In 2014, a Louisiana federal district court jury decided that two pharmaceutical companies should pay a staggering $9 billion in punitive damages (6,000 times the amount of compensatory damages) for failing to provide adequate label warnings on a brand-name diabetes drug linked to bladder cancer. The district court had instructed the jury that it could draw spoliation-related adverse inferences against one of the pharmaceutical companies for allegedly violating a duty to preserve evidence. According to the court, that duty was triggered in 2002, nine years before the company had knowledge of bladder cancer claims, when it issued a broadly worded "litigation hold" in response to an unrelated liver failure suit.
The case was appealed to the Fifth Circuit, where it ultimately settled prior to briefing—but not before the DRI—The Voice of the Defense Bar prepared an amicus brief arguing that contrary to the district court's spoliation ruling, a litigation hold satisfies, but does not create, a duty to preserve documents.
Dentons partner Lawrence S. Ebner, an appellate litigator, discusses the arguments against the district court's flawed spoliation decision in the July 2015 issue of DRI’s For The Defense magazine. His article examines the relationship between the duty to preserve evidence and the issuance of litigation holds. Larry concludes that the district court's mistaken view of litigation holds would place corporate defendants into a "no-win" situation. Read more of Larry’s analysis here.