Here's what families need to know after a landmark $60 million verdict in baby-formula suit

By Zoe Han

Latest verdict against Reckitt offers hope for families whose newborns developed serious intestinal disease after consuming formula, law professor says

One family's $60 million verdict in a baby-formula lawsuit brings hope for other families whose newborns developed digestive diseases, though they're not guaranteed to see the same success.

Thousands of parents sued formula manufacturer Reckitt Benckiser Group (UK:RKT), the maker of Enfamil, after their babies developed necrotizing enterocolitis. The intestinal disease, also known as NEC, has a fatality rate as high as 40% and affects newborns. Thursday's jury verdict was the first major win for a plaintiff whose child consumed baby formula and developed NEC, said Carl Tobias, a University of Richmond law professor.

See also: Enfamil maker vows to fight $60 million baby-formula verdict as stock slides

The jury said Reckitt, which operates the Mead Johnson Nutrition brand, sold its cow-milk formula knowing it could cause this disease to premature babies. Abbott Nutrition, which is part of Abbott Laboratories (ABT), faces nearly 1,000 similar suits surrounding its Similac formula.

Keller Postman, one law firm representing clients whose children were impacted, says on its website that its Enfamil and Similac lawsuits in various states allege the companies falsely claimed their formulas were "medically endorsed" and "nutritionally equivalent" to breast milk.

For plaintiffs in ongoing cases or those considering joining suits, Thursday's win gives "some optimism in pursuing civil litigation against the manufacturers, no matter who the manufacturers are," Tobias told MarketWatch.

Victims of the formula lawsuits were also very young, Tobias said, and therefore could prove sympathetic to juries.

But he also cautioned that wins in other suits aren't a guarantee for plaintiffs, since the latest verdict in Chicago was determined by a jury, and it remains to be seen how other juries react.

There is also uncertainty about how the companies will respond to future suits. Reckitt said Friday that it does not agree with the verdict and will seek to overturn the court ruling, but it's possible that the company could ultimately agree to a broad settlement rather than fight each case individually.

Reckitt did not respond to a MarketWatch request for comment on what the verdict means for other families pursuing suits. In a statement posted to its website, the company said "the allegations from the plaintiff's lawyers in this case were not supported by the science or experts in the medical community."

Reckitt also noted that the case and related ones "exclusively involve products used under the strict supervision of neonatologists in neonatal intensive care units," meaning not those sold in traditional retail outlets.

Abbott didn't respond to a MarketWatch request for comment on the Reckitt verdict and its impact.

It's worth noting that Abbott faces other lawsuits about a 2022 infant-formula shortage tied to contamination in a Michigan facility, but the latest ruling concerned a separate issue.

Families who believe their children developed NEC after consuming Enfamil or Similac formula can still join one of many open lawsuits, said Tobias.

While it can be costly for parents to pursue suits independently, group cases allow them to pool resources, and lawyers may front the costs when representing a large group of plaintiffs, according to Tobias.

-Zoe Han

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03-15-24 2237ET

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