A number of medical devices are under siege in US courtrooms. One especially large set of cases involves injuries allegedly resulting from the use of surgical mesh to treat pelvic organ prolapse and stress urinary incontinence. An astonishing 85,000 cases against surgical mesh manufacturers have been centralised for pre-trial proceedings in federal district court in West Virginia and thousands of additional cases have been filed in state courts. As is inevitable with so many turns of the roulette wheel, some plaintiffs have hit the jackpot.
The biggest verdict so far came in May 2015, when a Delaware jury returned a $100 million award against Boston Scientific – comprising $25 million in compensatory damages and $75 million in punitive damages. In an October 9 2015 order, the trial court in Barbra v Boston Scientific Corpreduced the verdict by a factor of 10, leaving Boston Scientific facing a judgment of $2.5 million in compensatory damages and $7.5 million in punitive damages. While this was clearly a substantial improvement, the reduced award remains excessive.
First, even if Boston Scientific faced no other lawsuits, the 3:1 ratio would exceed the constitutional maximum given the magnitude of the compensatory damages. The Supreme Court has stated that when compensatory damages are "substantial", a 1:1 ratio between the penalty and the harm to the plaintiff generally marks the "outermost limit of the due process guarantee". Here the reduced compensatory award is quite large, making a 3:1 ratio excessive in all but the most unusual cases. Yet nothing in the court's opinion suggests that an exceptionally large award of punitive damages is justified in this case.
Moreover, in reality the ratio between the punitive damages and the plaintiff's harm is probably even higher than 3:1, because the remitted compensatory award appears to be inflated. Although the plaintiff claimed residual effects from her injury and was also entitled to some compensation for pain and suffering, she had:
- incurred only $45,259.90 in medical expenses;
- received no medical treatment in over four years; and
- claimed no future medical expenses or lost wages.
Given those unremarkable facts, the jury's $25 million compensatory award was an obvious outlier lacking any apparent connection to the evidence. Nevertheless, the trial court deferred to it – remitting the compensatory damages not to "what an objectively reasonable jury might have determined", but to "the high end of the spectrum of reasonableness". Further, because the court maintained the 3:1 ratio that the jury adopted, its leniency in reviewing the compensatory award was reproduced and magnified in the punitive award.
Assume, for example, that a reasonable jury unaffected by passion and prejudice would have set the compensatory damages at $1 million. That would make the ratio between the actual harm and remitted punishment 7.5:1. If the excess compensation contained in the remitted award were counted as part of the punishment, the ratio would be 9:1. This illustrates that courts must be particularly stringent in applying the ratio guidepost when the real measure of the plaintiff's damages is uncertain. The trial court here did not do so, instead simply multiplying by three a compensatory award that it acknowledged was already at the "high end" of reasonableness.
The 3:1 ratio approved by the trial court is all the more unreasonable because Boston Scientific faces thousands of similar lawsuits – approximately 25,000, according to reports. The trial court concluded that "[p]unitive damages are warranted in this case in order to punish Boston Scientific and deter it from permitting other products to enter the market without first taking steps to ensure the products safety and efficacy". There is no indication in the order that when it decided that a $7.5 million penalty could be imposed, the trial court considered the deterrent and punitive impact of thousands of other lawsuits predicated on the same course of conduct.
The Supreme Court's decision in Philip Morris v Williams provides a theoretical framework that can be used to determine the maximum appropriate punishment when a defendant has been sued multiple times for a single course of conduct. In Williams the Supreme Court held that the "Due Process Clause forbids a State to use a punitive damages award to punish a defendant for injury that it inflicts upon... those who are, essentially, strangers to the litigation".
Building on the concern expressed in State Farm about the danger of repeated, duplicative punishments, the Williams court explained that such a punishment would be arbitrary (because the jury would be speculating about how many non-parties had been injured) and would deprive the defendant of its right to defend against the non-parties' claims. Thus, the court ruled, although "evidence of actual harm to nonparties can help to show that the conduct that harmed the plaintiff also posed a substantial risk of harm to the general public, and so was particularly reprehensible", the jury may not "use a punitive damages verdict to punish a defendant directly on account of harms it is alleged to have visited on nonparties". Those other alleged victims can bring their own claims and juries in those cases may impose punitive damages if they deem that remedy to be warranted.
It follows from Williams that the punitive damages imposed in a single case should be no greater than the plaintiff's proportionate share of the total punishment that can properly be imposed in all cases for the course of conduct at issue. To determine whether a $7.5 million exaction is excessive, the trial court in Barbra v Boston Scientific Corp should have considered what the total punishment would be if all 25,000 plaintiffs were awarded $7.5 million. Had it performed that calculation, it would have seen that it was implicitly approving a total punishment of $187 billion – because that would be the result if every plaintiff received the amount awarded to Mr and Mrs Barbra. That stratospheric figure surely cannot be justified and shows that even a ratio of 1:1 in a case such as this far exceeds what is needed to serve the state's interests in punishment and deterrence.
For further information on this topic please contact Miriam R Nemetz or Evan M Tager at Mayer Brown LLP by telephone (+1 202 263 3000) or email (firstname.lastname@example.org or email@example.com). The Mayer Brown International LLP website can be accessed at www.mayerbrown.com.
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