Judge denies Abbott request for retrial, lower damages in $500M baby formula case

A judge denied a request by Abbott Laboratories (NYSE:ABT) for a new trial after a St. Louis jury awarded a plaintiff $500 million in an infant formula case in July.

Michael Noble of St. Louis City Circuit Court denied the Abbott (ABT) request for a new trial, according to a court filing late Monday. The judge also dismissed Abbott’s request to reduce the punitive damages awarded by the jury in July.

“…. the Court finds the amount of punitive damages awarded by the jury was not manifestly unjust or disproportionate to the relevant factors presented at the trial,” Judge Noble wrote in his opinion.

A jury in St. Louis awarded a plaintiff $495 million in compensatory and punitive damages in July over claims the company’s baby formula caused a potentially deadly bowel disease.

The judge on Monday also ordered Abbott to post a $598 million appeal bond.

Abbott (ABT) and competitor Reckitt Benckiser’s (OTCPK:RBGPF) Mead Johnson business are facing more than 1,000 lawsuits that allege that the companies failed to warn parents about the NEC risks with cow’s-milk-based products.

The judge’s denials comes after shares of Abbott (ABT) and Reckitt Benckiser (OTCPK:RBGPF) jumped on Nov. 1 after another jury in a separate case in St. Louis found the companies not liable over claims their baby formula caused a potentially deadly illness.

In a note at the time, JPMorgan called the verdict an “unexpected win,” adding that while many investors thought Abbott’s exposure to NEC litigation would be in the $2 billion-$3 billion range, that amount could now be reduced by $500 million-$1 billion.

Shares of Abbott (ABT) ticked lower by 0.3% on Tuesday.