THE STATE OF SOUTH CAROLINA 

In The Supreme Court 

State of South Carolina ex. rel. Alan Wilson, in his 

capacity as Attorney General of the State of South 

Carolina, Respondent, 

v. 

Ortho-McNeil-Janssen Pharmaceuticals, Inc., f/k/a 

Janssen Pharmaceutical, Inc., and/or Janssen, L.P., and 

Johnson & Johnson, Inc., Defendants, 

of whom Ortho-McNeil-Janssen Pharmaceuticals, Inc. is 

the Appellant. 

Appellate Case No. 2012-206987 

Appeal from Spartanburg County 

Roger L. Couch, Circuit Court Judge 

Opinion No. 27502 

Heard March 21, 2013 – Filed February 25, 2015 

AFFIRMED IN PART, REVERSED IN PART AND 

REMANDED 

Steven W. Hamm and Steven J. Pugh, both of 

Richardson, Plowden & Robinson, PA, of Columbia; C. 

Mitchell Brown, William C. Wood, Jr., A. Mattison 

Bogan, and Miles E. Coleman, all of Nelson Mullins 

Riley & Scarborough, LLP, of Columbia; Edward M. 

Posner and Chanda A. Miller, both of Drinker Biddle & 

Reath, LLP, of Philadelphia, Pennsylvania, for Appellant. 
 

John B. White, Jr., and Donald C. Coggins, Jr., both of 

Harrison, White, Smith & Coggins, PC, of Spartanburg; 

John S. Simmons, of Simmons Law Firm, LLC, of 

Columbia; Attorney General Alan M. Wilson, Deputy 

Attorney General Robert D. Cook, and Assistant Deputy 

Attorney General C. Havird Jones, Jr. all of Columbia; 

Fletcher V. Trammell, Robert W. Cowan, and Elizabeth 

W. Dwyer, all of Bailey Peavy Bailey, of Houston, 

Texas, for Respondent. 

Gray T. Culbreath and Laura W. Jordan, both of Gallivan 

White & Boyd, P.A., of Columbia, for Amicus Curiae, 

The South Carolina Chamber of Commerce. 

JUSTICE KITTREDGE: Appellant Ortho-McNeil-Janssen Pharmaceuticals 

(Janssen) is a pharmaceutical company that manufactures the antipsychotic drug 

Risperdal. Risperdal is among a class of drugs prescribed primarily for the 

treatment of schizophrenia. The Attorney General of South Carolina believed that 

Janssen had violated the South Carolina Unfair Trade Practices Act (SCUTPA)1

 by 

engaging in unfair methods of competition by willfully failing to disclose known 

risks and side effects associated with Risperdal. 

On January 24, 2007, the State and Janssen entered into a tolling agreement 

concerning the statute of limitations. SCUTPA has a three-year statute of 

limitations, as section 39-5-150 of the South Carolina Code provides that "[n]o 

action may be brought under this article more than three years after discovery of 

the unlawful conduct which is the subject of the suit." The State filed its 

Complaint on April 23, 2007, seeking statutory civil penalties against Janssen on 

two claims. The first claim arose from the content of the written material furnished 

by Janssen since 1994 with each Risperdal prescription, the so-called labeling 

claim. The second claim centered on alleged false information contained in a 

November 2003 Janssen-generated letter sent to the South Carolina community of 

prescribing physicians, the so-called Dear Doctor Letter. Because both claims 

arose more than three years prior to January 24, 2007, Janssen pled the statute of 

limitations as a bar to the Complaint. 

1

 S.C. Code Ann. §§ 39-5-10 to -180 (1985 & Supp. 2013). 
 

 

 

The matter proceeded to trial. A jury rendered a liability verdict against Janssen on 

both claims. The trial court rejected Janssen's defenses, including the statute of 

limitations, finding that both claims were timely. The trial court imposed civil 

penalties against Janssen for both claims totaling $327,073,700 based on 553,055 

separate violations of SCUTPA in connection with its deceptive conduct in the 

sales and marketing of Risperdal. 

Janssen appeals. We affirm the liability judgment on the labeling claim but modify 

the judgment to limit the imposition of civil penalties to a period of three years 

from the date of the tolling agreement, which is essentially coextensive with the 

three-year statute of limitations, subject to an additional three months by virtue of 

the time period between the January 24, 2007, tolling agreement and the filing of 

the Complaint on April 23, 2007. We further remit the civil penalties on the 

labeling claim to $34,545,400. We affirm the liability judgment on the DDL 

claim, but remit those civil penalties to $101,480,000. Accordingly, we affirm in 

part, reverse in part, and remand for entry of judgment against Janssen in the 

amount of $136,025,400. 

I. 

FDA Regulatory Process and Background
 

A brief summary of the Food and Drug Administration's (FDA) regulatory 

authority over the pharmaceutical industry and the evolution of antipsychotic drugs 

provides a helpful backdrop to the facts of this case. "In the 1930's, Congress 

became increasingly concerned about unsafe drugs and fraudulent marketing, and 

it enacted the Federal Food, Drug, and Cosmetic Act (FDCA)."2 Wyeth v. Levine, 

555 U.S. 555, 566 (2009) (citation omitted). The FDCA's "most substantial 

innovation was its provision for premarket approval of new drugs." Id. Following 

implementation of the FDCA, the FDA "required every manufacturer to submit a 

new drug application, including reports of investigations and specimens of 

proposed labeling" for regulatory review and approval.3 Id. "Until its application 

2

 The FDCA is codified at 21 U.S.C. §§ 301–399f (2006 & Supp. V 2011). 

3

 Prior to submitting a new drug application to the FDA for approval, the developer 

of the drug must first "gain authorization to conduct clinical trials (tests on 

humans) by submitting an investigational new drug application (IND)." Merck 

KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 196 (2005) (citations omitted). 
 

became effective, a manufacturer was prohibited from distributing a drug." Id. 

FDA regulations require a new drug application to "include all clinical studies, as 

well as preclinical studies related to a drug's efficacy, toxicity, and 

pharmacological properties." Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 

193, 196 (2005) (citing 21 C.F.R. § 314.50(d)(2), (5) (2005)). 

The FDA new drug approval process includes specific procedures through which 

warning labels are drafted, approved, and required to be included in the packaging 

of manufactured drugs. A drug label "must contain a summary of the essential 

scientific information needed for the safe and effective use of the drug," and the 

label "must be informative and accurate and neither promotional in tone nor false 

or misleading in any particular." 21 C.F.R. § 201.56(a)(1)–(2) (2014). Indeed, 

federal regulations set forth detailed requirements as to the content, the formatting, 

and the order of required information about potential risks and the safe and 

effective use of a drug. Id. § 201.57(c) (2014). Specifically, FDA regulations 

require drug labels to include, inter alia: (1) "black box" warnings about serious 

risks that may lead to death or serious injury; (2) contraindications describing any 

situations in which the drug should not be used because the risk of use outweighs 

any possible therapeutic benefit; (3) warnings and precautions about significant 

adverse reactions and other potential safety hazards; and (4) any adverse reactions 

for which there is a basis to believe a causal relationship exists between the drug 

and the occurrence of the adverse event. Id. As these FDA regulations make clear, 

the category in which a particular risk appears on a drug label is a critical indicator 

of both the degree of the risk and also the likelihood and severity of the adverse 

consequences the drug may cause. 

After a new drug application has been approved, the drug's sponsor has continuing 

duties to the FDA to ensure the long term efficacy and safety of the approved drug. 

For example, once drugs are approved by the FDA, the drug's sponsor is required 

to review, and report to the FDA, all "adverse drug experience"4

 information it 

4

 FDA regulations define an "adverse drug experience" as: 

Any adverse event associated with the use of a drug in humans, 

whether or not considered drug related, including the following: An 

adverse event occurring in the course of the use of a drug product in 

professional practice; an adverse event occurring from drug overdose 

whether accidental or intentional; an adverse event occurring from 
 

receives from any source, including adverse experiences reported during the 

process of post-marketing clinical trials. 21 C.F.R. § 314.80(b), (c) (2014). As 

new risks and side effects are discovered, a manufacturer must revise a drug's label 

"to include a warning about a clinically significant hazard as soon as there is 

reasonable evidence of a causal association with a drug; a causal relationship need 

not have been definitely established." 21 C.F.R. § 201.57(c)(6)(i). As the FDA 

does not conduct independent scientific testing, it is incumbent upon sponsors to 

disclose all clinical data to ensure the safe and effective use of drugs. 

Some have expressed a growing concern regarding the pharmaceutical industry's 

reticence to disclose negative clinical data, and the impact this has on the public 

health and welfare. Indeed, it has been stated that: 

[T]he failure to disclose study results not only impacts clinical trial 

participants, but the health of the general public may be put in 

jeopardy as well. For drugs that have received FDA approval, postmarket clinical trials investigating new uses of the medication often 

reveal important information concerning side effects and related 

adverse complications with the treatment. To the extent that 

prescribing physicians do not have this essential data, they could 

inadvertently be putting their patients at serious risk by continuing to 

recommend the medication. 

Over the past few years, numerous scandals in the drug industry 

illustrate that concealing unfavorable research results is far from an 

isolated practice. . . . . In a quest to boost sales and increase 

corporate profits, the temptation to hide or selectively disclose clinical 

trial data has proven to be too much. 

Christine D. Galbraith, Dying to Know: A Demand for Genuine Public Access to 

Clinical Trial Results Data, 78 Miss. L.J. 705, 710 (2009). 

"The FDA's premarket approval of a new drug application includes the approval of 

the exact text in the proposed label." Wyeth, 555 U.S. at 568 (citing 21 U.S.C. 

drug abuse; an adverse event occurring from drug withdrawal; and 

any failure of expected pharmacological action. 

21 C.F.R. § 314.80(a) (2014). 
 

§ 355 (2006); 21 C.F.R. § 314.105(b) (2008)). Subsequent to approval of the new 

drug application, a drug manufacturer must submit a supplemental application to 

the FDA in order to effect any changes in the drug label. Id. (citing 21 U.S.C. 

§ 355 (2006); 21 C.F.R. § 314.105(b) (2008)). "There is, however, an FDA 

regulation that permits a manufacturer to make certain changes to its label before 

receiving the agency's approval." Id. (emphasis added). 

Among other things, this "changes being effected" (CBE) regulation 

provides that if a manufacturer is changing a label to "add or 

strengthen a contraindication, warning, precaution, or adverse 

reaction" or to "add or strengthen an instruction about dosage and 

administration that is intended to increase the safe use of the drug 

product," it may make the labeling change upon filing its 

supplemental application with the FDA; it need not wait for FDA 

approval. 

Id. (quoting 21 C.F.R. §§ 314.70(c)(6)(iii)(A), (C)). 

Following FDA approval of a new drug (or a new indication for an existing drug), 

pharmaceutical companies may begin to market the drug, subject to federal 

regulations. See, e.g., 21 C.F.R. § 203.2 (2014) ("The purpose of this part is . . . to 

protect the public health . . . ."). Typical pharmaceutical marketing strategies 

include both direct sales calls (i.e., visits to prescribing doctors to distribute 

literature and samples) and academic writings and speaking events led by 

healthcare professionals. 

Risperdal (risperidone) is an antipsychotic drug primarily used to treat 

schizophrenia. Schizophrenia is a chronic, debilitating mental illness that affects 

approximately 1% of the population. Following onset, schizophrenia is a lifelong, 

incurable disease, and treatment almost always involves the use of an antipsychotic 

drug. Between the 1950s and 1990s, medical practitioners prescribed typical 

antipsychotics such as Thorazine (chlorpromazine), Prolixin (fluphenazine), Haldol 

(haloperidol), Loxitane (loxapine), and Mellaril (thioridazine) to treat 

schizophrenia. Although effective, these typical antipsychotics posed a number of 

negative side effects, including involuntary muscle movements and tardive 

dyskinesia, a long-lasting movement disorder. 

By the 1980s, clozapine was being investigated for the treatment of schizophrenia 

on the theory that it might be more effective and cause fewer movement disorders 
 

than typical antipsychotics. Clozapine was termed an "atypical antipsychotic" 

because it affected a different part of the brain than the older, typical 

antipsychotics. The medical community soon discovered that clozapine, too, had 

negative side effects, including agranulocytosis—a dramatic and sometimes deadly 

decrease in white blood cell count. Thus, in spite of its efficacy in treating the 

symptoms of schizophrenia, clozapine was usually used only as a "last resort" 

drug, prescribed for only about 10% of the schizophrenic population. 

In 1994, Janssen introduced Risperdal in the United States as the second atypical 

antipsychotic drug on the market. From 1994 to 1996, Risperdal held a unique 

place in the market—it was promoted as being more effective than the older, 

typical antipsychotics, without the dangerous side effects associated with 

clozapine. In 1996, Eli Lilly (Lilly) introduced a third atypical antipsychotic drug 

to the market: Zyprexa. Zyprexa was dramatically successful when it hit the 

market, and Lilly and Janssen competed to capture the antipsychotic market. 

Spurred by this fierce competition, Janssen developed a marketing strategy to 

distinguish Risperdal and protect its market share. By 1998, Janssen was 

promoting Risperdal as having a lower risk of weight gain and a lower metabolic 

risk profile than Zyprexa.5

 Despite the claims made by Janssen, post-marketing 

studies, some as early as 1994, revealed Risperdal posed a serious risk of 

substantial weight gain, increased prolactin levels, and hyperprolactinemia in 

patients taking atypical antipsychotics. This increased the long-term risk of 

developing various kinds of cancer, osteoarthritis, cardiovascular disease, and 

stroke. Additionally, atypical antipsychotics greatly increased the risk of diabetes 

mellitus, which can have very serious, even life-threatening consequences. By 

1997, Janssen also had information that Risperdal posed a serious risk of stroke, 

cardiac arrest, and sudden death in the elderly. Despite this clinical information, it 

was several years before Janssen updated the Risperdal label to accurately reflect 

the frequency and severity of the risk of hyperprolactinemia, weight gain and 

diabetes, or stroke, cardiac arrest, and sudden death in the elderly. 

In 1997, Janssen commissioned a clinical trial (Trial 113) designed to establish 

Risperdal's superiority over Zyprexa as to metabolic side effects, including weight 

5

 In turn, Lilly differentiated Zyprexa as posing a lower risk for movement 

disorders and hyperprolactinemia, a hormonal imbalance causing serious and 

lasting reproductive side effects, when compared to Risperdal. 
gain and diabetes. In 1999, the results of Trial 113 were not what Janssen desired, 

as the study concluded that there was no difference between Risperdal and Zyprexa 

in terms of long-term weight gain or the onset of diabetes mellitus. Janssen did not 

disclose or publish the results of Trial 113 and continued to claim that Risperdal 

was superior to Zyprexa in terms of these negative metabolic side effects. 

By August 2000, Janssen also received results from two epidemiological studies. 

One study was based on a review of the records of patients treated with atypical 

antipsychotics in a New England insurance database (ERI study). The ERI study 

showed that Risperdal patients developed diabetes mellitus at a significantly higher 

incident rate than patients taking Zyprexa. The second study was commissioned 

by Janssen (HECON study), and it concluded that Risperdal was not associated 

with an increased risk of diabetes mellitus. By this time, and notwithstanding 

Janssen's furtive efforts, the risks and adverse side effects associated with atypical 

antipsychotic drugs were fairly well known. 

In May 2000, the FDA asked sponsors of atypical antipsychotic drugs to submit a 

comprehensive review of all clinical data pertaining to metabolic side effects. In 

response, Janssen did not disclose the results of the Trial 113 study but disclosed 

only the favorable results from its own HECON study, affirmatively indicating to 

the FDA that no long-term trials pertaining to metabolic side effects had taken 

place. The FDA's review was not thwarted by Janssen's efforts, as the FDA's 

investigation prompted it to request that product labeling for all atypical 

antipsychotic medications, including Risperdal, include a warning about 

hyperglycemia and diabetes. 

Janssen was concerned that the FDA-mandated label warning would result in a 

substantial loss of Risperdal market share. Notwithstanding the Trial 113 and ERI 

study results suggesting an association between Risperdal and diabetes, in October 

2000, Janssen's Associate Director of Central Nervous System Medical Affairs 

wrote an email to her colleagues urging that Janssen must avoid Risperdal being 

"lumped in to [sic] the atypical class for diabetes. . . . [W]e need to work hard on a 

strategy to avoid risperdal being thought of as a diabetes-inducing medication. 

Instead, when worried about diabetes, we want doctors to prescribe Risperdal." 

Janssen then determined it would take control of how the message surrounding the 

new diabetes warning would be communicated. Janssen officials' strategy was to 

"soften the blow" through what is known in the industry as a Dear Doctor Letter 

(DDL). The inspiration came from a DDL that Lilly sent to prescribers, informing 
 

them that the entire class of atypical antipsychotics was now subject to a new 

"class label" for diabetes and hyperglycemia. A senior vice president for Janssen's 

parent company wrote in an internal email that "Lilly's DDL is pretty clever. How 

much commercial liability would we incur if we sent a similar letter about 

Risperdal, assuming the FDA is unwilling to communicate the issue?" 

On November 10, 2003, Janssen disseminated a DDL, which did not include the 

text of the new diabetes/hyperglycemia warning, but stated: 

Hyperglycemia-related adverse events have infrequently been 

reported in patients receiving RISPERDAL. Although confirmatory 

research is still needed, a body of evidence from published peerreviewed epidemiology research suggests that RISPERDAL is not 

associated with an increased risk of diabetes when compared to 

untreated patients or patients treated with conventional antipsychotics. 

Evidence also suggests that RISPERDAL is associated with a lower 

risk of diabetes than some other studied atypical antipsychotics. 

To put it mildly, the November 2003 DDL contained false information. 

Additionally, in training its employees on the labeling update, Janssen 

communicated to its field sales team that Risperdal had a "0%" increased diabetes 

risk compared to placebo. This was part of the message communicated to 

physicians in DDL follow-up visits with physicians. 

Meanwhile, by January 2004, Janssen had updated the Risperdal label to include 

the new diabetes/hyperglycemia warning. Janssen determined that the negative 

sales impact had been minimal because of its deceptive efforts in the November 

2003 DDL. In other words, the November 2003 DDL worked, as far as Janssen 

was concerned, in protecting its market share. 

Thereafter, in April 2004, the FDA's Division of Drug Marketing Advertising and 

Communications (DDMAC)6

 issued a "Warning Letter" to Janssen, characterizing 

the November 2003 DDL as "false or misleading" in violation of the FDCA. 

Specifically, the letter provided: 

6

 This agency is now known as the Office of Prescription Drug Promotion (OPDP). 
 

DDMAC has concluded that the DHCP7 letter is false or misleading in 

violation of Sections 502(a) and 201(n) of the Federal Food, Drug, 

and Cosmetic Act (Act) (21 U.S.C. 325(a) and 321(n)) because it fails 

to disclose the addition of information relating to hyperglycemia and 

diabetes mellitus to the approved product labeling, minimizes the risk 

of hyperglycemia-related adverse events, which in extreme cases is 

associated with serious adverse events including ketoacidosis, 

hyperosmolar coma, and death, fails to recommend regular glucose 

control monitoring to identify diabetes mellitus as soon as possible, 

and misleadingly claims that Risperdal is safer than other atypical 

antipsychotics. The healthcare community relies on DHCP letters for 

accurate and timely information regarding serious risks and associated 

changes in labeling and the dissemination of this letter at a time 

critical to educating healthcare providers is a serious public health 

issue. 

The FDA also determined that the scientific studies referenced in the DDL "do not 

represent the weight of the pertinent scientific evidence" nor did the DDL 

accurately describe the results of the cited studies. As a result of the FDA's 

warning, Janssen issued a corrective letter in July 2004, acknowledging that the 

November 2003 DDL "omitted material information about Risperdal, minimized 

potentially fatal risks, and made misleading claims suggesting superior safety to 

other atypical antipsychotics without adequate substantiation, in violation of the 

[FDCA]." 

As to Risperdal's label, Janssen did not update the label to include a boxed warning 

regarding the risk of stroke, cardiac arrest, and sudden death in the elderly until 

February 2005, and no warning about hyperprolactinemia appeared in the label 

until August 2008.8 

7

 Dear Health Care Provider, which is another term for a Dear Doctor Letter. 

8

 To be sure, prior versions of the Risperdal label mentioned the risk of 

"cerebrovascular adverse events" in elderly patients, increased prolactin levels, and 

hyperprolactinemia; however, Janssen's categorization of those risks on the label 

underrepresented and minimized the frequency and severity of the risks associated 

with Risperdal. As noted, the category in which a particular risk appears on a drug 

label is a critical indicator of both the degree of the risk and also the likelihood and 

severity of the adverse consequences the drug may cause. See 21 C.F.R. 
 

In April of 2007, the Attorney General of South Carolina filed a state law claim 

against Janssen, seeking civil penalties under SCUTPA. The State pursued two 

claims against Janssen, one in connection with the Risperdal label (the labeling 

claim) and the second concerning the November 2003 DDL (the DDL claim). 

Following a twelve-day trial, the jury returned a verdict on liability in favor of the 

State, finding that Janssen's actions with respect to both the labeling and DDL 

claims were willful violations of SCUTPA. 

After dismissing the jury, the trial court separately considered evidence and 

arguments during a two-day hearing to determine the appropriate penalty for 

Janssen's SCUTPA violations. The trial court issued an order assessing penalties 

against Janssen of $152,849,700 for the labeling claim and $174,224,000 for the 

DDL claim, for a total penalty of $327,073,700. This appeal followed. This case 

was transferred from the court of appeals to this Court pursuant to Rule 204(b), 

SCACR. 

II. 

Analysis Concerning Liability
 

SCUTPA "declares unfair or deceptive acts or practices in trade or commerce 

unlawful." Singleton v. Stokes Motors, Inc., 358 S.C. 369, 379, 595 S.E.2d 461, 

466 (2004) (citing S.C. Code Ann. § 39-5-20(a) (2002)). "An unfair trade practice 

has been defined as a practice which is offensive to public policy or which is 

immoral, unethical, or oppressive." deBondt v. Carlton Motorcars, Inc., 342 S.C. 

254, 269, 536 S.E.2d 399, 407 (Ct. App. 2000) (citing Young v. Century LincolnMercury, Inc., 302 S.C. 320, 326, 396 S.E.2d 105, 108 (Ct. App. 1989), aff'd in 

part, rev'd in part on other grounds, 309 S.C. 263, 422 S.E.2d 103 (1992)). 

SCUTPA provides for both civil actions brought by private citizens and 

enforcement actions brought by the Attorney General on behalf of the State. S.C. 

Code Ann. §§ 39-5-50(a), -110(a), -140(a) (1985). While the only section of 

SCUTPA at issue in this case is an enforcement action brought by the Attorney 

General, we note the distinction between the two types of actions. In an action 

brought by a citizen under section 39-5-140(a) of the South Carolina Code, there is 

§§ 201.56, 201.57 (setting forth detailed requirements on the content and format of 

information on drug labels to ensure labels are not inaccurate, false, or misleading 

and convey all pertinent information regarding the safe and effective use of drugs). 
 

 

 

a requirement that the person suffer an "ascertainable loss of money or property, 

real or personal, as a result of the use or employment by another person of an 

unfair or deceptive method, act or practice . . . ." Thus, SCUTPA requires that a 

private claimant suffer an actual loss, injury, or damage, and requires a causal 

connection between the injury-in-fact and the complained of unfair or deceptive 

acts or practices. S.C. Code Ann. § 39-5-140(a).9 

Conversely, an enforcement action brought by the Attorney General has no such 

actual impact requirement. See S.C. Code Ann. § 39-5-50(a). The Attorney 

General "may recover on behalf of the State a civil penalty of not exceeding five 

thousand dollars per violation." S.C. Code Ann. § 39-5-110(a). "The legislature 

intended . . . [SCUTPA] to control and eliminate the large scale use of unfair and 

deceptive trade practices within the state of South Carolina." Noack Enters. v. 

Country Corner Interiors of Hilton Head Island, Inc., 290 S.C. 475, 477, 351 

S.E.2d 347, 349 (Ct. App. 1986) (quotations and citations omitted). 

At the outset of our analysis, our review of the extensive record compels us to 

acknowledge that Risperdal has been an effective drug. The State did not file this 

case because of concern with Risperdal's efficacy as an atypical antipsychotic.10 

Risperdal, like virtually all pharmaceutical drugs, has risks and side effects. The 

State filed this case because of its belief that Janssen engaged in unfair and 

deceptive conduct in South Carolina by failing to properly disclose Risperdal's 

9

 "Under section 39-5-140, a plaintiff can recover treble damages where 'the use or 

employment of the unfair or deceptive . . . act or practice was a willful or knowing 

violation of § 39-5-20.'" Wright v. Craft, 372 S.C. 1, 23–24, 640 S.E.2d 486, 498 

(Ct. App. 2006) (quoting Noack Enters., Inc. v. Country Corner Interiors of Hilton 

Head Island, Inc., 290 S.C. 475, 477, 351 S.E.2d 347, 348–49 (Ct. App. 1986)). 

10 Similar Risperdal litigation against Janssen and its parent company, Johnson & 

Johnson, has been ongoing throughout the United States. In November 2013, 

Johnson & Johnson agreed to pay more than $2.2 billion in civil and criminal 

settlements with the United States Department of Justice to resolve claims that it 

improperly marketed Risperdal. 

Following oral argument, we received supplemental citations filed by Janssen 

regarding similar litigation in Louisiana and Arkansas. After closely examining 

the reported decisions in those states, we have determined that the cases involve 

statutory claims which do not mirror the SCUTPA. 
risks and side effects in an attempt to mislead prescribing physicians and the 

public. An objective review of the evidence and law bears out the State's 

allegations that Janssen engaged in a systematic pattern of deceptive conduct. 

 

Janssen raises a number of issues in their appeal. While we reach the merits of a 

number of these issues, many of the issues are not preserved for this Court's 

review, and we address them only briefly. 

A. 

Opening and Closing Arguments 

Janssen claims that various portions of the State's opening and closing arguments 

were inflammatory and unduly prejudicial and thus warrant a new trial. 

Specifically, Janssen claims that the State invited the jury to impose liability on the 

basis of Janssen's size and commercial success by repeatedly referring to Janssen's 

profits from selling Risperdal and claiming that Janssen put "profits over safety." 

We find that Janssen's arguments on appeal are procedurally barred. Although 

Janssen noted a generalized "continuing objection" at the outset of trial, apparently 

believing it could make a more specific after-the-fact objection to any alleged 

improper argument or evidence, such an approach is wholly inconsistent with our 

law requiring a contemporaneous objection. See Young v. Warr, 252 S.C. 179, 

200, 165 S.E.2d 797, 807 (1969) ("[T]he proper course to be pursued when counsel 

makes an improper argument is for opposing counsel to immediately object and to 

have a record made of the statements or language complained of and to ask the 

court for a distinct ruling thereon." (citing Crocker v. Weathers, 240 S.C. 412, 424, 

126 S.E.2d 335, 340 (1962))). This rule is designed to enable the trial court to 

timely address and remedy a founded objection. See Herron v. Century BMW, 395 

S.C. 461, 465, 719 S.E.2d 640, 642 (2011) ("'Issue preservation rules are designed 

to give the trial court a fair opportunity to rule on the issues, and thus provide us 

with a platform for meaningful appellate review.'" (quoting Queen's Grant II 

Horizontal Prop. Regime v. Greenwood Dev. Corp., 368 S.C. 342, 373, 628 S.E.2d 

902, 919 (Ct. App. 2006))). Here, absent a contemporaneous objection identifying 

the particular comments complained of and the basis for the objection, Janssen has 

waived its right to complain about this issue on appeal. Webb v. CSX Transp., Inc., 

364 S.C. 639, 655, 615 S.E.2d 440, 449 (2005) (holding that the failure to 

contemporaneously object precluded the defendant from raising an issue on appeal 
 

 

(citing Taylor v. Medenica, 324 S.C. 200, 212, 479 S.E.2d 35, 41 (1996))).11 

Moreover, Janssen's "continuing objection" at trial concerning the propriety of 

counsel's statements to the jury was limited to relevance, which is an entirely 

different basis than the inflammatory/unduly prejudicial argument that Janssen 

now advances on appeal. Thus, even generously construing Janssen's pre-trial 

objection as sufficient to preserve the objection, Janssen's claim is nonetheless 

procedurally barred from appellate review because Janssen argues a different basis 

on appeal than was argued at trial. State v. Dunbar, 356 S.C. 138, 142, 587 S.E.2d 

691, 694 (2003) ("A party may not argue one ground at trial and an alternate 

ground on appeal." (citing State v. Prioleau, 345 S.C. 404, 411, 548 S.E.2d 213, 

216 (2001); State v. Benton, 338 S.C. 151, 157, 526 S.E.2d 228, 231 (2000))). 

Janssen's claims of error are without merit in any event. Janssen relies on our 

holding in Branham v. Ford Motor Co., 390 S.C. 203, 701 S.E.2d 5 (2010), in 

urging this Court to order a new trial. In Branham, the plaintiff's attorney strayed 

beyond the parameters of permissible jury argument and sought punitive damages 

for the damage caused to non-parties. Id. at 235, 701 S.E.2d at 22. We ordered a 

new trial, holding that "[t]he closing argument invited the jury to base its verdict on 

passion rather than reason. . . . [and] denied [defendant] a fair trial." Id. We find 

that Branham is readily distinguishable from this case. Here, counsel for the State 

directly linked the elements of SCUTPA to Janssen's misleading and deceptive 

practices and its motivations to retain (and increase) Risperdal market share. Such 

arguments were within proper bounds as the State sought to establish that Janssen 

acted willfully and contrary to the public interest. In addition, the nature of 

counsel's comments is more closely associated with what Janssen believes was a 

grossly excessive award of civil penalties, and the jury's role was limited to 

11 We acknowledge the rule in South Carolina that counsel is not required to harass 

the trial judge by making continued objections after an issue has been ruled upon. 

See Dunn v. Charleston Coca-Cola Bottling Co., 311 S.C. 43, 45–46, 426 S.E.2d 

756, 758 (1993) (noting that where a trial judge has fair opportunity to consider 

and rule upon an issue, it is not incumbent upon counsel "to harass the judge by 

parading the issue before [the trial judge] again"). However, that is not the 

situation before us, for Janssen failed to bring to the trial court's attention any of 

the comments of which it now complains or specify the basis for its objection, 

much less obtain a ruling from the trial court. Thus, because the trial court did not 

have a fair opportunity to consider and rule upon Janssen's specific objections, it 

was incumbent upon Janssen's counsel to object contemporaneously. 
 

 

determining liability. The jury had no role in determining the amount of the civil 

penalties. 

B. 

Admission of 1994, 1999, and 2004 DDMAC Letters 

Janssen argues that the admission of several DDMAC letters was reversible error 

because the letters constitute inadmissible hearsay and should also have been 

excluded under Rule 403, SCRE. Once again, we find that Janssen has not 

preserved these assignments of error for appellate review.12 Even if we were to 

reach the merits of these claims, however, we would affirm the admission of these 

letters pursuant to Rule 220(b)(1), SCACR. This evidence was relevant to the 

issue of liability and concomitantly the statute of limitations concerning the 

labeling claim, which, as discussed below, inures to Janssen's benefit. 

12 Janssen's contemporaneous objection at trial to admission of the 1994 DDMAC 

letter was on the basis of relevance, not on the basis of hearsay or Rule 403, SCRE. 

See Talley v. S.C. Higher Educ. Tuition Grants Comm., 289 S.C. 483, 487, 347 

S.E.2d 99, 101 (1986) ("It is an axiomatic rule of law that issues may not be raised 

for the first time on appeal." (citing Am. Hardware Supply Co. v. Whitmire, 278 

S.C. 607, 609, 300 S.E.2d 289, 290 (1983))). While it appears that Janssen was 

more specific in objecting to the admission of the 1999 DDMAC letter—objecting 

on relevancy, hearsay, and Rule 403, SCRE grounds—the trial judge did not 

specifically rule on the hearsay or Rule 403, SCRE, issues. Thus, Janssen's 

assignment of error is not preserved for appellate review. Kleckley v. Nw. Nat. 

Cas. Co., 338 S.C. 131, 138, 526 S.E.2d 218, 221 (2000) ("An issue not raised to 

or addressed by the trial court or the Court of Appeals is not properly preserved for 

review by the Supreme Court . . . ." (citing Anonymous (M-156-90) v. State Bd. of 

Med. Exam'rs, 329 S.C. 371, 375, 496 S.E.2d 17, 18–19 (1998); Camp v. Springs 

Mortg. Corp., 310 S.C. 514, 516, 426 S.E.2d 304, 305 (1993))). Regarding the 

2004 DDMAC letter, no challenge is preserved for our review. Janssen's pre-trial 

objection to admission of the letter was only with regard to use or mention of the 

letter during opening statements, and Janssen's counsel did not state the specific 

grounds for the objection. Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 

733 (1998) ("[A]n objection must be sufficiently specific to inform the trial court 

of the point being urged by the objector." (citation omitted)). 
C. 

Adverse Impact 

Janssen argues that the State's SCUTPA claims fail as a matter of law because the 

State failed to show that Janssen's unfair and deceptive conduct had an adverse 

impact within South Carolina. We disagree. We reject Janssen's attempt to ascribe 

an injury-in-fact element in an individual claim to an Attorney General directed 

claim, for to do so would be judicial engrafting of an element beyond that imposed 

by the legislature. In the context of this case, Janssen's attempt to judicially 

impose an injury-in-fact element to an Attorney General initiated SCUTPA claim 

is nothing more than an "if we lied, nobody fell for it" defense. In this regard, we 

observe that Janssen seeks to impose an absurd adverse impact element in a claim 

concerning alleged unfair and deceptive marketing of prescription medicines. In 

many instances, as here, the manifestations of adverse consequences from 

prescription medicines are not immediate, but occur over time. Such is generally 

the case with Risperdal. In any event, Janssen's deceptive conduct had an adverse 

impact on the citizens of South Carolina, for Janssen maintained its superior 

market share, which, after all, was what Janssen sought to achieve by its 

dishonesty. 

The provisions of SCUTPA allow three types of enforcement actions: (1) lawsuits 

initiated by the Attorney General seeking injunctive relief; (2) lawsuits by the 

Attorney General seeking civil penalties; or (3) lawsuits by private parties who 

have suffered ascertainable losses. S.C. Code Ann. §§ 39-5-50, -110, -140; see 

also Michael R. Smith, Note, Recent Developments Under the South Carolina 

Unfair Trade Practices Act, 44 S.C. L. Rev. 543, 543–44 (1993) (discussing 

generally various provisions of SCUTPA). Although this case is an appeal from a 

lawsuit by the Attorney General seeking civil penalties, we note some important 

distinctions between actions brought by the Attorney General and those brought by 

private parties. 

To recover actual damages under SCUTPA, a private claimant must suffer an 

actual loss, injury, or damages, and the claimant must demonstrate a causal 

connection between the injury-in-fact and the complained of unfair or deceptive 

acts or practices. S.C. Code Ann. § 39-5-140(a). Additionally, a private party may 

recover treble damages if the unlawful acts at issue are determined to be willful or 

knowing. Id. On the other hand, where the Attorney General files suit on behalf of 
 

 

the State, he is not required to show any injury-in-fact to recover a civil penalty.13 

See S.C. Code Ann. §§ 39-5-110, -140. Rather, SCUTPA allows the Attorney 

General to recover statutory damages of up to $5,000 per violation upon a showing 

that the unlawful acts at issue are willful.14 S.C. Code Ann. § 39-5-110(a). If the 

13 Other states have similar provisions. See, e.g., Mulligan v. QVC, Inc., 888 

N.E.2d 1190, 1196 (Ill. App. Ct. 2008) ("Although the Attorney General may 

prosecute a violation of the [Consumer Fraud and Deceptive Business Practices] 

Act without showing that any person has in fact been damaged, it is well settled 

that in order to maintain a private cause of action under the Consumer Fraud Act, a 

plaintiff must prove that she suffered actual damage as a result of a violation of the 

Act." (citation omitted)); Edmonds v. Hough, 344 S.W.3d 219, 223 (Mo. Ct. App. 

2011) ("The [Merchandising Practices] Act eliminates the need for the Attorney 

General to prove intent to defraud or reliance in order for the court to find that a 

defendant has engaged in unlawful practices. Intent and reliance are not necessary 

elements of the cause of action." (quotations and citations omitted)). We 

recognize, however, there are jurisdictions that require the state to show an injuryin-fact as an element of unfair trade practice type claim. Following oral argument 

in this case, Janssen has submitted supplemental authority consisting of court 

decisions from other states reversing trial court verdicts against Janssen. We have 

carefully reviewed those decisions and conclude they are not persuasive, for the 

cases submitted by Janssen involve different claims with elements that do not 

mirror the South Carolina UFTPA. 

14 "[A] willful violation occurs when the party committing the violation knew or 

should have known that his conduct" was unlawful. S.C. Code Ann. § 39-5-

110(c). In addition to the civil penalty, the Attorney General is authorized to seek 

injunctive relief when he "has reasonable cause to believe that any person is using, 

has used or is about to use any method, act or practice declared by § 39-5-20 to be 

unlawful . . . ." S.C. Code Ann. § 39-5-50(a). To be sure, the legislature has 

granted the Attorney General broad investigative powers. See S.C. Code Ann. § 

39-5-70(a) ("When it appears to the Attorney General that a person has engaged in, 

is engaging in, or is about to engage in any act or practice declared to be unlawful 

by this article[,] . . . [he may serve] an investigative demand . . . ."). While an 

individual statutory claim necessarily includes an injury-in-fact element, an 

Attorney General initiated claim does not. It is the protection of the people of 

South Carolina that lies at the center of an Attorney General directed claim. 
 

 

 

Attorney General determines that an enforcement action "would be in the public 

interest," he is statutorily authorized to proceed without making any such showing 

of injury-in-fact or reliance.15 S.C. Code Ann. § 39-5-50(a). Thus, Janssen 

misconstrues the legislature's manifest purpose in providing for an Attorney 

General directed claim, for a SCUTPA action brought by the State is to protect the 

citizens of South Carolina from unfair or deceptive acts in the conduct of any trade 

or commerce. Janssen's contention to the contrary is not only fundamentally at 

odds with unambiguous legislative intent in authorizing an Attorney General 

SCUTPA claim, but is also inconsistent with well-established South Carolina law. 

On the issue of liability, our case law interpreting and applying SCUTPA is 

clear—while a private party SCUTPA action requires the traditional showing of an 

injury, an action brought by the Attorney General on behalf of the State contains 

no actual injury element. For the foregoing reasons, we hold that, although the 

State had the burden of proving Janssen's representations had a tendency to 

deceive, the State was not required to show actual deception or that those 

representations caused any appreciable injury-in-fact or adversely impacted the 

marketplace. We find ample support in the record that the State met its burden of 

proving that Janssen's actions had the tendency to deceive. Janssen's unfettered 

desire for sales and market share led it to engage in a systematic pattern of 

intentional nondisclosure, false representations, and deceptive conduct in violation 

of SCUTPA. Most assuredly, Janssen intended to deceive the public and the 

medical community. Although we reject Janssen's effort to impose an injury-infact element in an Attorney General initiated claim, we believe the argument 

carries persuasive weight in the assessment of an appropriate penalty, which we 

address in the penalty section. 

15 "'It is in the public interest generally to prevent the use of false and misleading 

statements in the conduct of business . . . [and] actual deception need not be 

shown; a finding of a tendency [and capacity] to deceive and mislead will suffice.'" 

State ex rel. McLeod v. Brown, 278 S.C. 281, 285, 294 S.E.2d 781, 783 (1982) 

(quoting U.S. Retail Credit Assoc., Inc. v. F.T.C., 300 F.2d 212, 221 (4th Cir. 

1962)) (ellipsis in original). Additionally, "[t]he health, welfare, and safety of the 

lives and property of the people of this State . . . are matters of public concern." 

S.C. Const. art. XII, § 1. 
 

 

 

D. 

Exclusion of Dr. Wecker's Expert Testimony 

s that the trial court erred in excluding the testimony of Dr. 

pert statistician whose testimony, according to Janssen, wou

nssen's representations in the Risperdal label and the Novem

mpact on any prescribing physicians. The import of Dr. We

Janssen claim William 

Wecker, an ex ld have 

shown that Ja ber 2003 

DDL had no i cker's 

testimony would have been that, notwithstanding Janssen's false representations, 

the community of prescribing physicians was well aware of the risks and side 

effects of Risperdal. 

We are again presented with an issue that was not properly preserved for appellate 

review. When the trial court filed its order on February 25, 2011, excluding the 

testimony of Dr. Wecker on relevancy grounds, Janssen waited until March 21, 

2011, to make an offer of proof of his testimony. The offer of proof came too late. 

TNS Mills, Inc. v. S.C. Dep't of Rev., 331 S.C. 611, 628, 503 S.E.2d 471, 480 

(1998) (noting that a failure to make a proffer of what an excluded witness's 

testimony would have been precludes appellate review); see also Greenville Mem'l 

Auditorium v. Martin, 301 S.C. 242, 244, 391 S.E.2d 546, 547 (1990) ("An alleged 

erroneous exclusion of evidence is not a basis for establishing prejudice on appeal 

in absence of an adequate proffer of evidence in the court below." (citations 

omitted)).16 

On the merits, for the reasons discussed in the previous section, we would not find 

reversible error in any event. We do acknowledge there was evidence presented, 

which otherwise tended to support Janssen's thesis that its deceptive conduct had 

no effect on the community of prescribing physicians, for they knew the truth 

concerning the risks and side effects associated with Risperdal. Excluding Dr. 

Wecker's testimony, therefore, resulted in no prejudice to Janssen. Yet, as 

discussed above, Janssen's relevancy argument is based on the false premise that 

actual harm resulting from the deceptive conduct is a necessary element of an 

Attorney General directed claim. 

16 It is for the same reason we reject Janssen's claim that the trial court erred by 

excluding the testimony of the twenty surveyed physicians and evidence of the 

2007 Zyprexa product insert and 2010 Latuda product insert. 
 

E. 

First Amendment 

bility verdict and the penalty awar

ech. We disagree. 

eserved this issue for review. Alth

ent jury instruction and raised the 

Janssen argues that the lia d impermissibly 

restrict its right to free spe

Again, Janssen has not pr ough Janssen 

requested a First Amendm issue in its motion for 

JNOV, Janssen failed to raise any First Amendment issues in its motion for a 

directed verdict. Janssen's failure to raise this issue in its motion for a directed 

verdict precludes any appellate review. In re McCracken, 346 S.C. 87, 93, 551 

S.E.2d 235, 238 (2001) ("[S]ince only grounds raised in the directed verdict 

motion may properly be reasserted in the jnov motion, and since no grounds were 

raised in the directed verdict motion, no jnov claim is preserved for our review." 

(citing Duncan v. Hampton Cnty. Sch. Dist. #2, 335 S.C. 535, 545, 517 S.E.2d 449, 

454 (Ct. App. 1999))). 

There is no error in any event, for the First Amendment does not bar imposition of 

liability on Janssen for violating SCUTPA. Janssen relies on the false premise that 

its conduct was not unfair and deceptive. While commercial speech is entitled to 

First Amendment protections, the Constitution does not erect a blanket shield 

insulating commercial speech from liability in all circumstances. In this regard, we 

find Janssen's reliance on Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011), is 

misplaced. The Supreme Court of the United States held in Sorrell that "[s]peech 

in aid of pharmaceutical marketing . . . is a form of expression protected by the 

Free Speech Clause of the First Amendment." Id. at 2659. Sorrell, however, does 

not deal with deceptive commercial speech. Instead, the Sorrell Court invalidated 

a Vermont law that regulated the type of pharmacy records that a drug 

manufacturer could obtain and use in marketing prescription drugs. Id. at 2659. 

The State of Vermont never argued "that the provision challenged . . . will prevent 

false or misleading speech," nor did it argue that the detailing17 at issue was "false 

17 Pharmaceutical companies such as Janssen "promote their drugs to doctors 

through a process called 'detailing.' This often involves a scheduled visit to a 

doctor's office to persuade the doctor to prescribe a particular pharmaceutical. 

Detailers bring drug samples as well as medical studies that explain the 'details' 

and potential advantages of various prescription drugs." Sorrell, 131 S. Ct. at 

2659. 
 

 

or misleading within the meaning of [the Supreme] Court's First Amendment 

precedents." Id. at 2672. We do not construe Sorrell as foreclosing a state from 

prohibiting unfair and deceptive prescription drug marketing. 

Indeed, it is a well-settled proposition that "[t]he government may ban forms of 

communication more likely to deceive the public than to inform it, or commercial 

speech related to illegal activity." Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. 

Comm'n of N.Y., 447 U.S. 557, 563–64 (1980) (internal citations omitted). The 

State correctly notes that commercial speech is not protected by the First 

Amendment unless it concerns lawful activity and is not misleading. Johnson v. 

Collins Entm't Co., 349 S.C. 613, 624, 564 S.E.2d 653, 659 (2002). 

Here, the jury found that Janssen's acts were unfair or deceptive, and thus unlawful 

under SCUTPA. In an action at law tried to a jury, the jury's factual findings will 

not be disturbed unless a review of the record discloses that there is no evidence 

that reasonably supports the jury's findings. City of North Myrtle Beach v. E. 

Cherry Grove Realty Co., 397 S.C. 497, 502, 725 S.E.2d 676, 678 (2012). The 

record is replete with evidence that reasonably supports a finding that Janssen's 

conduct was unfair and deceptive. Thus, we conclude Janssen may not avail itself 

of the protections of the First Amendment to shield itself from its deceptive 

conduct and false representations. 

F. 

Jury Instructions 

Janssen argues that the trial court erred by failing to charge the jury on federal law 

regarding "unfairness" and instead looking to South Carolina law to define the 

term. We disagree. 

Modeled after the language of the Federal Trade Commission Act (FTCA),18 

SCUTPA declares unlawful any unfair or deceptive acts or practices in trade or 

commerce. Compare 15 U.S.C. § 45(a)(1) (2012) ("Unfair methods of competition 

in or affecting commerce, and unfair or deceptive acts or practices in or affecting 

commerce, are hereby declared unlawful."), with S.C. Code Ann. § 39-5-20(a) 

("Unfair methods of competition and unfair or deceptive acts or practices in the 

conduct of any trade or commerce are hereby declared unlawful."). SCUTPA does 

not define the terms "unfair" and "deceptive"; rather, the legislature intended the 

18 15 U.S.C. §§ 41–77 (2012). 
 

 

 

courts to be guided by federal interpretations of those terms. S.C. Code Ann. § 39-

5-20(b) (1985) (instructing South Carolina courts to take guidance from "the 

interpretations given by the Federal Trade Commission and the Federal Courts to 

§ 5(a)(1)" of the FTCA); see also Wright v. Craft, 372 S.C. 1, 26, 640 S.E.2d 486, 

500 (Ct. App. 2006) ("Whether an act or practice is unfair or deceptive within the 

meaning of the [SC]UTPA depends on the surrounding facts and the impact of the 

transaction on the marketplace." (citing deBondt, 342 S.C. at 269, 536 S.E.2d at 

407)). 

To this end, our courts have interpreted those terms consistent with legislative 

intent. "'An act is "unfair" when it is offensive to public policy or when it is 

immoral, unethical, or oppressive.'" Health Promotion Specialists, LLC v. South 

Carolina Bd. of Dentistry, 403 S.C. 623, 638, 743 S.E.2d 808, 816 (2013) (quoting 

Gentry v. Yonce, 337 S.C. 1, 12, 522 S.E.2d 137, 143 (1999)). "'An act is 

"deceptive" when it has a tendency to deceive.'" Id. (quoting Gentry, 337 S.C. at 

12, 522 S.E.2d at 143). 

At trial, Janssen requested a jury instruction based on section 45(n) of the FTCA as 

it relates to determining whether an act or practice is "unfair."19 Specifically, 

Janssen asked the trial court to instruct the jury that in order to find dissemination 

of the November 2003 DDL to be an "unfair" trade practice, the jury must find "the 

act or practice causes or is likely to cause substantial injury to consumers which is 

not reasonably avoidable by consumers themselves and not outweighed by 

countervailing benefits to consumers or to competition." 15 U.S.C. § 45(n) (2012). 

We find no error, and we view this assignment of error as closely aligned with 

Janssen's view that an Attorney General directed action will not lie in the absence 

of an actual loss or damage, a view which we reject. Nevertheless, while there is 

little evidence of actual harm, there is overwhelming evidence of Janssen's 

longstanding pattern of deception in pursuit of its goal to deceive prescribing 

physicians and the public, as well as maintain and increase market share as a result 

19 Section 45(n) of the FTCA prohibits the Federal Trade Commission (FTC) from 

declaring an act or practice to be "unfair" unless "the act or practice causes or is 

likely to cause substantial injury to consumers which is not reasonably avoidable 

by consumers themselves and not outweighed by countervailing benefits to 

consumers or to competition." 15 U.S.C. § 45(n) (2012). Further, in determining 

whether an act or practice is unfair, section 45(n) provides that the FTC may 

consider established public policy along with all other evidence, but such public 

policy considerations may not serve as the primary basis for a finding of 

unfairness. Id. 
of its deceptive practices. 

Janssen also requested that the jury be instructed that a violation of public policy is 

not, in and of itself, a basis for finding Janssen's conduct to be an unfair trade 

practice and that a violation of public policy may not even be the primary basis 

upon which the jury based a finding of liability. According to Janssen, its 

requested jury instructions reflect the definition of "unfair" set forth in the FTCA, 

by which South Carolina courts are to be guided. We find no reversible error. 

Although SCUTPA refers to the FTCA for guidance, we find that the language of 

section 39-5-20(b) of the South Carolina Code reveals that federal interpretations 

are persuasive but not binding authority. Our appellate courts have amassed a 

strong and consistent body of case law defining "unfair" under SCUTPA. In the 

absence of a legislative response, it would be inappropriate for this Court to depart 

from settled South Carolina precedent. Moreover, we do not discern the wide 

chasm between the federal and state definitions of "unfair" that Janssen urges. We 

find that the jury instructions as given correctly stated South Carolina law and 

afforded the proper test for determining whether Janssen's conduct was "unfair" 

under SCUTPA. Thus, we hold that the trial court did not abuse its discretion by 

declining to adopt Janssen's proposed jury instructions. See Pittman v. Stevens, 

364 S.C. 337, 340, 613 S.E.2d 378, 379 (2005) ("The trial judge is required to 

charge only the current and correct law of South Carolina." (citing McCourt v. 

Abernathy, 318 S.C. 301, 305, 457 S.E.2d 603, 606 (1995))). 

G. 

Regulated Activity Exception to SCUTPA 

Janssen claims that the State's labeling claim was barred by SCUTPA's regulated 

activity exemption. We hold that Janssen has failed to preserve this issue for 

appellate review. However, even if we were to reach the merits, we would find 

that Janssen is not entitled to avail itself of the regulated activity exemption. 

SCUTPA expressly provides that it is inapplicable to "[a]ctions or transactions 

permitted under laws administered by any regulatory body or officer acting under 

statutory authority of this State or the United States." S.C. Code § 39-5-40(a) 

(1985). "This exception exempts an entity from liability where its actions are 

lawful or where it does something required by law, or does something that would 

otherwise be a violation of the Act, but which is allowed under other statutes or 

regulations." Dema v. Tenet Physician Servs. Hilton Head, Inc., 383 S.C. 115, 
 

123, 678 S.E.2d 430, 434 (2009) (quotations omitted). Janssen argues that, after 

approval of a proposed label, the FDA both authorized and required the use of that 

approved label. Thus, Janssen argues that FDA approval of the label triggers 

SCUTPA's regulated activity exemption and prohibits any claim in connection 

with the sufficiency of the label. 

Initially, Janssen fails to identify any specific trial court rulings claimed to 

constitute error. Because of this, Janssen's argument does not sufficiently identify 

with particularity the alleged error, and Janssen has abandoned its claim on appeal. 

See Rule 208(b)(4), SCACR ("The brief shall contain references to the transcript, 

pleadings, orders, exhibits, or other materials which may be properly included in 

the Record on Appeal . . . to support the salient facts alleged. References shall also 

be made to where relevant objections and rulings occurred in the transcript."); see 

also First Sav. Bank v. McLean, 314 S.C. 361, 363, 444 S.E.2d 513, 514 (1994) 

("Mere allegations of error are not sufficient to demonstrate an abuse of discretion. 

On appeal, the burden of showing abuse of discretion is on the party challenging 

the trial court's ruling." (citation omitted)). 

However, even if Janssen had properly preserved this issue, we note that Janssen 

was not entitled to avail itself of this SCUTPA provision. Wyeth makes clear that 

"a central premise of federal drug regulation [is] that the manufacturer bears 

responsibility for the content of its label at all times." 555 U.S. at 570–71. "[The 

manufacturer] is charged both with crafting an adequate label and with ensuring 

that its warnings remain adequate as long as the drug is on the market." Id. at 571 

(citing 21 C.F.R. § 201.80(e); 21 C.F.R. § 314.80(b); 73 Fed. Reg. 49605). Wyeth 

clearly rejects the notion that a manufacturer's decision not to include a stronger 

warning is authorized by the FDA—absent evidence that the FDA affirmatively 

considered and rejected the stronger warning after being supplied with an 

evaluation or analysis of the specific dangers presented. Id. at 572–73. The very 

purpose of the "changes being effected" corollary to the FDCA authorizes 

manufacturers to strengthen the warnings on a label without FDA approval, as long 

as the manufacturer files a supplemental new drug application. Id. at 568; 21 

C.F.R. § 314.70(c)(6)(iii)(A), (C) (2013). Indeed, the United States Supreme 

Court in Wyeth noted that "Congress enacted the FDCA to bolster consumer 

protection against harmful products. Congress did not provide a federal remedy 

for consumers harmed by unsafe or ineffective drugs in the [FDCA]. Evidently, it 

determined that widely available state rights of action provided appropriate relief 

for injured consumers." Id. at 574. Accordingly, Janssen cannot shield itself from 

liability by claiming that the FDA's approval of its label constituted an express 
 

authorization of its labeling decisions. See id. at 583 (Thomas, J., concurring in the 

judgment) ("[F]ederal law does not give drug manufacturers an unconditional right 

to market their federally approved drug at all times with the precise label initially 

approved by the FDA."). 

H. 

Statute of Limitations 

Janssen claims that the trial court erred by granting the State's motion for a directed 

verdict on the statute of limitations on the labeling claim and the DDL claim. We 

disagree concerning the DDL claim and affirm, but agree in part with Janssen 

regarding the labeling claim. The statute of limitations bars the labeling claim 

insofar as the trial court imposed civil penalties for violations that occurred more 

than three years prior to the parties' tolling agreement. Because of the ongoing 

nature of Janssen's deceptive conduct, we affirm the judgment on the labeling 

claim but limit the imposition of civil penalties to a three-year period, coextensive 

with the statute of limitations, subject only to the additional period of time between 

the tolling agreement and the filing of the Complaint. 

At the close of all of the evidence, the State moved for a directed verdict as to 

Janssen's statute of limitations defense, arguing that Janssen failed to present any 

evidence that the Attorney General's office had actual or constructive notice of 

Janssen's unlawful conduct prior to the commencement of the three year statute of 

limitations.20 Specifically, the State argued there was no evidence that the 

Attorney General, more than three years prior to the commencement of the statute 

of limitations on January 24, 2004, knew or should have known about the 

deceptiveness of the DDL and the Risperdal label, the concealed studies, or the 

unlawful promotion of Risperdal in South Carolina. 

The trial court granted the State's motion for a directed verdict, finding that neither 

the DDL claim nor the labeling claim was barred by the three-year statute of 

limitations. Specifically, the trial court noted that although the medical community 

at large was aware of the risks associated with Risperdal, some even as early as the 

mid-1990s, the point in time at which the side-effects of Risperdal became known 

was not the gravamen of the State's claims. Rather, the specific conduct at issue 

20 The Complaint was filed on April 23, 2007, but, as noted, the State and Janssen 

entered into a tolling agreement concerning the statute of limitations on January 

24, 2007. 
was Janssen's false and misleading statements in the DDL and Janssen's failure to 

update its label to reflect the known degree of risks associated with Risperdal. 

Accordingly, the relevant inquiry was the point at which the State should have 

known that Janssen's conduct as to the DDL and the Risperdal label was unfair or 

deceptive and, thus, gave rise to a SCUTPA claim. 

As to the DDL claim, the trial court found that claim was not barred by the statute 

of limitations because there was no evidence that the false or misleading nature of 

the DDL could have been discovered before the DDMAC issued its warning letter 

to Janssen in April 2004, which was within the timeframe of the tolling agreement. 

As to the labeling claim, the trial court found that because Janssen took affirmative 

steps to prevent disclosure of unfavorable clinical trial results that revealed the 

serious degree of risks associated with Risperdal, the statute of limitations was 

equitably tolled during the period of time in which Janssen knew, but failed to 

disclose and shielded from public knowledge, the true degree of risks associated 

with Risperdal. The trial court found the labeling claim likewise was not barred by 

the statute of limitations, and awarded a civil penalty for each of the of 509,499 

Risperdal "sample boxes" distributed in South Carolina from 1998 through the date 

of the Complaint, April 23, 2007, each of which included the drug label in the 

sample packaging. 

Janssen argues this was error and that both claims are barred by the statute of 

limitations because the State had actual or constructive knowledge of the claims 

before January 24, 2004. Specifically, as to the DDL claim, Janssen contends that 

the claim was discoverable from the face of the DDL itself, and therefore, the 

statute of limitations began to run at the time the DDL was mailed in November 

2003. As to the labeling claim, Janssen contends that claim is barred because the 

risks associated with Risperdal were widely known by the mid-1990s and that the 

alleged inadequacies in the labeling were apparent from the face of the label itself; 

therefore, Janssen posits that the labels themselves put the State on notice of its 

labeling claim as early as 1994, and that the three-year statute of limitations thus 

ran long before the State's Complaint was filed in 2007. Janssen further argues the 

doctrine of equitable tolling should be sparingly applied and that there is no basis 

for applying it here. 

We first address the DDL claim. SCUTPA provides for a three-year statute of 

limitations. S.C. Code Ann. § 39-5-150 (1985). Under the discovery rule, the 

three-year clock starts ticking on the date the injured party either knows or should 

have known by the exercise of reasonable diligence that a cause of action arises 

from wrongful conduct. Dean v. Ruscon Corp., 321 S.C. 360, 363, 468 S.E.2d 
 

 

645, 647 (1996) (citation omitted). We have carefully reviewed the record in light 

of the appropriate standard of review, and we agree with the trial court. As a 

matter of law, the only reasonable conclusion supported by the evidence at trial 

was that the existence of a claim, i.e. the deceptive and unfair nature of Janssen's 

conduct in disseminating the DDL, could not have reasonably been discovered 

prior to April 2004 when the FDA issued the Warning Letter to Janssen.21 See id. 

at 366, 468 S.E.2d at 648 (finding that where the only reasonable conclusion 

supported by the evidence was that the lawsuit accrued on a particular date, there 

was no issue for the jury to decide and a directed verdict was proper). We affirm 

the trial court's finding that the DDL claim was timely. 

We turn to the labeling claim. The procedural dilemma we confront is that the 

statute of limitations issue concerning the labeling claim was resolved at trial 

through principles of equitable tolling. A determination in equity is not proper for 

a directed verdict motion insofar as determining what matters should be submitted 

to the jury. It was therefore legal error to resolve the issue of equitable tolling 

pursuant to a directed verdict motion. Under our de novo review of this equitable 

issue, we agree with Janssen that there is an insufficient basis for application of 

that doctrine to preserve the timeliness of all labeling violations, reaching back to 

the time Risperdal was first introduced in 1994. See Hooper v. Ebenezer Sr. Servs. 

& Rehab. Ctr., 386 S.C. 108, 117, 687 S.E.2d 29, 33 (2009) (noting the doctrine of 

equitable tolling should be used sparingly and only when the interests of justice 

demand its use). However, we do not view the error as one mandating reversal and 

a new trial, given the continuing nature of the accrual of labeling violations. 

Clearly, much of the labeling claim accrued more than three years prior to the 

January 24, 2007 tolling agreement. The risks associated with atypical 

antipsychotics, like Risperdal, were becoming well known by the late 1990s. The 

State's experts testified that the Risperdal label was inadequate as early as 1994 

when Janssen began marketing the drug. By all accounts, in the early 2000s, 

evidence of the risks was pervasive.22 We find that the only reasonable conclusion 

21 Considerable argument is presented over whether the discovery rule should be 

analyzed through the person of the Attorney General or the typical approach of the 

reasonably prudent person. We need not decide the "relevant plaintiff" question 

and purported distinction between the two, for the result would be the same here. 

22 This underscores Janssen's point that the community of prescribing physicians 

was well aware of the Risperdal risks, and Janssen's resulting contention that the 
 

 

supported by the evidence is that the Attorney General knew, or most assuredly 

should have known, of potential SCUTPA violations regarding the Risperdal label 

prior to January 24, 2004. Thus, the labeling violations occurring prior to January 

24, 2004, were therefore barred by the statute of limitations. 

Nevertheless, the labeling claim presents ongoing violations of SCUTPA that 

continued after January 24, 2004 and during the three-year-period prior to the 

tolling agreement. In requesting that the entire labeling claim be dismissed as time 

barred, Janssen assumes, wrongly so, that its ability to successfully invoke the 

statute of limitations to bar the labeling claim prior to January 24, 2004, ends the 

labeling claim altogether. We reject Janssen's position, for Janssen misapprehends 

the statute of limitations and the concept of continuous accrual of this SCUTPA 

cause of action. The labeling claim presents a series of discrete, independently 

actionable wrongs that are at the core of the typical unfair trade practice action. 

The principles of this type of continuous accrual respond to 

the inequities that would arise if the expiration of the statute of 

limitations period following a first breach of duty or instance of 

misconduct were treated as sufficient to bar suit for any subsequent 

breach or misconduct; parties engaged in long-standing malfeasance 

would thereby obtain immunity in perpetuity from suit even for recent 

and ongoing malfeasance. In addition, where misfeasance is ongoing, 

a defendant's claim to repose, the principal justification underlying the 

limitations defense, is vitiated. . . . [Accordingly,] separate, recurring 

invasions of the same right can each trigger their own statute of 

limitations. . . . Generally speaking, continuous accrual applies 

whenever there is a continuing or recurring obligation: [w]hen an 

obligation or liability arises on a recurring basis, a cause of action 

accrues each time a wrongful act occurs, triggering a new limitations 

period. 

Aryeh v. Canon Bus. Solutions, Inc., 292 P.3d 871, 880 (Cal. 2013) (quotations and 

citations omitted) (distinguishing the continuous accrual doctrine from the 

continuing violation doctrine, which involves a single injury that is the product of a 

series of small harms, any one of which is not actionable on its own). See Estate of 

Livingston v. Livingston, 404 S.C. 137, 147–48, 744 S.E.2d 203, 209 (Ct. App. 

2013) (finding a new statute of limitations begins to run after each separate injury, 

allegedly deceptive practices had little or no effect on the practice and frequency of 

prescribing Risperdal. 
 

and therefore statute of limitations barred only claims falling outside the three-year 

time period and did not bar claims occurring within that time), cert. granted, No. 

2013-001505 (S.C. Sup. Ct. filed Oct. 24, 2014); see also Hogar Dulce Hogar v. 

Cmty. Dev. Comm'n of Escondido, 2 Cal. Rptr. 3d 497, 502 (Ct. App. 2003) 

("When an obligation or liability arises on a recurring basis, a cause of action 

accrues each time a wrongful act occurs, triggering a new limitations period." 

(citation omitted)); cf. Anonymous Taxpayer v. S.C. Dep't of Rev., 377 S.C. 425, 

440–41, 661 S.E.2d 73, 81 (2008) (finding that, under the facts presented, the 

particular claim alleged by plaintiff constituted only one cause of action, and 

therefore, there was no continuing injury that would trigger a new limitations 

period). 

Indeed, the language of SCUTPA itself contemplates that an unlawful method, act, 

or practice may result in multiple statutory violations, and it is the violations 

themselves that cause the statute of limitations to begin to run. S.C. Code Ann. § 

39-5-110(a) ("If a court finds that any person is willfully using or has willfully 

used a method, act or practice declared unlawful by § 39-5-20, the Attorney 

General . . . may recover on behalf of the State a civil penalty of not exceeding five 

thousand dollars per violation." (emphasis added)). We adopt the view that aligns 

with legislative intent as reflected in section 39-5-110, a common sense approach 

recognizing that the SCUTPA statute of limitations begins to run anew with each 

violation. Thus, where a claim involves a series of ongoing violations, recovery is 

limited to a period coextensive with the applicable statute of limitations. 

In sum, we agree with the State regarding the DDL claim, for we find that claim, in 

the exercise of reasonable diligence, could have been discovered no earlier than 

April 2004 when the FDA issued its warning letter to Janssen. However, we agree 

with Janssen concerning the labeling claim insofar as civil penalties were awarded 

for violations occurring from 1998 until January 24, 2004 (three years prior to the 

tolling agreement). Under these facts, it was error to award the State civil penalties 

for violations in connection with the labeling claim outside the statute of 

limitations. An award for civil penalties within the statute of limitations was 

proper. 

I. 

Preemption
 

 the labeling claim and the DDL claim are pree

y, Janssen argues the labeling claim is barred b

Janssen argues that both mpted by 

federal law. Specificall y implied 
 

 

 

 

conflict preemption and that the DDL claim is barred by the express preemption 

provision of the FDCA, 21 U.S.C. § 337(a) (2006). We disagree. 

When "Congress has 'legislated . . . in a field which the States have traditionally 

occupied,' we 'start with the assumption that the historic police powers of the States 

were not to be superseded by the Federal Act unless that was the clear and manifest 

purpose of Congress.'" Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) 

(quotations and citations omitted) (ellipses in original). 

"In 1962, Congress amended the FDCA and shifted the burden of proof from the 

FDA to the manufacturer." Wyeth, 555 U.S. at 567. "Before 1962, the [FDA] had 

to prove harm to keep a drug out of the market, but the amendments required the 

manufacturer to demonstrate that its drug was safe for use under the conditions 

prescribed, recommended, or suggested in the proposed labeling before it could 

distribute the drug." Id. (quotations and citations omitted). "In addition, the 

amendments required the manufacturer to prove the drug's effectiveness by 

introducing substantial evidence that the drug will have the effect it purports or is 

represented to have under the conditions of use prescribed, recommended, or 

suggested in the proposed labeling." Id. (quotations and citations omitted). "As 

[Congress] enlarged the FDA's powers to protect the public health and assure the 

safety, effectiveness, and reliability of drugs, Congress took care to preserve state 

law." Id. (quotations and citations omitted). "The 1962 amendments [to the 

FDCA] added a saving clause, indicating that a provision of state law would only 

be invalidated upon a direct and positive conflict with the FDCA." Id. (quotations 

and citations omitted). "Consistent with that provision, state common-law suits 

'continued unabated despite . . . FDA regulation.'" Id. (quoting Riegel v. 

Medtronic, Inc., 552 U.S. 312, 340 (2008) (Ginsburg, J., dissenting)).23 

Based upon Wyeth, we find that the State's DDL claim is not expressly preempted 

by federal law. Additionally, we find that Janssen has not preserved their implied 

conflict preemption claim for appellate review. Even assuming Janssen's argument 

regarding implied preemption is not procedurally barred, however, we find it to be 

without merit. 

23 The FDA did not have the authority to mandate a manufacturer change its label 

until amendments to the FDCA in 2007. 21 U.S.C. § 355(o)(4) (Supp. V 2011). 
1. 

Express Preemption of the DDL Claim
 

Janssen argues that the State's claim regarding the DDL relies on a single piece of 

evidence—the April 2004 DDMAC warning letter characterizing Janssen's DDL as 

"false and misleading." As such, Janssen asserts the DDL claim is based solely on 

a violation of the FDCA, which provides no private right of action. Janssen thus 

concludes that this "federal claim" is preempted and may not be maintained. 

Because Janssen's argument is based on a false premise, we disagree. 

It is true that the State pursued a SCUTPA claim based on the November 2003 

DDL. It is also true that the State introduced the April 2004 DDMAC warning 

letter as evidence in support of its DDL claim. It is not true that the sole evidence 

establishing the false and misleading nature of the DDL comes from the 

subsequent April 2004 DDMAC warning letter. Janssen not only views the DDL 

claim myopically, but conflates the concepts of evidence and claims. There was 

substantial additional evidence relating to the deception surrounding the November 

2003 DDL, much of which is noted above. For example, the State presented 

evidence that, scientific proof to the contrary, Janssen's Risperdal sales strategy 

specifically sought to differentiate Risperdal from competing drugs by 

emphasizing that Risperdal caused less weight gain relative to other atypical 

antipsychotics such as Zyprexa. 

Moreover, the State presented internal emails between Janssen executives, one of 

which included discussion of Janssen's desire to gain market share over 

competitors by avoiding being subjected to a class labeling requirement as to 

diabetes/hyperglycemia. Yet another email indicated that at least one Janssen 

scientist supported glucose screening and monitoring for Risperdal patients, but 

that such a position was "not the company line." Janssen's broad, aggressive, and 

deceptive marketing strategy resulted in the discrete DDL claim. In short, the 

record is replete with evidence beyond the 2004 DDMAC warning letter to support 

the State's DDL claim. Further, at the end of trial, the jury was charged with 

determining several factual issues, each of which was based solely on the 

provisions of SCUTPA, and the trial judge assessed penalties under SCUTPA 

framework. Accordingly, we find that the State's SCUTPA claim concerning the 

DDL is not preempted by the FDCA. 

 
 

2. 

Implied Conflict Preemption of the Labeling Claim 

Janssen argues that the State's labeling claim is barred by implied conflict 

preemption. Janssen failed to raise the doctrine of implied conflict preemption in 

its motion for summary judgment or its initial directed verdict motion at the close 

of the State's case-in-chief. Accordingly, this argument was waived because it was 

not asserted in Janssen's initial motion for directed verdict.24 See Freeman v. A. & 

M. Mobile Home Sales, Inc., 293 S.C. 255, 258–59, 359 S.E.2d 532, 535 (Ct. App. 

1987). 

Additionally, Janssen's argument on appeal is substantively different than the 

argument below. Before the trial court, Janssen moved for a directed verdict, 

arguing that the Wyeth "exception to preemption" did not apply since the State 

failed to establish that Janssen could have, and should have, updated the Risperdal 

label without prior FDA approval. Given this purported failure of proof, Janssen 

argued that the State's labeling claim was preempted. The trial court rejected 

Janssen's argument and found that Wyeth was controlling. In contrast, Janssen now 

argues that the State's SCUTPA claims sought to impose labeling requirements 

different from those required by the FDA, and thus, according to Janssen, the 

doctrine of implied conflict preemption bars the State's claims. This argument, 

however, is not preserved for appellate review. See Dunbar, 356 S.C. at 142, 587 

S.E.2d at 694 ("A party may not argue one ground at trial and an alternate ground 

on appeal." (citing Prioleau, 345 S.C. at 411, 548 S.E.2d at 216; Benton, 338 S.C. 

at 157, 526 S.E.2d at 231)). 

Nonetheless, even were we to find Janssen's argument not to be procedurally 

barred, we would find it is without merit. Janssen suggests that the State sought to 

impose labeling requirements different than those imposed by the FDA. The 

State's claim, however, did not seek to penalize Janssen for distributing its FDA24 Notably, Janssen did raise express preemption as to the DDL in its initial 

directed verdict motion. However, counsel for Janssen candidly acknowledged in 

its renewed directed verdict motion at the close of the evidence, "[W]e have an 

argument that hasn't been made by us before, and that is that the package insert 

claim, the claim dealing with the label, is preempted by federal law." Further, 

counsel for Janssen stated, "We're arguing something quite different that we 

haven't argued before. We haven't [previously] argued about Wyeth against 

Levine." 
 

approved label. Rather, the State sought civil penalties based on Janssen's actions 

in failing to discharge its ongoing, affirmative duty to keep its label updated and 

ensure "that its warnings remain adequate as long as the drug is on the market." 

Wyeth, 555 U.S. at 571 (citing 21 C.F.R. § 201.80(e); 21 C.F.R. § 314.80(b); 73 

Fed. Reg. 49605). 

Further, we reject Janssen's argument that Wyeth is inapposite because this case 

involves an enforcement action by the Attorney General on behalf of the State. 

Regardless of whether a state-law enforcement action is brought by a private 

individual or an attorney general on behalf of a state, Wyeth makes clear that 

federal labeling standards are "a floor upon which States could build" and noted 

the FDA's agency position that, "in establishing minimal standards for drug labels, 

it did not intend to preclude the states from imposing additional labeling 

requirements." Id. at 577–78 (quotations omitted). Rather, "[f]ailure-to-warn 

actions, in particular, lend force to the FDCA's premise that manufacturers, not the 

FDA, bear primary responsibility for their drug labeling at all times." Id. at 579. 

Indeed, "federal law does not give drug manufacturers an unconditional right to 

market their federally approved drug at all times with the precise label initially 

approved by the FDA." Id. at 583 (Thomas, J. concurring in the judgment). 

Janssen's claim is without merit. 

Having affirmed the trial court concerning Janssen's liability in connection with 

both the labeling claim and the DDL claim, we turn now to the penalty award.25 

25 Janssen raises a number of other issues, each of which we have carefully 

reviewed and find to be without merit or unpreserved. We affirm based upon Rule 

220(b)(1), SCACR, and the following authorities: Fields v. J. Haynes Waters 

Builders, Inc., 376 S.C. 545, 557, 658 S.E.2d 80, 86 (2008) (holding that in order 

to warrant reversal, the appealing party must show both the error of the ruling and 

resulting prejudice) (citing Fields v. Reg. Med. Ctr. Orangeburg, 363 S.C. 19, 26, 

609 S.E.2d 506, 509 (2005)); Webb v. CSX Transp., Inc., 364 S.C. 639, 655, 615 

S.E.2d 440, 449 (2005) (finding the failure to raise a contemporaneous objection at 

trial waives the right to complain about an issue on appeal) (citing Taylor v. 

Medenica, 324 S.C. 200, 214 n.9, 479 S.E.2d 35, 42 n.9 (1996)); Futch v. 

McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 

(1999) (noting that an appellate court need not address remaining issues when 

disposition of prior issues is dispositive) (citing Whiteside v. Cherokee Cnty. Sch. 

Dist. No. One, 311 S.C. 335, 340, 428 S.E.2d 886, 889 (1993)); Wilder Corp. v. 

Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) ("[A]n objection must be 
III. 

Penalty Award 

SCUTPA allows the Attorney General to recover on behalf of the State a civil 

penalty of up to $5,000 per violation. S.C. Code Ann. § 39-5-110(a). 

Undoubtedly, Janssen's deceptive conduct relating to Risperdal warrants a civil 

penalty, and because the civil penalty award under section 39-5-110(a) is within 

the discretion of the trial court, we review the trial court's penalty award under an 

abuse of discretion standard. State ex rel. McLeod v. C & L Corp., Inc., 280 S.C. 

519, 528, 313 S.E.2d 334, 340 (Ct. App. 1984) ("The party challenging a 

discretionary ruling of the trial court has the burden of showing a clear abuse of 

discretion."); accord Vanderbilt Mortg. & Fin., Inc. v. Cole, 740 S.E.2d 562, 566 

(W.Va. 2013) (holding a trial court's award of civil penalties pursuant to state 

statute will not be disturbed on appeal unless it clearly appears the trial court 

 

abused its discretion). 

The State argued, and the trial court agreed, that the distribution of each sample 

box containing the deceptive labeling, each DDL, and each follow-up sales call to 

the DDL by a Janssen representative constituted a separate SCUTPA violation. 

The trial court adopted a multi-factor test used by the United States Court of 

Appeals for the Third Circuit in determining an appropriate civil penalty: "(1) the 

good or bad faith of the defendants; (2) the injury to the public; (3) the defendant's 

ability to pay; (4) the desire to eliminate the benefits derived by a violation; and (5) 

the necessity of vindicating the authority of [the regulatory agency]." United 

States v. Reader's Digest Ass'n, Inc., 662 F.2d 955, 967 (3d Cir. 1981).26 

sufficiently specific to inform the trial court of the point being urged by the 

objector." (citation omitted)); Talley v. South Carolina Higher Educ. Tuition 

Grants Comm., 289 S.C. 483, 487, 347 S.E.2d 99, 101 (1986) ("It is an axiomatic 

rule of law that issues may not be raised for the first time on appeal." (citing Am. 

Hardware Supply Co. v. Whitmire, 278 S.C. 607, 609, 300 S.E.2d 289, 290 

(1983))); Eaddy v. Smurfit-Stone Container Corp., 355 S.C. 154, 164, 584 S.E.2d 

390, 396 (Ct. App. 2003) ("[S]hort, conclusory statements made without 

supporting authority are deemed abandoned on appeal and therefore not preserved 

for our review." (citing Glasscock, Inc. v. U.S. Fid. & Guar. Co., 348 S.C. 76, 81, 

557 S.E.2d 689, 691 (Ct. App. 2001))). 

26 Application of the Reader's Digest factors was proper here. Given that this is 

our first opportunity to address the appropriate factors for assessing a civil penalty 
 

Janssen challenges the penalty award on numerous grounds, including the 

argument that the total penalty, in excess of $327,000,000, is excessive. We agree 

with Janssen in part. There are certain factors common to the labeling and DDL 

claims. First, Janssen's deceit was substantial. In order to maintain its market 

share, Janssen's furtive efforts to mislead prescribing physicians about the risks and 

side effects associated with Risperdal were reprehensible and in callous disregard 

for the health and welfare of the public. Janssen's desire for market share and 

increased sales27 knew no bounds, leading to its egregious violation of South 

Carolina law, particularly in connection with the DDL. Janssen's conduct is 

irrefutably linked to its longstanding efforts to conceal the truth regarding 

Risperdal. This corrupt corporate culture through the years was a factor, and 

understandably so, in the trial court's imposition of such a substantial penalty. 

We agree in part with Janssen that its conduct had little impact on the community 

of prescribing physicians. The truth about the risks associated with atypical 

antipsychotics was well known, particularly in the pharmaceutical and medical 

professions. This begs the question of why Janssen would go to such lengths to 

perpetuate and defend a lie. Whatever the answer, the point remains that Janssen 

did go to such lengths. Yet, the absence of significant actual harm resulting from 

Janssen's deceptive conduct leads us to conclude the trial court erred in part in its 

penalty assessment. 

in an Attorney General directed claim under SCUTPA, we direct that, 

prospectively, the following list of non-exclusive factors be used in assessing civil 

penalties under SCUTPA: (1) the degree of culpability and good or bad faith of the 

defendant; (2) the duration of the defendant's unlawful conduct; (3) active 

concealment of information by the defendant; (4) defendant's awareness of the 

unfair or deceptive nature of their conduct; (5) prior similar conduct by the 

defendant; (6) the defendant's ability to pay; (7) the deterrence value of the 

assessed penalties; and (8) the actual impact or injury to the public resulting from 

defendant's unlawful conduct. We further authorize our able trial judges to 

consider any other factors they deem appropriate under the circumstances. In 

issuing a ruling, the trial court should make sufficient findings of fact concerning 

all relevant factors to enable appellate review. 

27 Since 1994, Risperdal sales approximated $30 billion. 
 

A. 

 Violations and Reduced Civil Penalty 

1. 

Labeling Claim 

The trial court assessed a $300 civil penalty against Janssen for each Risperdal 

"sample box" distributed to South Carolina prescribers from 1998 through the date 

of the Complaint, April 23, 2007, for a total of 509,499 violations. As discussed, 

we reverse the civil penalties awarded for conduct that occurred prior to January 

24, 2004, for that part of the State's labeling claim is barred by the statute of 

limitations. Based on the record, during the period of time from February 2004 

until the filing of the Complaint in April of 2007, Janssen made 20,575 visits to 

prescribing physicians in South Carolina and distributed 345,454 sample boxes 

containing deceptive labeling.28 

Janssen challenges the penalty award of $300 per sample box on numerous 

grounds, including the argument that the penalty is excessive. We agree and find 

the $300 penalty per sample box excessive. Based on the totality of the 

circumstances and consideration of the Reader's Digest factors, we remit the 

penalty to $100 per sample box, for a civil penalty of $34,545,400. 

2. 

DDL Claim 

Janssen mailed 7,184 DDLs to South Carolina physicians in November 2003. The 

trial court considered each letter a separate violation and imposed a penalty of 

$4,000 per letter, for a penalty of $28,736,000. In addition, the trial court counted 

each follow-up sales call to the DDL by a Janssen representative as a separate 

violation. There were 36,372 follow-up sales calls. The trial court again assessed 

a penalty of $4,000 for each sales call, for a penalty of $145,488,000. 

Janssen challenges the penalty award on numerous grounds, including 

excessiveness. While the question presented is close, we cannot say that the trial 

28 We arrive at this number based on documents submitted by Janssen showing the 

total samples distributed and the total number of visits to prescribing physicians. 

(20,575 visits times 16.79 sample boxes per visit equals a total of 345,454.25 

sample boxes, rounded to 345,454). 
court abused its discretion in assessing the $28,736,000 penalty associated with the 

7,184 DDLs. A $4,000 penalty per each DDL is indeed substantial. But Janssen's 

deceit, as described above, was also substantial. The DDL was especially 

egregious, for it represented not mere nondisclosure but a corporately sanctioned 

decision to affirmatively lie and an attempt to mislead the medical community. 

We affirm the civil penalty of $28,736,000 penalty associated with the 7,184 

DDLs. 

Janssen's misconduct in the more than 36,000 follow-up visits may be similarly 

viewed, for the follow-up visits were designed to continue the false DDL narrative. 

Nevertheless, a penalty of $4,000 per follow-up visit is excessive as a matter of 

law under the circumstances. We find in most instances, these were follow-up 

calls to the same prescribing physicians who received the DDL in the mail. In fact, 

in many instances there were multiple calls to the same physicians. We remit the 

penalty to $2,000 per follow-up sales call, for a penalty of $72,744,000. When 

combined with the penalty for the DDL mailing, the total penalty assessed against 

Janssen for the DDL claim is $101,480,000. 

The combined civil penalty for the labeling and DDL claims is $136,025,400. 

B. 

Constitutionality of the Penalty Award 

Janssen also raises a number of constitutional challenges to the trial court's penalty 

order. First, Janssen claims that the $327 million penalty violates the Excessive 

Fines Clause of the Eighth Amendment to the U.S. Constitution and Article 1, 

Section 15 of the South Carolina Constitution. Second, Janssen claims that the 

penalty award violates due process because it is grossly excessive. We analyze 

this argument on the basis of the remitted penalty of approximately $136 million. 

We find no constitutional violation. 

"The touchstone of the constitutional inquiry under the Excessive Fines Clause [of 

the U.S. Constitution] is the principle of proportionality: The amount of the 

forfeiture must bear some relationship to the gravity of the offense that it is 

designed to punish." United States v. Bajakajian, 524 U.S. 321, 334 (1998); see 

also Medlock v. One 1985 Jeep Cherokee VIN 1JCWB7828FT129001, 322 S.C. 

127, 132, 470 S.E.2d 373, 377 (1996) (adopting the federal "instrumentality" 

standard in the context of civil forfeitures for purposes of South Carolina's 

"excessive fines" analysis). The Court will only find a violation of the Excessive 
Fines Clause if the penalty is "grossly disproportional to the gravity of a 

defendant's offense." Bajakajian, 524 U.S. at 334 (emphasis added). "The Ninth 

Circuit and other federal courts have consistently found that civil penalty awards in 

which the amount of the award is less than the statutory maximum do not run afoul 

of the Excessive Fines Clause." United States v. Mackby, 221 F. Supp. 2d 1106, 

1110 (N.D. Cal. 2002) (citing cases from the First Circuit, Ninth Circuit, and D.C. 

Circuit). This is so because legislative pronouncements regarding the proper range 

of fines "represent the collective opinion of the American people as to what is and 

is not excessive. Given that excessiveness is a highly subjective judgment, the 

courts should be hesitant to substitute their opinion for that of the people." United 

States v. 817 N.E. 29th Drive, Wilton Manors, Fla., 175 F.3d 1304, 1309 (11th Cir. 

1999) (citing Bajakajian, 524 U.S. at 336). 

We find that the penalty in this case, now reduced, bears a rational relationship to 

the gravity of Janssen's conduct in perpetuating a marketing scheme in South 

Carolina designed to be unfair and deceptive under our law. Furthermore, the 

penalty awards per violation are within the range set by the legislature in enacting 

SCUTPA. Accordingly, the penalty award is not grossly disproportionate to 

Janssen's pattern of unfair and deceptive behavior, and, thus, we hold that the 

award does not violate the Excessive Fines Clause of the South Carolina or the 

United States Constitution. We turn now to Janssen's due process argument. 

The Due Process Clause of the U.S. Constitution "places a limitation upon the 

power of the states to prescribe penalties for violations of their laws . . . ." St. 

Louis, Iron Mt. & S. Ry. Co. v. Williams, 251 U.S. 63, 66 (1919). States, however, 

"still possess a wide latitude of discretion in the matter, and . . . their enactments 

transcend the limitation only where the penalty prescribed is so severe and 

oppressive as to be wholly disproportioned to the offense and obviously 

unreasonable." Id. at 66–67 (citations omitted); see also Shipman v. Du Pre, 222 

S.C. 475, 480, 73 S.E.2d 716, 718 (1952) (embracing the Williams standard). 

Given the evidence that demonstrates Janssen's pattern of unfair and deceptive 

behavior, we find that the penalties in this case are not violative of the Due Process 

Clause. We decline to set forth a bright-line rule or ratio to delineate what level of 

penalties are appropriate, instead undertaking a case-by-case determination based 

on the severity of the underlying conduct. While the penalty award against Janssen 

is quite large, the penalty must be analyzed in context in view of the clear 

legislative intent of SCUTPA to deter unfair and deceptive behavior in the conduct 
 

of trade and commerce in South Carolina. When all factors are considered, we 

find that the penalty award does not violate the Due Process Clause. 

And finally, we comment on the amicus curiae brief filed by the South Carolina 

Chamber of Commerce. The Chamber seeks clarity from this Court to provide a 

predictable and favorable business climate in this state. The Chamber is especially 

distressed by the $327 million penalty, which it views as excessive and as "overt 

hostility toward business." While we agree the penalty awarded by the trial court 

was excessive, the Chamber's additional concerns are based on a series of false 

premises. The Chamber posits that Janssen's conduct is being "judged according to 

subjective, intangible standards." More to the point, the implication is that South 

Carolina stands alone in arbitrarily singling-out Janssen for what amounts to 

nothing more than an aggressive marketing strategy. That is simply not the case. 

Because of its deceptive conduct in the marketing of Risperdal, Janssen has been 

the subject of litigation throughout the country. Indeed, the deceptive marketing 

that gave rise to this action also formed the basis of federal civil and criminal 

claims against Janssen and its parent company; the federal litigation has thus far 

resulted in agreed upon penalties in excess of $2 billion. When viewed 

objectively, Janssen over the course of many years consciously engaged in lies and 

deception in the marketing of Risperdal. Thus, the suggestion that the Attorney 

General of South Carolina stands alone in pursuing amorphous and subjective 

claims against Janssen is without merit. Surely the Chamber desires a legal system 

that honors the rule of law and one which does not insulate businesses from 

liability for unfair and deceptive practices. Our decision today is faithful to 

objective legal principles, legislative intent in SCUTPA and the rule of law. 

Moreover, we have set forth clear guidance for the business community, the Bench 

and the Bar for determining what conduct is actionable under SCUTPA and what 

factors bear on the determination of an appropriate penalty—precisely the type of 

clarity the Chamber seeks. 
 

IV. 

Conclusion 

Based on the statute of limitations, we reverse the judgment on labeling claim to 

the extent the trial court awarded civil penalties for conduct prior to January 24, 

2004. We otherwise affirm as modified the judgment on the labeling claim and 

remit the civil penalty to $34,545,400. We affirm the liability judgment on the 

DDL claim, but remit those civil penalties to $101,480,000. We remand to the trial 

court for entry of judgment in the amount of $136,025,400. 

AFFIRMED IN PART, REVERSED IN PART AND REMANDED. 

TOAL, C.J., BEATTY, and HEARN, JJ., concur. PLEICONES, J., dissenting 

in a separate opinion. 
 

JUSTICE PLEICONES: With great respect for the majority's thorough treatment 

of these complex issues, I dissent from those portions of its opinion addressing: (1) 

the timeliness of the labeling claim; and (2) the reduction of the DDL penalty 

award. 

I. Statute of Limitations 

I agree the Attorney General knew or should have known prior to January 24, 2004 

that he may have had a SCUTPA claim against Janssen based, in part, on research 

indicating Janssen's Risperdal label misled consumers insofar as it failed to 

disclose the drug's side effects. See Kreutner v. David, 320 S.C. 283, 285–86, 465 

S.E.2d 88, 90 (1995) (discussing the discovery rule for purposes of triggering the 

limitations period and finding that where the evidence is overwhelming a 

reasonable person should have known she might have a claim at a time beyond the 

statute of limitations, then such claim is time-barred). I therefore agree with the 

majority's conclusion that the Attorney General's SCUTPA claim for labeling 

violations occurring before January 24, 2004 was time-barred, and that the trial 

judge erred in holding equitable tolling removed the bar. 

My disagreement is with the majority's application of the continuous accrual 

doctrine. I would not apply the doctrine in this appeal because doing so does not 

affirm the statute of limitations ruling to the extent the trial judge found the preJanuary 24, 2004 labeling claim timely and permitted that claim to go to the jury. 

In my opinion, we may invoke our authority to affirm on any ground appearing in 

the record only when the result is to affirm the trial judge's ruling in toto. See Rule 

220(c), SCACR. Here, the effect of applying the continuous accrual doctrine is 

only a partial affirmance. Further, we have no way of knowing whether the jury's 

liability determination was based on conduct outside the limitations period since 

we cannot know whether this jury would have found a SCUTPA violation had it 

considered only Janssen's labeling conduct after January 24, 2004. I do not agree 

that reducing the amount of the penalty for the labeling claim cures the prejudice to 

Janssen given the unreliability of the jury's liability determination. Thus, I 

respectfully submit we should not apply the continuous accrual doctrine29 in this 

appeal as doing so prejudices Janssen. 

Accordingly, I would reverse the jury's finding of liability because the labeling 

29 I leave for another day whether we should adopt this doctrine in the context of 

SCUTPA or other statutory claims. 
 

 

 

claim is barred by the statute of limitations. I would also reverse the trial judge's 

labeling claim penalty because the claim is untimely. 

DDL Penalty Award 

As for the reduction of the DDL penalty award, I would find the trial judge did not 

abuse his discretion in awarding $174,224,000 based on Janssen mailing 7,184 

deceptive DDLs and following up with 36,372 sales calls to sanction the deception 

already perpetrated. See State ex rel. McLeod v. C & L Corp., 280 S.C. 519, 528, 

313 S.E.2d 334, 340 (Ct. App. 1984) (reviewing the award of civil penalties under 

an abuse of discretion standard). As for Janssen's contention that the follow-up 

sales calls were made to the same prescribing physicians who had already received 

the DDL, I would find the trial judge properly considered this argument and 

exercised his discretion in finding Janssen's culpability (Reader's Digest30 Factor 2) 

outweighed the actual impact or injury resulting from Janssen's unlawful conduct 

(Reader's Digest Factor 8). 

Ultimately, the trial judge was in the best position to evaluate Janssen's conduct, 

the degree of culpability, the duration of Janssen's conduct, Janssen's active 

concealment of Risperdal's side effects to South Carolina health care providers, 

Janssen's awareness of its deceptive conduct, Janssen's ability to pay, and the 

actual impact, if any, resulting from Janssen's deceptive conduct. See Reader's 

Digest Ass'n, 662 F.2d at 967. Based on the trial judge's articulation of the 

Reader's Digest factors and his proper consideration of those factors, I would find 

Janssen has not shown the court abused its discretion in awarding a $174,224,000 

civil penalty for the DDL claim, an amount within the limits set forth in SCUTPA. 

See Wallace v. Timmons, 237 S.C. 411, 421, 117 S.E.2d 567, 572 (1960) (stating 

that in reviewing a trial judge's decision under an abuse of discretion standard, this 

Court may not substitute its judgment simply because it might have reached a 

different conclusion had it been in the trial judge's place). Therefore, I would 

affirm the trial judge's penalty award of $174,224,000 as to the DDL claim. 

30 United States v. Reader's Digest Ass'n, 662 F.2d 955, 967 (3d Cir. 1981) 

(outlining the multi-factor analysis to determine the propriety of a statutory 

penalty, which the trial judge applied, the majority has adopted, and with which I 

concur).