assistance from Sabrina Willmer and Madison Muller.