Citing the infamous 'phantom recall' episode, the Oregon attorney general has filed a lawsuit against Johnson & Johnson for putting consumers at risk. At issue is the decision by J&J's McNeil Consumer Healthcare unit to hire a private contractor to quietly remove defective Motrin bottles from store shelves while maintaining the FDA sanctioned the action (back story).
"Companies that break the rules and put consumers at risk will be held accountable," said Oregon attorney general John Kroger says in a statement. He noted that, in July 2009, one of the contract employees in Oregon became concerned about the secrecy of the recall and contacted the Oregon Board of Pharmacy, which notified the FDA. You may recall that J&J did not announce an official recall until February 2010 (here is the lawsuit).
This is only the latest in a string of troubles facing J&J, which faces numerous investigations and lawsuits. Here is a laundry list of product recalls and FDA inspections. And here is a shareholder derivative lawsuit that attempts to put the recalls in the context of wider managerial problems.