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Cert. petition asks Supreme Court to address preemption of punitive damages claims against drug makers (Novartis v. Fussman)
Does federal law preempt punitive damages claims against drug manufacturers who have satisfied FDA approval and labeling requirements? That is the first question raised in this cert. petition filed by Novartis Pharmaceuticals in Novartis Pharmaceuticals Corp. v. Fussman.
The plaintiff brought suit in federal district court, asserting a failure-to-warn claim under North Carolina law. The plaintiff claimed Novartis failed to adequately warn of risks associated with the cancer drugs Aredia and Zometa. A jury awarded $287,000 in compensatory damages and $12.6 million in punitive damages. The district court reduced the punitive damages award to $1.3 million under a North Carolina statute that caps punitive damages at three times compensatory damages.
Novartis appealed to the Fourth Circuit, arguing that federal law bars punitive damages in state law failure to warn cases against drug manufacturers who have complied with all FDA requirements. The Fourth Circuit disagreed and affirmed the punitive damages award in an unpublished opinion.
Novartis filed a petition for certiorari and the plaintiff waived his right to file a response. But the Supreme Court, after considering the petition, requested a response from the plaintiff. Yesterday, the Washington Legal Foundation filed an amicus brief in support of the petition. See their press release here.
To track the status of this petition, you can view the Supreme Court’s online docket here.
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Iowa Supreme Court reaffirms that punitive damages are not available in civil rights cases
Last Friday, the Iowa Supreme Court issued this opinion (Ackelson v. Manley Toy Direct), reaffirming the court’s earlier ruling that punitive damages are not available in sexual harassment and gender discrimination cases brought under the Iowa Civil Rights Act:
We have clearly and repeatedly stated our conclusion that the ICRA does not implicitly permit an award of punitive damages. This message has been a reoccurring pronouncement over the last twenty-seven years. No significant legislative changes have been made since our first pronouncement in 1986 that would even hint at a shift in legislative intent since that time.
During this same period, the issue of punitive damages in civil rights claims has received broad national attention, making it very likely that our legislature would have taken action to alter our interpretation if it disapproved. . . . Overall, we think our legislature would be quite surprised to learn if we decided to reverse course and take a different position under the guise of statutory interpretation. We did our job twenty-seven years ago and will leave it for the legislature to take any different approach.
That excerpt certainly creates the impression that this issue has been settled in Iowa for quite some time (twenty-seven years, to be precise). Apparently, however, Iowa’s trial courts had not gotten that message. This Associated Press story in the Globe Gazette reports that “trial judges had been allowing punitive damages in civil rights cases,” according to a local plaintiffs’ attorney. Presumably that will change now.
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9th Circuit hears oral arguments in punitive damages case where jury awarded no compensatory damages
Today’s Recorder has a story on an interesting punitive damages case pending before the Ninth Circuit.
In a sexual harassment case (Aguilar v. ASARCO), the jury awarded $0 in compensatory damages, $1 in nominal damages, and $868,750 in punitive damages. The district court reduced the punitive damages to $300,000 and the defendant appealed, challenging that amount as excessive. Oral argument was held on Wednesday. As Scott Graham of the Recorder reports, Judges O’Scannlain and Hurwitz jousted with counsel over how to apply the single-digit-ratio rubric of BMW and State Farm to the facts of this case. Stay tuned. This is the sort of case in which the losing side might seek certiorari.
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Court of Appeal affirms order vacating $1.75 million punitive damages award and ordering new trial (Radford v. BAE Systems)
This unpublished opinion contains a very interesting discussion about the validity of some unusual posttrial procedures involving a punitive damages award. Or at least it’s very interesting if you are into the arcana of California posttrial and appellate procedure. If that’s not your thing, you might want to stop reading now.
The jury in this case awarded $420,000 in compensatory damages and $1.75 million in punitive damages. Before judgment was entered, the defendant asked the trial court to rule that the punitive damages were constitutionally excessive. The plaintiff objected, arguing that the court should enter judgment and the defendant should then raise the excessive damages through posttrial motions.
The trial court overruled the plaintiff’s objections and decided the excessiveness issue before entering judgment. The court ruled that the maximum constitutionally permissible punitive damages award is $420,000 on the facts of this case.
The court then entered judgment and the defendant filed a new trial motion and a JNOV motion. The plaintiff argued that the trial court had no jurisdiction to grant either motion because the court had already considered the plaintiff’s prejudgment motion, which was effectively a new trial motion.
The trial court overruled the plaintiff’s objections again, and granted the defendant’s new trial motion. The court ruled that plaintiff’s counsel committed misconduct, depriving the defendant of a fair trial. The court granted a new trial conditioned on the plaintiff’s acceptance of a remittitur of the amount of the compensatory and punitive damages to a total of less than $500,000. The plaintiff accepted the remittitur.
After the trial court’s jurisdiction to grant a new trial expired, the court issued its specification of reasons for granting a new trial. In the specification of reasons, the court amended its earlier new trial order to eliminate the conditional part of the order and to eliminate the plaintiff’s right to avoid a new trial by accepting a remittitur.
The plaintiff appealed and the Court of Appeal (First Appellate District, Division Five) affirmed. It found nothing wrong with the judge deciding the issue of excessive punitive damages before entering judgment. The Court of Appeal said the trial court’s prejudgment ruling was effectively a de facto JNOV motion, not a de facto new trial motion, because the issue of constitutional excessiveness is a JNOV issue, not a new trial issue.
The plaintiff argued that even a de facto JNOV motion before judgment would be improper because by statute the trial court is supposed to hear and decide the JNOV motion at the same time as a new trial motion. The Court of Appeal said that argument might have been valid if the plaintiff had raised it below, but since he didn’t, the argument was waived.
The Court of Appeal also found nothing nothing wrong with the court “amending” the new trial order in the specification of reasons and taking away the plaintiff’s right to accept a remittitur. The Court of Appeal said that the remittitur part of the original new trial order was void all along because trial courts are not permitted to order a remittitur when granting a new trial on grounds other than excessive damages. Therefore, because the remittitur was never legally valid in the first place, the trial court did not err by revoking the remittitur in its specification of reasons.
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Massachusetts Supreme Court reverses smoker’s $81M punitive damages award
The Boston Herald reports that the Massachusetts Supreme Judicial Court has reversed an $81 million punitive damages award given to the family of a smoker in a lawsuit against Lorillard Tobacco Co.
In a unanimous opinion, the court ruled that the trial court improperly instructed the jury on the issues of negligent design and marketing, and that those erroneous instructions may have tainted the punitive damages award. The court ordered a new trial on punitive damages, but affirmed the jury’s $35 million compensatory damages award, which was supported by alternate theories of liability not impacted by the erroneous instructions.
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Oakland jury awards $11M in punitive damages against Owens-Illinois
Law 360 reports (subscription required) that a jury in Alameda County has awarded $16.3 million in compensatory damages and $11 million in punitive damages against Owens-Illinois Inc.
The plaintiff claims she developed mesothelioma as a result of her exposure to asbestos fibers while shaking out and washing her husband’s clothes. It is not clear to what extent such “take home” claims are viable in California. Last year the Second Appellate District, Division Seven, ruled that Ford could not be liable to a plaintiff who claimed she developed mesothelioma as a result of her exposure to asbestos fibers from laundering her father’s and brother’s clothes after they worked as independent contractors installing asbestos at a Ford manufacturing plant. (Campbell v. Ford Motor Co.) Related issues are pending before the First Appellate District, Division Three, in Kesner v. Pneumo Abex and before the Second Appellate District, Division Three, in Petitpas v. Borgwarner.
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Court of Appeal reverses $1.4M punitive damages award because plaintiff failed to prove defendant’s current ability to pay (Dunlap v. Starz)
According to the Court of Appeal (Second Appellate District, Division Seven), the plaintiff presented evidence of the defendant’s assets, but not her liabilities. Also, most of plaintiff’s evidence dated from the 2003-2007 time period, even though the trial took place in March 2010. Thus, the plaintiff failed to provide a complete picture of the defendant’s ability to pay punitive damages at the time of trial. Due to the plaintiff’s failure of proof, the Court of Appeal directed the trial court to vacate the punitive damages award and enter judgment for the defendant on that issue.
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Court of Appeal rejects plaintiffs’ bid for retrial on punitive damages, finds waiver of objections to financial disclosures (Lanning v. Kramer)
This case involves a species of waiver we haven’t seen before.
A jury found that several defendants acted with malice in committing various torts, including trespass and intentional infliction of emotional distress. But the jury declined to award any punitive damages.
On appeal, the plaintiffs sought a new trial on the amount of punitive damages. They argued that one of the defendants failed to disclose sufficient information about his financial condition, and thereby prevented plaintiffs’ financial expert from offering evidence of his net worth.
The Court of Appeal (Second Appellate District, Division Seven) held in an unpublished opinion that plaintiffs waived their right to seek a new trial because they failed to make a timely objection to the adequacy of the defendant’s disclosures. The court noted that the plaintiffs’ expert opined about the defendant’s net worth, gave a specific dollar amount, and never mentioned that the information provided to him was insufficient to allow him to render an opinion.
We’ve seen a lot of cases finding waiver because plaintiffs failed to present meaningful evidence of the defendant’s financial condition, or because the defendant failed to comply with a court order compelling disclosure of financial information, but this is the first time we have seen a case imposing a waiver because plaintiffs failed to object to the defendant’s disclosure.
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Court of Appeal rejects defendant’s claim of inability to pay punitive damages, citing evidence that defendant failed to improve her financial condition (Morton v. Spotts)
This unpublished opinion contains a rather unusual twist on an issue that frequently arises in punitive damages cases in California, namely, whether a punitive damages award is disproportionate to the defendant’s ability to pay.
In an appeal from a $15,000 punitive damages award, the defendant argued the award was excessive in light of her negative net worth. The plaintiff disagreed with the defendant’s interpretation of the evidence, and argued that the defendant’s net worth was worth at least $350,000. The Court of Appeal (Fourth Appellate District, Division One) affirmed the award. The court could have just adopted the plaintiff’s view of the evidence and left it at that. But instead, the court cited the defendant’s failure to fully utilize her financial assets, and said the jury could have concluded defendant was “failing to maximize her net worth or improve her financial condition.”
That’s a new one on me. I don’t recall ever seeing any other opinion suggesting that an award could be upheld on the theory that the defendant’s inability to pay was the result of the defendant’s failure to maximize his or her own net worth.