We have previously posted—for example, here, here, here, and here—about the thorny problem of avoiding excessive punishment when multiple plaintiffs seek punitive damages for the same course of conduct. Johnson & Johnson is the latest corporation to face this issue.
According to the National Law Journal, a personal-injury lawyer unearthed data that he believes demonstrate that use of talcum powder increases the risk of ovarian cancer. He then “put the word out” that he was interested in filing cases making that claim. More than a thousand plaintiffs from states across the country have since sued in Missouri state court, and the first two trials there have produced blockbuster verdicts.
In February, a St. Louis jury awarded the plaintiffs in a wrongful death case $10 million in compensatory damages and $62 million in punitive damages. In early May, another St. Louis jury awarded $5 million in compensatory damages and $50 million in punitive damages to a South Dakota woman who survived her diagnosis of early-stage cancer.
If the trial court enforces the constitutional constraints on punitive damages, it will reduce both awards dramatically. First, in both cases there is an unacceptably high ratio between the punitive and the compensatory damages.
A ratio in the high single digits may be defensible when the conduct is exceptionally reprehensible and the damages are modest. The Supreme Court has explained, however, that when compensatory damages are “substantial,” a 1:1 ratio between punitive and compensatory damages generally marks the “outermost limit of the due process guarantee.” Many courts, including most recently the Tenth Circuit in a decision described in this post, have applied this cutoff.
Given that the compensatory damage awards in the two cases against J&J are quite large—and, indeed, may well be excessive in their own right—the ratios of 10:1 and 6.2:1 (which would increase if the compensatory damages are reduced) are plainly unacceptable.
Second, even a 1:1 ratio probably is excessive here, given that J&J faces more than a thousand suits based on the same conduct. As we noted in some of our prior posts on this issue, the Supreme Court held in Philip Morris v. Williams that the jury may not “use a punitive damages verdict to punish a defendant directly on account of harms it is alleged to have visited on nonparties.”
When a jury awards an astronomical punishment to a single plaintiff, it often intends to make the penalty in the case before it large enough to punish the defendant for its entire course of conduct. But in so doing the jury overlooks the fact that other alleged victims can bring their own claims, and juries in those cases may impose punitive damages if they deem that remedy to be warranted.
It follows that the punitive damages imposed in a single case should be no greater than the plaintiff’s proportionate share of the total punishment that could permissibly be imposed in all cases for the course of conduct at issue. If that restriction is not observed, then the total of the punitive damages imposed in all cases may greatly exceed reasonable limits—leading to over-deterrence and the arbitrary deprivation of property.
Although courts may—and in some jurisdictions must—take prior punitive awards into account when determining whether a subsequent award is excessive, that alone does not solve the problem. First, a court reviewing an award of punitive damages cannot reasonably rely on the actions of a future court to ensure that the defendant is not over-punished. Second, later juries may disagree that the defendant should be subject to punitive damages at all. It violates the defendant’s due process rights to assume that the defendant is liable for causing any harm other than the harm to the plaintiff in the case in which the punitive award is to be imposed.
As Judge Posner observed in In re Rhone-Poulenc Rorer, Inc., “a decentralized process of multiple trials, involving different juries, and different standards of liability, in different jurisdictions,”—which has the capacity to produce “a consensus, or at least a pooling of judgment, of may different tribunals”—is more likely to produce an accurate result than an approach that puts disproportionate weight on the outcome of a single jury trial. Judge Posner was discussing class actions, but awards of punitive damages that seek to punish the defendant for harm to nonparties have much the same impact.