Last week, we posted about a $10 million award of punitive damages in a product liability action against a manufacturer of hip implants.  We explained our view that the award was excessive, in part because hundreds of similar cases are pending across the country.

Roulette Wheel_LargeWe’ve also been following a much larger set of cases against medical device manufacturers—those involving 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 centralized for pre-trial proceedings in federal district court in West Virginia, and thousands of additional cases have been filed in state courts.  As may be inevitable with so many turns of the Roulette wheel, a few plaintiffs have hit the jackpot.

The biggest verdict so far came last May, 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 order, the trial court in Barbra v. Boston Scientific Corp. reduced the verdict by a factor of ten—leaving Boston Scientific facing a judgment of $2.5 million in compensatory damages and $7.5 million in punitive damages.   That’s obviously a substantial improvement, but in our view the reduced award remains quite excessive.  

First of all, 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 punishment and the harm to the plaintiff generally marks the “outermost limit of the due process guarantee.” Here, the reduced compensatory award is very 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.

In reality, moreover, the ratio between the punitive damage and the plaintiffs’ 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.  But the trial court nevertheless 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.”  And 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 $1,000,000. That would make the ratio between the actual harm and remitted punishment 7.5:1.  And if the excess compensation contained in the remitted award is counted as part of the punishment, then 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 even 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 sanction could appropriately be imposed, the trial court considered the deterrent and punitive impact of thousands of other lawsuits predicated on the same course of conduct.

As we have explained in previous posts, 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.

If 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.  And to determine whether a $7.5 million exaction is excessive here, the trial court should have considered what the total punishment would be if all 25,000 plaintiffs were awarded punitive damages equal to the amount it deemed allowable in this case.  Had it performed that calculation, it would have seen that it was implicitly approving a total punishment of $187 billionbecause 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 like this one far exceeds what is needed to serve the State’s interest in punishment and deterrence.