A couple of months ago, we reported on a $10 million punitive verdict in the first hip implant case to go to trial against Wright Medical Technology. Last week, Wright Medical filed its opening brief in support of its post-trial motions. From the looks of the brief, Wright Medical has a number of promising arguments.
To begin with, Wright would appear to have a compelling argument that it is entitled to either judgment or a new trial as a result of the jury’s answers to questions on the verdict form and the trial court’s response. The first question on the form asked the jury whether the plaintiff had proven that the hip replacement device was defectively designed and instructed the jury that, if it answered “no,” it should stop, and sign and date the form—because it evidently was undisputed that there could be no liability under any theory if the device was not defective. The jury did answer “no,” but it continued to answer other questions on the form.
Most significantly, the jury (i) found that Wright Medical had made negligent misrepresentations about the device and that those misrepresentations caused harm to the plaintiff; (ii) found that the amount of that harm was $662,500; (iii) found that the plaintiff had established by clear and convincing evidence that Wright Medical’s misrepresentations were willful and malicious, intentionally fraudulent, or knowingly and recklessly indifferent towards the rights of others, including the plaintiff; (iv) imposed punitive damages of $2.5 million; and (v) found that Wright Medical was 78.70% responsible for the plaintiff’s harm and that the plaintiff was 21.24% responsible (leaving 0.06% unaccounted for).
Citing cases from other circuits, Wright Medical maintains that the verdict was complete after the jury answered the first question and that the remaining answers should have been disregarded. The district court, however, sent the jury back to reconsider and, to make matters worse, dismissed a juror who had complained about the tenor of the deliberations and the refusal of other jurors to listen to his arguments. With this juror gone from the scene, the remaining jurors completely overhauled their responses to the questions on the verdict form.
This time around, the jury (i) found that the hip replacement device was defectively designed, that it was unreasonably dangerous, that the defect was present at the time that Wright Medical sold the device that was implanted in the plaintiff, that the plaintiff was harmed as a result, and that the amount of harm was $550,000; (ii) found that Wright Medical had made negligent misrepresentations, that those misrepresentations harmed the plaintiff, and that the amount of additional harm caused by the misrepresentations was $450,000; (iii) again found that the plaintiff had established by clear and convincing evidence that Wright Medical’s misrepresentations were willful and malicious, intentionally fraudulent, or knowingly and recklessly indifferent towards the rights of others, including the plaintiff; (iv) increased the amount of punitive damages to $10 million; and (v) found that plaintiff bore no responsibility for her harm.
The dramatic changes in the jury’s responses to the verdict form questions suggest that both the decision to resubmit the case to the jury and the decision to remove the juror were highly prejudicial to Wright Medical. Whether or not it is possible to rationalize each decision in isolation, when they are taken together, the appearance of unfairness seems so stark as to warrant a new trial.
Wright Medical also argues that the evidence was insufficient to support the jury’s findings that it was negligent and that it engaged in negligent misrepresentations. Because I have no familiarity with the record, I won’t comment on those arguments.
Wright Medical next contends both that negligent misrepresentation is not a valid predicate for punitive damages under the law of Utah and that, in any event, the plaintiff failed to adduce clear and convincing evidence that Wright Medical engaged in willful, malicious, or fraudulent conduct or that its conduct manifested a knowing and reckless indifference toward the rights of others. Again, I will have to forgo comment on these arguments because I lack familiarity with the record. But it is worth noting that, given Utah’s high standard for imposition of punitive damages, this may be a case in which the punitive award should be stricken even if the findings of liability for the underlying torts are allowed to stand. As we noted in a post a few months ago, the Kentucky Supreme Court recently drew such a line in a case involving an allegedly defective seat belt.
Finally, Wright Medical argues that the compensatory damages are excessive under Utah law and that the punitive damages are excessive under both Utah law and the due process clause.
The argument with respect to compensatory damages is essentially that the bulk of the $1 million award—all but $37,690.46 in stipulated medical expenses—is for pain and suffering and mental anguish, yet the evidence of such severe emotional harm is non-existent. According to Wright Medical’s brief, the plaintiff had no problem with the implant until the day before it failed, and that once it did, it was quickly replaced, she had a speedy recovery, and she now has resumed all of her regular activities, including 50-mile bike rides, skiing in the Alps, and hiking. Assuming that there is no countervailing evidence of severe pain and suffering, the argument for a substantial remittitur of the compensatory damages would appear to be compelling.
The argument that the punitive damages are excessive under Utah law rests on a 25-year-old Utah Supreme Court case that established a presumption that punitive/compensatory ratios in excess of 3:1 are excessive. Although the Utah courts have deviated from this presumption on occasion—including in State Farm Mutual Automobile Insurance Co. v. Campbell—this case does not appear to involve highly reprehensible conduct or other grounds that might warrant an exception.
As for the due process argument, although the Supreme Court has not established any hard-and-fast rules that lower courts must apply, it did indicate in State Farm that when the compensatory damages are substantial—and particularly when they contain a non-economic element that may duplicate the effect of punitive damages—a 1:1 ratio of punitive to compensatory damages may mark the constitutional line. As I indicated in my prior post about this case, moreover, that is all the more true in a mass tort context when many other plaintiffs are seeking punitive damages for the same alleged conduct. In fact, even a 1:1 ratio may be too high in such circumstances, depending on how many other plaintiffs there are and how high the compensatory damages are expected to be.
It should be interesting to see how the district court resolves the many significant issues raised by Wright Medical in this case. I assume that a decision is still several months away, but I will report on it once the court issues it.