The Delaware Supreme Court on January 13, 2026 set aside a portion of a $1 billion damages award against Johnson & Johnson (J&J) that had been imposed by the Delaware Chancery Court in a lawsuit brought by former Auris Health shareholders. The ruling required the lower court to recalculate the damages, effectively reducing J&J’s liability by a few hundred million dollars while leaving the majority of the award intact.
The dispute began when J&J acquired Auris Health in February 2019 for $3.4 billion in cash, with up to $2.35 billion of contingent payments tied to regulatory milestones. Shareholders alleged that J&J breached the merger agreement by failing to prioritize Auris’s iPlatform program and by delaying regulatory approvals. The Chancery Court found that J&J had an implied obligation to secure approval for an iPlatform abdominal procedure by the end of 2021, a finding that underpinned the original $1 billion award. The Supreme Court upheld most of the lower court’s findings but reversed the portion of the award based on the implied regulatory obligation, stating that the parties’ negotiated agreement on milestone requirements should govern.
J&J welcomed the partial reversal, noting that the court had corrected the lower court’s “improper substitution” of its own opinions for the negotiated agreement. The company, however, expressed disappointment that the remainder of the award was upheld. Fortis Advisors, the plaintiffs’ counsel, said the decision confirmed that J&J had “inexcusably violated the merger agreement” and highlighted alleged fraud in the transaction. The remand will force the Chancery Court to recalculate damages in light of the Supreme Court’s guidance, potentially lowering J&J’s exposure further.
The acquisition was intended to accelerate J&J’s entry into digital surgery and robotics, leveraging Auris’s FDA‑cleared Monarch platform and the iPlatform technology. The legal dispute has highlighted the risks of integrating complex regulatory programs after a large acquisition. A reduced damages award eases some financial pressure but underscores the importance of aligning post‑merger integration with contractual milestones and regulatory timelines.
The case will now proceed in the Delaware Chancery Court, where the damages will be recalculated. J&J will likely review its post‑merger integration strategy to mitigate future litigation risk and to ensure compliance with the negotiated milestone framework. The outcome will influence how the company manages similar acquisitions and the structuring of future merger agreements.
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