Shares of Kenvue Inc. (NYSE:KVUE) fell about 1% on Monday after Bloomberg reported that a federal appeals court revived cases asserting the company concealed alleged risks that Tylenol could contribute to autism in children whose mothers used the product during pregnancy.
The three-judge panel in New York determined a lower court had "exceeded its discretion" by excluding testimony from three expert witnesses, and it sent the litigation back to the lower court for further proceedings. The panel made clear, however, that the lower court was within its rights to block two other experts from testifying.
In 2023, a Manhattan federal judge had prevented 500 cases from moving forward to trial against Kenvue, the company spun out of Johnson & Johnson. Plaintiffs in the suits allege the company concealed alleged risks that the widely used over-the-counter pain reliever posed an increased risk of developmental issues in infants whose mothers took the medication during pregnancy.
The appeals court ruling represents a reversal of part of that earlier decision and opens the door for at least some of the previously stalled claims to proceed. The revival could be a material legal setback for Kenvue, which may now face thousands of new lawsuits tied to the same allegations.
Bloomberg Intelligence offered an assessment in March suggesting that the litigation could carry a price tag in the billions of dollars if settlements are required. The appeals court decision and the potential expansion of litigation follow a sequence of rulings in which lower courts have both curtailed and permitted elements of the plaintiffs' cases.
With the case remanded for additional proceedings, Kenvue will confront renewed legal activity centered on disputed expert testimony and the underlying claims about product risk and disclosure. The company faces uncertainty over the scope and cost of future litigation as plaintiffs seek to advance claims that had been partially blocked in earlier rulings.