Punitive Damages: Is the cause generating the effect?

Defective Drugs
Punitive Damages

The recent eye catching $150 million verdict in the AbbVie AndroGel lawsuit as well as today's $417 million jury verdict against Johnson & Johnson in the first California talcum powder/ovarian cancer trial have brought the public’s attention back to punitive damages. Punitive damages play a very significant role when it comes to mass torts, where numerous people can be affected by the same product due to a defect or the failure to adequately warn consumers or a side effect. On one hand, these verdicts are attracting attention as they are announced by the courts to penalize the wrongdoers. On the other hand, some manufacturers continue their efforts to aggressively advertise their product as a safe option while downplaying or ignoring the serious risks.

Punitive Damages...what is it?

Punitive damages can be awarded by the jury in addition to the actual damage in a civil lawsuit to punish the defendant for particularly egregious intentional or reckless conduct that risked the lives of victims. Such damages are intended to punish the wrongdoer and to warn others from engaging in similar conduct.

A Few Milestone Verdicts...a quick recap

This April, a Pennsylvania state jury announced a $20 million verdict over injuries caused by a vaginal mesh implant made by Ethicon, a subsidiary of Johnson & Johnson (J&J). $17.5 million of that award was in punitive damages. This was the highest amount (of punitive damages) awarded in transvaginal mesh cases. Two previous mesh lawsuits had awarded $10 million and $7 million in punitive damages

In April 2014, another milestone verdict of $9 billion punitive damages was announced against defendants Takeda Pharmaceuticals and Eli Lilly for their anti-diabetic drug, Actos, by a furious jury in a bellwether personal injury trial. However, this amount was reduced to $36 million by the judge. In that case, the jury wanted to teach the defendants a serious lesson by declaring punitive damages of more than 6,000 times the compensatory damages amount.

In February 2014, Takeda Pharmaceuticals was ordered to pay $1.34 million in punitive damages based on the evidence of wrongdoing involving Actos. The fact that the manufacturer made more than $20 billion in sales from 2000 to 2012, without warning about the link between Actos and bladder cancer was the driving factor for this verdict.

J&J was also ordered to pay $105 million in punitive damages, approximating 20 times the compensatory amount of $5.4 million in a recent talcum powder lawsuit. In that case, the victim alleged that J&Js talcum powder had caused her ovarian cancer. That verdict followed the $62 million and $50 million punitive damage award J&J was ordered to pay earlier in two earlier talcum powder/ovarian cancer cases.

Punitive damage: A strong message but is it getting across?

In the above cases, it is evident that the juries wanted to send a strong message to the drug/device manufacturers. However, with respect to J&J’s talcum powder, there has neither been any recall of the product nor any warning update on the label by the company, despite the huge verdicts as well as research linking talc usage in the genital area to ovarian cancer. Even with thousands of pending lawsuits, J&J has not changed the label and continue to defend its actions in court.

In a few cases, the drug and device manufacturers have issued safety warnings or stronger black box warnings to the labels – in some cases as required by the FDA. However, such warnings are rare and in many cases, the damage has already been done.

In All Its Fairness

Different rules apply in each state as well as precedent from the US Supreme Court which may limit the amount of punitive damages that a jury can award. Fairness and consistency should be the prime parameters while deciding the amount. However, there is no mathematical formula or any concrete constitutional standard that can easily be applied.

A Dense Maze: Punitive Damages

The nature of punitive damage is such that it can force a company into bankruptcy, especially when it comes to mass torts that involve thousands of lawsuits. Generally, most of the punitive damages are either reduced or eliminated on appeal.

This article was submitted by Neural IT. Neural IT provides cost effective and timely medical reviews for screening potential mass tort cases. For more information, please visit www.neuralit.com. You may email them at [email protected] or call +1-844-NIT-TEAM (648-8326).

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