Monday, October 15, 2007
A jury in Reno today lashed Wyeth with a $99 million punitive damages verdict in a three-plaintiff Prempro lawsuit in Nevada state court. The massive award was predictable given how events unfolded in the case last week. On Wednesday, the jury rendered a compensatory damages verdict totaling $134.5 million. When Judge Robert Perry learned that the jury was confused about compensatory and punitive damages, he ordered the jury to reconsider the amounts, and the jury came back with a total compensation verdict of $35 million. Today, the jury returned to consider punitive damages, and unsurprisingly hit Wyeth with essentially the same amount it had intended as punishment last week. An AP story on the Houston Chronicle website -- Punitive Damages Awarded in Wyeth Case -- reports on today's punitive damages verdict:
Jurors awarded $99 million in punitive damages Monday to three Nevada women who claimed hormone replacement drugs distributed by pharmaceutical giant Wyeth caused their breast cancer. A Wyeth attorney said the award would be appealed. ...
After lawyers for both sides gave closing arguments again on Monday, the judge instructed the five-man, two-women jury to move to the punitive stage of the trial to consider whether the company's actions were so "reprehensible" that additional damages were warranted to punish it and discourage such behavior in the future. ...
The jurors returned at 1 p.m. Monday, two hours after they began deliberations following an impassioned plea by one of the plaintiffs' lawyers to return a large enough judgment to "get the attention and hold responsible" a company with a net worth of $14.6 billion.
Friday, October 12, 2007
If Wednesday's verdicts in the Nevada Prempro case seemed implausibly large for compensatory damages, here's the explanation: the jury was confused about the difference between compensation and punitive damages. Although for now, this means a substantial reduction in the verdicts, under the circumstances it cannot be considered good news for Wyeth.
According to this Reno Gazette-Journal article -- Jurors to reconsider Prempro damages -- the judge instructed the jury to reconsider its damages calculations:
Jurors in the Wyeth trial were sent back to the jury room this morning to reconsider the amount of damages the company must pay after they told the judge that they were confused about punitive damages when they ordered the company to pay millions on Wednesday.
The jurors told Judge Robert Perry that they included punitive damages in the total they awarded three women who had sued Wyeth, claiming its hormone replacement drugs caused their breast cancer.
... After learning of the confusion, Perry sent the jury back and said they must first recalculate the past and future damages, and then said he would hold a hearing with witnesses before the panel would decide punitive damages.
Later today, an article by AP writer Sandra Chereb -- Jury Cuts $100M From Award Against Wyeth -- reported that upon reconsideration, the jury reduced the total verdicts from $134.5 million to $35 million:
A jury on Friday slashed $100 million from a judgment against pharmaceutical giant Wyeth after it conceded a previous award was improper because it was intended to punish the company for its hormone replacement drugs. Washoe District Judge Robert Perry instructed the five-man, two-woman jury to reconsider a $134.5 million compensatory award issued Wednesday after questions were raised about whether the judgment included punitive damages. Perry said the matter was brought to his attention by a bailiff, who overheard discussion in the jury room. "If we don't correct it now, we'll be trying this case again," the judge said. After deliberating for about three hours, jurors on Friday awarded $35 million to three Nevada women for past and future medical expenses, as well as physical and emotional pain and suffering. ...
Perry twice denied a motion by Wyeth lawyer Dan Webb to declare a mistrial over the jury's confusion. Webb argued that jurors were predisposed to punish the company before the punitive phase of the trial had begun. The judge said jurors raised questions expressing their confusion during the initial deliberations, but Wyeth lawyers wouldn't allow an explanation. ...
The revised compensatory damage verdicts include $10.5 million for Jeraldine Scofield, $12 million for Arlene Rowatt, and $12.5 million for Pamela Forrester. The jury will return Monday to decide whether to impose punitive damages. Given the jury's premature attempt to punish Wyeth with an extra $100 million or so, there cannot be much doubt about how the punitive damages phase will turn out next week.
Thursday, September 13, 2007
I had the pleasure of attending and participating last Friday, September 7, in the Charleston Law School conference, entitled, "Punitive Damages, Due Process, and Deterrence: The Debate After Philip Morris v. Williams." The conference included top national experts on punitive damages, as well as counsel in Williams, and was very well attended, with likely upwards of two hundred people. As Professor Michael Rustad of Suffolk Law School noted, if the conference is any indication of the trajectory of recently founded Charleston Law School, it will "rise like an arrow."
Look for the symposium issue from the Charleston Law Review, which will include publication of transcripts and articles from the conference.
Sunday, August 12, 2007
As I've posted before, there is an upcoming symposium on September 7 at at Charleston Law School in South Carolina on Punitive Damages, Due Process, and Deterrence: the Debate After Philip Morris v. Williams Download charleston_law_school_conference_brochure.pdf. In advance of that conference, I thought I'd link Richard Epstein's interesting February 2007 Federalist Society audio commentary on the Williams case.
Wednesday, June 13, 2007
On September 7, 2007, Charleston Law School will host a conference: Punitive Damages, Due Process, and Deterrence: The Debate After Philip Morris v. WIlliams.
Speakers and moderators at the conference include Theodore Boutrous (Gibson Dunn), Elizabeth Cabraser (Lieff, Cabraser), Robin Conrad (U.S. Chamber of Commerce), Theodore Eisenberg (Cornell), Anthony J. Franze (Arnold & Porter), Andrew Frey (Mayer Brown), Murray Garnick (Arnold & Porter), Lauren Rosenblum Goldman (Mayer Brown), John Gotanda (Villanova), Laura Hines (Kansas), Keith Hylton (Boston), John Mulderig (Altria), Robert Peck (Center for Constitutional Litigation), Terry E. Richardson (Richardson, Patrick), Steven Rissman (Altria), Christopher Robinette (Widener), Michael Rustad (Suffolk), Sheila Scheuerman (Charleston), Victor Schwartz (Shook, Hardy), Anthony Sebok (Brooklyn), Neil Vidmar (Duke), and Judge William Wilkins (Fourth Circuit). I will be moderating a panel on "The Relationship Between Punitive Damages and Class Actions."
Tuesday, April 17, 2007
Charleston Law School Conference on Punitive Damages, Due Process, and Deterrence -- The Debate After Williams
On Friday, September 7, 2007, Charleston School of Law is hosting a conference entitled, "Punitive Damages, Due Process, and Deterrence: The Debate After Williams." Confirmed panelists include Theodore Boutrous (Gibson Dunn), Elizabeth Cabraser (Lieff Cabraser), Robin Conrad (US Chamber of Commerce), Thoedore Eisenberg (Cornell), Andrew Frey (Mayer, Brown), Murray Garnick (Arnold & Porter), Lauren Rosenblum Goldman (Mayer, Brown), John Gotanda (Villanova), Laura Hines (Kansas), Keith Hylton (Boston U.), John Mulderig (Altria), Robert Peck (Center for Constitutional Litigation), Steve Rissman (Altria), Michael Rustad (Suffolk), Victor Schwartz (Shook, Hardy), Anthony Sebok (Brooklyn), Catherine Sharkey (Columbia), Neil Vidmar (Duke), and Judge William Wilkins (4th Cir.). I will be the moderator for a panel on the relationship between punitive damages and class actions. The conference chair is Professor Sheila Scheuerman of Charleston School of Law.
Tuesday, April 3, 2007
Interesting article posted on SSRN -- A Cap on the Defendant's Appeal Bond?: Punitive Damages Tort Reform, by Professor Doug Rendleman of Washington & Lee School of Law. Here's the abstract:
The defendant's supersedeas or appeal bond was a servile drudge of appellate procedure until enormous punitive damages verdicts catapulted it out of local courthouses into headlines. From the verdict that exceeded $10 billion in Pennzoil v. Texaco in the 1980s to the punitive damages verdict of $145 billion in Engle v. Liggett Group that was reversed in the summer of 2006, appeal bonds have played a crucial role in huge-verdict litigation. This article's topic - tort reform statutes that cap an appeal bond - stemmed from punitive damages verdicts in smokers' trials against tobacco companies.
Beginning with appellate procedure, the article traces the appeal bond through related topics: federal abstention, bankruptcy, the arguments for and against state tort-reform statutes that cap an appeal bond, and state and federal constitutional doctrines, including the United States Constitution's Full Faith and Credit Clause.
Since constitutions neither compel nor forbid a limited appeal bond, the author resolved that the decision to cap or not to cap resides in the legislature's realm of evaluating public policy. The appeal bond cap's function of facilitating the defendant's entryway to the appellate court whose warranty is a crucial imprimatur for accurate and legitimate judicial decisionmaking convinced the author to commend a cap of $25 to $50 million for a defendant's appeal bond on a jury's verdict for punitive damages.
Tuesday, March 13, 2007
In the retrial of the Humeston Vioxx case in New Jersey, the jury yesterday afternoon found Merck liable for punitive damages, adding $27.5 million of punitives to the $20 million compensatory damages verdict it had rendered earlier in the day. Here are excerpts from the AP story in the Houston Chronicle -- Vioxx Jury Awards $47.5M to Idaho Couple:
Merck & Co.'s painkiller Vioxx contributed to an Idaho postal worker's heart attack, a jury in Atlantic City ruled Monday, reversing the verdict in the man's first trial and hitting Merck with a total of $47.5 million in damages.
In one of Merck's biggest losses over the drug so far, the jurors awarded the man and his wife $20 million in compensatory damages Monday morning, then later said Merck should pay $27.5 million in punitive damages.
The jurors, after deliberating for about five hours over two days, awarded Humeston $18 million in compensatory damages for pain and suffering and gave $2 million to his wife, Mary. Then, after brief arguments over punitive damages, the jury deliberated briefly late Monday afternoon and decided to assess $27.5 million in punitive damages against Merck.
Humeston lost his first trial against the pharmaceutical giant in 2005, but New Jersey Superior Court Judge Carol Higbee granted him a second trial because new evidence surfaced that short-term Vioxx use could also be risky; Humeston took the drug on and off for about two months. Merck insists Vioxx didn't increase cardiac risks until after 18 months of use, but many doctors say research disproves that.
Wednesday, February 21, 2007
Yesterday, the Supreme Court struck down the $79.5 million punitive damages award in the Oregon tobacco wrongful death case of Mayola Williams v. Philip Morris. Here's the story in the Chicago Tribune about the 5-4 decision. The Supreme Court's opinion did not decide whether the amount of punitive damages was unconstitutionally excessive as a multiple of compensatory damages. In other words, we still don't know just how strictly the Court will apply the single-digit multiple standard of State Farm v. Campbell -- an issue of great practical significance in punitive damages cases. But in the Williams case, the Supreme Court did address the punitive damages issue most applicable to mass torts, ruling that a jury may punish a defendant only for harm to the actual litigant, not for harm to others.
Today's New York Times ran an editorial criticizing the ruling as "a win for corporate wrongdoers." The Times may well be correct that this Supreme Court "is more concerned about — and more willing to protect — the powerful than the powerless." The editorial contrasts the Court's narrow view of 8th Amendment protection for criminal defendants with its use of the due process clause to protect corporate defendants from punitive damages. But on the core issue decided in the Williams case, isn't the Times missing the point?
[T]he court ruled that the award was improper because it punished Philip Morris for harm done to people who were not part of the lawsuit. There is nothing unusual, or wrong, about courts considering the broader impact of a wrongdoer’s misdeeds. As Justice John Paul Stevens noted in dissent, “A murderer who kills his victim by throwing a bomb that injures dozens of bystanders should be punished more severely than one who harms no one other than his intended victim.” The fact that Philip Morris hurt so many other smokers along with Jesse Williams is surely relevant to its punishment.
The editorial makes it seem like the question is how much a defendant should be punished for its wrongdoing. But this was not a criminal case or a government proceeding for a civil fine. Nor was it a class action or other multi-plaintiff litigation. It was a civil lawsuit brought by an individual plaintiff. The question is whether an individual litigant is entitled to collect punitive damages for harm to others. Ultimately, that's a question of aggregation: Is it permissible to aggregate the amount of punitive damages on the defendant side, without aggregating the distribution of punitive damages on the plaintiff side? If the goal is to punish a defendant for its harm to multiple victims -- and if we're looking to private civil litigation rather than to government proceedings -- doesn't it make more sense to accomplish this by collective litigation in which the claims of multiple victims can be resolved, rather than by permitting an individual to receive collective punitive damages?
Tuesday, January 30, 2007
In the Prempro trial of Mary Daniel v. Wyeth, the jury yesterday rendered a verdict for the plaintiffs for $1.5 million in compensatory damages and finding a basis to move to a punitive damages phase, but today the judge ruled as a matter of law that the evidence was insufficient to hold Wyeth liable for punitive damages. In an interesting twist, however, the judge apparently has decided to allow the jury to hear the evidence on punitives and to render a verdict -- under seal -- in case her ruling is reversed on appeal. Here's an excerpt from the Reuters report by Jon Hurdle:
A judge on Tuesday agreed with Wyeth that there was insufficient evidence for a jury to find that the drugmaker acted recklessly in marketing its Prempro hormone replacement therapy, but allowed the punitive damage phase of the trial to proceed pending an appeal of the ruling.
However, Philadelphia Court of Common Pleas Judge Myrna Field ordered that any punitive damage award will not be made public unless an appeals court overturns her ruling.
A jury on Monday found that Wyeth failed to properly warn about the cancer risks associated with Prempro and that the drug was responsible for plaintiff Mary Daniel's breast cancer. It awarded Daniel and her husband some $1.5 million in compensatory damages.
The jury also found that Wyeth's conduct was malicious or showed reckless indifference, a finding that under Pennsylvania law would send the jury back to determine additional punitive damages to be paid by the Madison, New Jersey-based company.
While Field ruled in Wyeth's favor, effectively setting aside that part of the jury's verdict -- a ruling that would limit Wyeth's liability to the $1.5 million -- she agreed to allow punitive damages deliberations to proceed under seal after Daniel's attorneys said they would appeal the ruling.
The judge accepted arguments by lawyers for the plaintiff that a decision by an appeals court to overturn her ruling would necessitate a new trial, and that to keep costs down the jury should be allowed to come up with a punitive damages figure that would be kept under wraps, but could be used by the appeals court if necessary.
As a matter of judicial process, it's comparable to the granting of a renewed motion for judgment as a matter of law (JNOV) after denying the initial motion and allowing the jury to deliberate. The goal is to avoid the inefficiency of a retrial in the event of appellate reversal of the legal ruling. But Judge Field's action presents two twists on the usual situation. First, the judge announced her ruling to the lawyers before proceeding to the punitive damages phase. Even if a judge knows that she intends to grant JNOV, it must be rare for the judge to announce that intention before the jury deliberates, much less before the lawyers present the final round of evidence. Second, the judge apparently ordered that the final phase and the jury's verdict be conducted under seal. Ordinarily, the trial and verdict would be accessible to the public even if the judge chooses to grant JNOV.
Friday, December 22, 2006
Article in the New York Times -- Court Cuts Valdez Judgment Against Exxon, by the Associated Press:
A federal appeals court on Friday cut in half a $5 billion jury award for punitive damages against Exxon Mobil Corp. in the 1989 Valdez oil spill that smeared black goo across roughly 1,500 miles of Alaskan coastline.
The case, one of the nation's longest-running, non-criminal legal disputes, stems from a 1994 decision by an Anchorage jury to award the punitive damages to 34,000 fishermen and other Alaskans. Their property and livelihoods were harmed when the Valdez oil tanker struck a charted reef, spilled 11 million gallons of crude oil.
It's the third time the 9th U.S. Circuit Court of Appeals court ordered the Anchorage court to reduce the $5 billion award, the nation's largest at the time, saying it was unconstitutionally excessive considering U.S. Supreme Court precedent.
This time, in its 2-1 decision, the court ordered a specific amount in damages, while its previous rulings demanded a lower court to come up with its own figures.
Thursday, November 2, 2006
Torts gone wild: Justices risk sending the wrong message in a 'hard case' concerning punitive-damage awards
Editorial from today's Los Angeles Times -- Torts gone wild: Justices risk sending the wrong message in a 'hard case' concerning punitive-damage awards. Perhaps it's indicative of a shift in popular opinion that the L.A. Times would urge the overturning of a huge punitive damages verdict against a tobacco company and also tangentially note that the plaintiff in the case "had disregarded warnings from his family about the risks of smoking." Here's an excerpt:
After Oregon's highest court affirmed the jury verdict against Philip Morris, the U.S. Supreme Court asked lawyers for the company and Mrs. Williams to address two questions. One was whether Philip Morris' "reprehensible" conduct overrode the requirement that punitive damages bear a reasonable relation to actual damages. The other was whether the Constitution allows a jury in a case brought by one individual to punish the defendant for the effects of its conduct on others.
Both questions seem like no-brainers in light of past decisions about the need for punitive damages to bear a reasonable relationship to proven harm. Yet during oral arguments Tuesday, several justices seemed to suggest that ambiguities in the record — such as whether the Oregon Supreme Court had concluded that punitive damages could be based on harm to non-parties — might require returning the case to lower courts.
Punting the case would be a terrible idea. As this lawsuit demonstrates, many lower courts are uncomfortable with the Supreme Court's efforts to curb outlandish punitive-damage awards. An inconclusive ruling would embolden those courts in their resistance. It also would encourage speculation that recent changes in the high court's membership have undermined its punitive-damage precedents. Two of the six justices in the majority in the 2003 ruling, the late Chief Justice William H. Rehnquist and Sandra Day O'Connor, are no longer on the court.
Huge awards in individual lawsuits — as opposed to sensible legislation — are not the best way to curb smoking, obesity, gun violence and other threats to public health. The Supreme Court should see through the smoke screen of this "hard" case and say that.