Judge Forced to Reduce Punitive Damages Award
Punitive damages are money damages, separate from compensatory damages, which are awarded by a jury and which are intended to punish or deter a bad-acting defendant and others from engaging in similar conduct. Judge Kinkeade, who is the federal judge presiding over the Depuy Pinnacle multi-district litigation (MDL), stated that he was bound by a Texas statute which puts a limit or “cap” on the amount of punitive damages a jury can award. Thus, Judge Kinkeade was required by law to reduce the punitive damages award, which a jury of twelve individuals, after a 42 day trial, thought was appropriate.
Thank You, Tort Reform!
This Texas statute, like many across the country, was enacted in the great tort reform push of the last few decades. Legislators, often pressed by the insurance and big business lobbies, wrote statutes that put caps on the amount of punitive damages that a court could award, no matter what the jury thought was proper and necessary. In Texas, the limit on the amount of punitive damages that can be awarded “may not exceed an amount of two times the amount of economic damages; plus an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or $200,000, whichever is greater.” So the statute benchmarks punitive damages on the amount of other money damages awarded by the to the injured person. Never mind the fact that the intent of punitive damages is not to compensate the injured person but to send a loud message to the bad acting defendant. Legislatures have essentially said to juries: “we’ll let you know how loud your message can be to a defendant who injures one of our citizens.”
In North Carolina, where I live, there is a similar cap on punitive damage awards. N.C. Gen. Stat. § 1D-25(b) states that punitive damages “shall not exceed three times the amount of compensatory damages or two hundred fifty thousand dollars ($250,000.00), whichever is greater.” I can tell you that this statute has had a chilling effect on injury cases in North Carolina.
So What’s Next in Texas?
Judge Kinkeade reduced the $360,000,000.00 punitive damages award to $9,646,256.00. The five injured persons now have a verdict, after the operation of the Texas statute, of $151,646,256.00, down from the original jury verdict of $502,043,908.00. As astonishing as the original jury verdict was when it was announced in March, this reduction is almost equally stunning. Admittedly this jury verdict still represents a very large award and a big success for the plaintiffs. But the attack on the jury’s verdict is not over. Despite winning a $350,000,000.00 reduction in the jury award, Depuy and Johnson & Johnson immediately filed an appeal in the case, arguing that mistakes were made at the trial level and that the entire award should be voided and a new trial granted. Appeals like this one will take many months to resolve.
Thousands of Depuy Pinnacle Cases Remain
Depuy stopped selling the Pinnacle in 2013. Remember that—unlike the Depuy ASR hip—the Depuy Pinnacle was never officially recalled by Depuy Orthopaedics. Depuy still takes the position that the Pinnacle is different and safer than the ASR hip components. But this latest jury verdict makes it harder for J&J to advance that narrative.
The Depuy Pinnacle system was allegedly designed to provide better range of motion for a more active group of patients undergoing hip replacement surgery. One of the major complaints from injured patients is that the metal components grind and release metal particles into the body and blood of the patient. Like the Depuy ASR hip, the Depuy Pinnacle hip bypassed the normal pre-market testing for a new medical product through a process known as “510(k).”
The next “bellwether” Depuy Pinnacle case is scheduled to go to trial in September 2016.
The Takeaway
Punitive damages awards play a vital role in consumer protection. If companies do not fear large punitive damages awards, or even the freedom and power of juries, they will be less likely to take adequate precautions to protect the public. And as we’ve seen again and again, companies often rush products to market which they believe will make them great profits. The 510(k) process is one of these shortcuts that have caused unnecessary injuries from many flawed consumer products. Tort reform advocates speak of the protections of business and the money these statutes will save companies and insurance companies. But these legislative limitations come at a cost, and in my view will lead to more careless behavior from profit-first corporations.
In re: DePuy Orthopaedics Inc. Pinnacle Hip Implant Products Liability Litigation, 11-md-02244, U.S. District Court, Northern District of Texas (Dallas).