J&J questions fairness of hip implant trial, $1 billion verdict
Johnson & Johnson (JNJ.N) will challenge the fairness of a trial that produced a verdict of $1 billion in damages against the company last week over allegations of design flaws in its Pinnacle hip implant.
Although legal experts think J&J faces an uphill battle, both they and investors believe the Texas jury’s penalty, the largest product liability verdict so far this year, is unlikely to stand.
In the two-month trial, five separate people from California argued that design flaws in the metal-on-metal implant made by J&J subsidiary DePuy Orthopaedics caused tissue death, bone erosion and other injuries.
It is the second large verdict against J&J in the Pinnacle implant litigation, which has been consolidated before U.S. District Court Judge Edward Kinkeade in Texas. In July, another jury awarded six Texas plaintiffs $500 million. Both cases were so-called bellwethers, intended to gauge the value of claims for more than 9,000 other pending implant cases.
J&J said in a statement it was confident in its appeal prospects and would not settle. It also said it stood by the safety of its product.
Last Thursday’s verdict has had little impact on J&J stock. Les Funtleyder, a portfolio manager with ESquared Asset Management, said investors assume large health products companies will occasionally be sued and lose and that the costs are ultimately manageable.
J&J said it will ask Kinkeade to reduce or throw out the jury award before appealing to the 5th U.S. Circuit Court of Appeals in New Orleans. According to the company, the multi-plaintiff format stacked the deck against it by parading a series of victims in front of the jury and exaggerating the number of complaints about the implant.
The company won the first bellwether trial in a case involving a single plaintiff in 2014. The next is scheduled for September 2017, and Kinkeade has not decided how many plaintiffs will be involved in that trial.
These results “perfectly illustrate the distortions and confusion inherent in multi-plaintiff trials and underscore the extent of the legal errors that have been repeated,” said J&J defense lawyer John Beisner.
But several legal experts said such a challenge faced long odds. Lynn Baker, a professor at the University of Texas School of Law, noted trial judges are normally given great leeway in managing their cases and multi-plaintiff trials were a long-established means of clearing dockets faster.
“I would not expect J&J to succeed on a claim that they were prejudiced by the multi-plaintiff bellwether format,” she said.
J&J also said the judge allowed plaintiffs’ lawyers to present inflammatory and prejudicial testimony to the juries, raising bribery accusations against the company and claims that the metal-on-metal implants could cause cancer.
University of Richmond School of Law Professor Carl Tobias said an appeals court was unlikely to overturn the verdict on such grounds though. “Unless there is clear prejudice on the part of the jury, you’ve got to defer to the factfinder,” he said.
But even without showing its trial was unfair, the professors said J&J’s case was strong for having the $1 billion award reduced on the grounds that it is excessive.
Kinkeade cut the $500 million July verdict to $151 million.
Andrew Bradt, a professor at University of California Berkeley School of Law, noted the U.S. Supreme Court has held punitive damages should be no more than 10 times compensatory damages. The $1.041 billion award was mainly punitive, with just $32 million in compensatory damages.
Bradt said the final award could be even lower than $320 million, since the high court has also said punitive damages awards should be closely tied to plaintiffs’ injuries rather than as a broader deterrent.
(Reporting By Erica Teichert, additional reporting by Ransdell Pierson; Editing by Anthony Lin and Grant McCool)
Source: Reuters Health