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Billion dollar punitive damage awards: the new trend in personal injury law?

by  on  News & Resources

In July of this year, a Florida jury heard the case of a widow of a lifetime smoker against RJ Reynolds, the company which manufactured the brand that the widow’s deceased husband, Mr. Robinson, smoked. Despite the fact that the link between smoking cigarettes and contracting cancer, heart disease, and other health conditions had been clearly established by the time Mr. Robinson started and continued to smoke, the lawyers for Mrs. Robinson nonetheless introduced evidence of Big Tobacco’s efforts to conceal the hazards of smoking and its addictive qualities. Evidently, the jury listened: it found that cigarettes are defective, dangerous and cause disease, and that RJ Reynolds was negligent. The jury awarded 16 million in compensatory damages and a staggering $23 billion in punitive damages. 

Three months earlier in April of 2014, a jury deliberated in the class action lawsuit against Takeda Corp. and Eli Lilly Corp., regarding the diabetes medication, Actos. Evidence revealed that both companies knew but waited to reveal the drug’s cancer risks, deliberately misleading regulators and destroying documents to that end. The jury found that the drug makers were guilty of a “failure to warn” and “wanton and reckless disregard” for the safety of the people taking the medication. The jury awarded a total of $9 billion in punitive damages to the class; $6 billion against Takeda and $3 billion against Lilly.

While these billion dollar punitive damage awards will likely be reduced either by post-trial motion or on appeal, the fact that juries are awarding such huge sums is worth consideration. Your Denver personal injury attorney explains that punitive damages, as the name suggests, are intended to punish the defendant for what a jury determines to be particularly egregious or willful behavior. Legally, there should be some proportionality between the underlying compensatory damage award and the punitive damage award. But both of the above awards lack any proportionality. It might then be inferred that the historically large punitive damages awards were intended to send messages to the defendants; with such large corporate defendants, extremely large punitive damages awards might promote better corporate consciousness.

Some legal experts argue that punishing bad corporate practices is not the purpose of punitive damages, and is better left to the criminal justice system. Others argue that punitive damages are too susceptible to personal biases and emotion. For instance, jurors in the RJ Reynolds case punished the company for producing what they determined to be a defective and hazardous product even though Mr. Robinson knowingly and voluntarily assumed the risk of the hazard by using that product. But however punitive damages are analyzed, the fact that two multibillion dollar awards were made within three months of each other this year signals that they are a formidable weapon in a jury’s arsenal.

If you have been involved in an accident, you might be able to file for punitive damages on top of damages for medical bills or lost wages. Contact Denver personal injury attorney Jordan Levine at Levine Law to discuss your legal options.