United States: Federal Jury Returns $150 Million Punitive Verdict Against AbbVie—Without Awarding Any Compensatory Damages For The Plaintiff's Injury—As A Result Of Multiply Flawed Jury Instructions

You've likely seen by now media reports about an Illinois federal jury's $150 million punitive award against AbbVie in a case brought by a plaintiff who alleged that AbbVie's low-T medication AndroGel caused his heart attack.

The jury found against the plaintiff on his strict-liability and negligence claims. It found in favor of the plaintiff on his fraudulent-misrepresentation claim. However, the jury awarded no compensatory damages on that claim; nevertheless, it imposed $150 million in punitive damages.

According to multiple media accounts, the verdict is likely to be overturned on the ground that Illinois does not permit punitive damages to be awarded in the absence of compensatory damages. Because this case is one of many consolidated in an MDL that apparently will be adjudicated under Illinois law, however, it may be useful to attempt to divine the causes of this unsustainable verdict so that similar results can be forestalled in subsequent trials.

Although a number of factors may have contributed to this odd verdict, the jury instruction on punitive damages is likely among the culprits In relevant part, the instruction stated:

* * * If you find that AbbVie's conduct was fraudulent, intentional, or willful and wanton and that AbbVie's conduct proximately caused injury to [the plaintiff], and if you believe that justice and the public good require it, you may award an amount of money that will punish AbbVie and discourage it and others from similar conduct.

* * * *

In arriving at your decision as to the amount of punitive damages, you should consider the following three questions. The first question is the most important to determine the amount of punitive damages:

  1. How reprehensible was AbbVie's conduct?
  2. What actual and potential harm did defendant's conduct cause to the plaintiff in this case?
  3. What amount of money is necessary to punish defendant and discourage defendant and others from future wrongful conduct?

The amount of any punitive damages that you award must be reasonable.

This instruction appears to have been borrowed nearly verbatim from the Illinois Pattern Instruction on punitive damages. But that doesn't make it right, and it doesn't mean that a defendant is not entitled to an instruction that more faithfully follows the law as set forth by the U.S. and Illinois Supreme Courts.

There are at least three flaws in this instruction as applied in a mass tort case like this one.

The first paragraph of this instruction erroneously advises the jury that the defendant is subject to punitive damages simply upon a finding of fraud. But Illinois is one of a number of states that require aggravated fraud before punitive damages may be imposed. As the Illinois Supreme Court explained in Home Savings & Loan Association of Joliet v. Schneider, "deceit alone cannot support a punitive damages award"; instead, punitive damages may be awarded only "where the wrong involves some violation of duty springing from a relation of trust or confidence, or where the fraud is gross, or the case presents other extraordinary or exceptional circumstances clearly showing malice and willfulness."

There is a considerable gulf between "simple" fraud and "gross" or "malicious" fraud of the kind required in Illinois to support punitive liability. For that reason, the Illinois Supreme Court held in Schneider that it was reversible error to instruct the jury that it could impose punitive damages upon finding fraud or deceit alone and that the trial court instead should have instructed the jury that it needed to find that the defendant's conduct was willful and wanton. The instruction here contained much the same flaw, erroneously conveying that the jury could impose punitive damages upon finding that AbbVie's conduct was either willful and wanton or fraudulent.

Second, the instruction's reference to "potential" harm is misplaced. Consideration of potential harm is appropriate only in cases involving failed attempts where the intended harm was not achieved. It is not appropriate in product-liability cases, where some people are injured and many are not by a product that, assuming it carries undisclosed or unreasonable risks, does so at a relatively low level. The inclusion of potential harm allows the plaintiffs to assume counterfactually that the product actually causes the maximum harm to every user.

Third, and perhaps most significant, the portion of the instruction directing the jury to base its award on the amount of money necessary to discourage the defendant and others from engaging in similar conduct in the future is flatly contrary to the Supreme Court's holding in Philip Morris U.S.A. v. Williams, a case in which we represented the petitioner.

The Court held in Williams that a jury in an individual case is limited to punishing the defendant for the harm suffered by the plaintiff in that case and may not impose punishment for harms to non-parties caused by the defendant's conduct. The point of the Supreme Court's decision was to protect the defendant against global punishment in individual cases when other alleged victims of the same conduct could bring their own cases and seek punitive damages in those cases.

Unless punitive damages are somehow apportioned among the plaintiffs suing for the same conduct, the defendant would obviously be exposed to excessive punishment. To protect against that eventuality, the Supreme Court created a right to an instruction cautioning the jury that it could not do the very thing that the jury in this case was told that it could do—namely, impose "an amount of [punitive damages] that will punish AbbVie and discourage it and others from similar conduct."

The result here of disregarding the Supreme Court's holding in Williams was a global punishment that clearly cannot be defended as appropriate for the harm done to any individual plaintiff and that will not insulate the defendant from the punitive damages claims of the numerous other plaintiffs waiting in line to sue it.

Luckily, this enormous award is likely to be tossed out, so AbbVie will have another opportunity to advocate for an instruction that will limit the jury to punishing it for the harm (if any) to the plaintiff whose case is being tried. And any punitive exaction imposed by a subsequent jury would in addition be subject to evaluation for excessiveness under Williams' apportionment principle to determine whether the total would be unconstitutionally excessive if imposed in the cases of all other individuals who claim to have been injured by the same conduct.

Originally published on August 30, 2017

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Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2017. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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