Case

Running Head: WEEK 4 CASE ANALYSIS 1

McDonald v. Johnson & Johnson

Parties:

The plaintiffs in this case are Stanley McDonald, Norman Hagfors, and Clayton Jensen and the defendant is Johnson & Johnson.

Facts:

StimTech is a corporation that manufactures TENS. TENS a device that was created to treat pain by sending electric into the body. Owners of StimTech into contract with Johnson & Johnson and believe that Johnson & Johnson never intended to not only put full resources by also acted in bad faith.

Procedure:

After the jury trial in this case, the original district court’s ruling awarded $5.7 million for breach of contract, $6.275 million for fraud, and $25 million in punitive damages. On appeal, the awards were sustained except that of the $25 million in punitive damages which was remanded for a new trial. Also on the appeal, Johnson & Johnson requested a review of the award for the fraud charges. After review, the charges of fraud were remanded for a new trial. Johnson & Johnson tried to block the fraud charges from being heard at the new trial but the motion was dismissed. The punitive award and the fraud charges were both to be heard at a new trial.

Before the new trial was to begin, the plaintiffs motioned to seek clarification on whether their collection on the breach of contract award would negate their fraud claim. It was determined by the judge that the fraud claim would still be valid. The plaintiffs collected on their award of $5.7 million for the breach of contract judgment. Johnson & Johnson attempted to avoid the new trial on the fraud charges by motioning for a summary judgment. That motion was denied.

Issues:

Main issue would be if Johnson & Johnson entered into contract knowing they were not going to fulfill their part of the agreement which would establish a breach of contract. Entering into a fraud and contract. Was Johnson & Johnson intentionally trying to force StimTech into selling by not putting full resources of Johnson & Johnson behind StimTech? Did Johnson & Johnson only partner with StimTrch to prevent TENS devise from competing with Tylenol.

Laws:

Holding:

The court held that even though the plaintiffs collected the damage award on the breach of contract verdict, the fraud claim was still valid. The punitive damage award and fraud claim was remanded for a new trial.

Reasoning: