The United States experienced a punitive damages blizzard in February 2016. In rapid succession, juries in three states imposed four multi-million-dollar punitive damages awards.
On February 10 2016 a Pennsylvania state court jury imposed $10 million in punitive damages – after awarding $3.5 million in compensatory damages – against Johnson & Johnson and its subsidiary Ethicon in a case alleging that the defendants' pelvic mesh implants are dangerously defective.
On February 11 2016 a federal jury in Pennsylvania ordered US Steel to pay $550,000 in compensatory damages and $5 million in punitive damages to a former employee who alleged that he was terminated because of his disability (an arthritic knee).
On February 18 2016 a federal jury in Georgia imposed $4 million in punitive damages – 10 times the compensatory damages – against Mentor Worldwide LLC in another pelvic mesh case.
Finally, on February 22 2016 a St Louis, Missouri jury imposed a breathtaking $62 million dollars in punitive damages – on top of a compensatory award of $10 million – against Johnson & Johnson in a case alleging that the defendant's talcum powder caused the plaintiffs' decedent to contract ovarian cancer.
Product liability cases
The three product liability cases each raised important issues regarding the appropriate absolute amount of punitive damages and ratio of punitive to compensatory damages when there are multiple other lawsuits each seeking large compensatory and punitive awards for the same conduct.(1)
A related issue that may arise in the talc case is how to account for prior exonerations. When, as appears to be the situation here, a defendant has been exonerated in prior cases raising the same allegations, an eight-figure punitive award threatens to trump the decisions of prior courts and juries and deprive the defendant of the benefit of its prior – and any subsequent – exonerations.(2) Although the Supreme Court has not expressly invoked the exoneration concern, its holding in Philiip Morris v Williams that punitive damages may not be used to punish for harms to non-parties was likely informed, at least in part, by that concern.
The employment case against US Steel raises its own set of interesting issues. The first is whether the award should be reduced to the $300,000 cap that applies to Americans with Disabilities Act claims. The plaintiff argues that his claim arose under both state and federal law, and therefore is not subject to the cap. If the court agrees with the plaintiff, US Steel will likely have a powerful argument that the punitive damages are unconstitutionally excessive – assuming that it does not persuade the court that it is entitled to judgment on either the underlying claims or, at least, punitive damages.
This is not a case of highly repugnant conduct (eg, pervasive racial or sexual harassment). From the media reports, the plaintiff does not appear to have suffered severe emotional distress. Moreover, there is no indication that the termination was anything other than an isolated incident. For all of these reasons, a ratio of over 9:1 appears to be unsustainably high. Even a 1:1 ratio may be excessive under State Farm.
For further information on this topic please contact Evan M Tager at Mayer Brown LLP by telephone (+1 202 263 3000) or email (firstname.lastname@example.org). The Mayer Brown International LLP website can be accessed at www.mayerbrown.com.
(1) For further details please see "Wright Medical Technology files brief supporting post-trial motions in hip implant case", "California jury awards eye-popping damages in haemorrhoid stapler case" and "Delaware Superior Court cuts punitive damages in medical device case".
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