Recent Philadelphia Verdict Highlights Need to Combat Punitive Damages

In the Philadelphia Court of Common Pleas, a jury recently awarded the plaintiff $2.3 million in compensatory damages for injuries he alleged arose from his use of a diabetes treatment drug.  The plaintiff claimed that the drug company failed to properly warn that its use was linked to a higher incidence of bladder cancer, a condition he subsequently developed.  In addition to awarding a compensatory sum, the jury awarded $1.3 million in punitive damages, apparently based upon evidence that the company’s pharmaceutical reps were instructed not to bring up the link to bladder cancer when marketing the drug to physicians.

If the evidence supports that a party acted in a wanton, willful, oppressive or malicious way, or that the party exhibited a reckless indifference to the rights of others, an award of punitive damages is permissible in Pennsylvania.  Defined as “reckless disregard of the safety of another” the act or omission must be performed with the knowledge that the conduct undertaken creates an unreasonable risk of physical harm to another, and such risk exceeds what would be qualified as a negligent act. Proof of the mental state is necessary to establishing that punitive damages are applicable, i.e., evidence that the party realized and appreciated the risk, and acted in conscious disregard or indifference to it.

Due to the specific requirements needed to establish a foundation to award punitive damages, such an award is not made with significant frequency.  However, when the actions taken by a party rise to the level of willful, wanton, oppressive or malicious, resulting in a reckless disregard for the safety of another, the sum awarded can truly be punishing since there is no punitive damage cap in Pennsylvania.

Combating Punitive Damages

While punitive damages are not necessarily awarded frequently, they are becoming more frequently sought by the plaintiffs’ bar. They can be an effective vehicle for counsel in one off cases and mass tort proceedings as a mechanism for enhancing the value and trying to drive larger settlements. Defendants that are able to determine their exposure to potential punitive damages early on are in the best strategic position to manage the litigation and keep punitive damages from becoming a mechanism for plaintiffs’ attorneys to achieve their desired outcome.

Developing an early analysis of the state of the science at various time points and overlaying that with corporate actions is one step to consider. Creating this time map can be both an effective tool for assessing the potential for punitive damages and ultimately for persuading a judge (and jury if needed) that the conduct was not willful, wanton, oppressive, malicious or recklessly indifferent. When overlaying the state of the science with corporate conduct, the reliability and credibility for determining whether associations and causation exist should be considered in the punitive damage assessment just as it would in the liability assessment. Whether corporate conduct rises to the level for punitive damages should not be determined solely by internal notes, memos, emails and other documents that plaintiffs’ counsel tend to rely upon. If handled well even internal documents that are challenging can be overcome. Any statement that has not fully considered the state of the science may create a misconception that can be explained with in-depth analysis of the prevailing science at the time of the statement. In some instances internal statements that seem harmful may actually show a safety conscious culture that was ahead of the prevailing science.




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