In Ortho-McNeil-Janssen Pharm., Inc. v. State, ---S.W.3d---, 2014 Ark. 124 (2014), the Arkansas Supreme Court reversed a US$1.2 billion jury verdict against Janssen based on the companies’ alleged improper promotion of its antipsychotic drug Risperdal.

The Court first reversed the circuit court’s denial of Janssen’s motion for a directed verdict on the Arkansas Medicaid Fraud False Claims Act (MFFCA) claim. In reaching this result, the Court considered both the statutory language and legislative history, holding that the MFFCA only applied to statements by healthcare facilities in applying for certification or recertification as described in the statute. Id. at *10-16. The Court determined that the MFFCA did not cover Janssen’s alleged wrongdoing—alleged false statements made in Risperdal’s FDA-approved labeling—and accordingly dismissed the MFFCA claim. Id. at *16.

The Court also reversed the circuit court’s decision on the Arkansas Deceptive Trade Practices Act (DTPA) claim, holding that the key FDA Warning Letter used by the State to prove its DTPA claim was inadmissible hearsay. The Court held that the letter did not fit within the hearsay exception for “Public Records and Reports” under Arkansas Rule of Evidence 803 because that Rule does not permit the admission of factual findings “resulting from special investigation of a particular complaint, case or incident.” The Court accordingly reversed the circuit court’s decision and remanded the DTPA claim back to the circuit court for further proceedings. Id.

The Arkansas Supreme Court’s decision comes on the heels of the Louisiana Supreme Court’s reversal of a US$257 million dollar verdict against Janssen under Louisiana’s Medicaid fraud statute.