Friday, March 25, 2011

Nevada Punitive Damages Case Goes To Supreme Court

The #2 case on our list of bottom ten cases from 2010, Wyeth v. Rowatt, 244 P.3d 765 (Nev. 2010), has just been appealed to the Supreme Court by the defendant.  Here's an as-filed copy of the petition for certiorari.

Here are the questions that the Supreme Court is being asked to review:
Critical to the first issue are the unusual facts surrounding the first verdict that the jury rendered.  The trial was truly a cautionary tale about why it's really a bad idea to consolidate otherwise unrelated claims against the same drug for a single trial, but the circumstances of the verdict were truly strange.  The consolidated case was supposed to have been bifurcated into compensatory and punitive phases, but after an "improper and inflammatory closing argument," pet. at 2, the jury awarded $134.6 million in supposedly compensatory damages alone.  It soon became clear that the jury - without receiving any instructions at all on the standards for punitive damages (because that was supposed to be in phase II) - had improperly awarded punitives.  How clear was the jury's runaway behavior?  When informed that they were supposed to return for the second, punitive phase, the juror's response was "we already did that."  Id. at 6.
1. Whether, when a verdict has been tainted by a jury’s passion or prejudice, due process requires a trial court to grant a new trial instead of remittitur.
2.  Whether, and in what circumstances, a trial court violates due process when it awards a substantial amount in compensatory damages but nevertheless proceeds to award punitive damages in an amount exceeding [a] one-to-one ratio. . . .

The trial court, after having refused to give a "not to punish" instruction in the first phase, Pet. at 6, tried to back and fill by ordering a "compensatory" re-deliberation, and then holding the punitive phase, but the damage had been done.  The jury was dead set on punishment before ever being instructed on punitive damages.  Id. at 7.  The combined total of compensatory damages, and then the punitive damages from the plaintiff's second bite at the apple (which took less than two hours of jury deliberation), was practically identical to the first - 134.1 million - a .0037 (less than four tenths of one percent) difference from the first verdict.  Id. at 6-7.

The judge remitted the gigantic verdicts to a still huge almost $58 million total sum.  Pet. at 8.

Every court that reviewed what went on agreed that the verdict was tainted by passion and prejudice.  The first question submitted to the Court is when a verdict is so tainted, can it simply be cured by a remittitur, or does due process mandate that there must be a new trial.  The defendant's position is that, while remittitur is OK for verdicts that are merely excessive, remittitur can't cure verdicts that are the product of an inflamed and prejudical jury deliberation - or, as the Supreme Court said a long time ago, “No verdict can be permitted to stand which is found to be in any degree the result of appeals to passion and prejudice.”  Minneapolis, St. Paul & Sault Ste. Marie Railway Co. v. Moquin, 283 U.S. 520, 521 (1931).

The second issue concerns the Supreme Court's language in Campbell (under Due Process) and holding Exxon Shipping (under federal maritime common law) that where there is a "substantial" compensatory award (and the almost $23 million supposedly compensatory awards to the three plaintiffs - which were 121, 132, and 751 times their actual damages - would certainly qualify as "substantial"), then the maximum permissible punitive award should not exceed compensatory damages.

Both of these questions are of great interest to us.  We've seen over and over again the other side trying, sometimes successfully, sometimes not, to whip the jury into a frenzy.  Unless a complete new trial is the sanction for that kind of thing - thus taking away tainted liability findings as well as $$$ - there's essentially no deterrent to such misconduct, since even a small portion of a gigantic verdict is a lot.

The one-to-one ratio issue has come up repeatedly ever since Campbell, but since the Campbell language was not a holding (and not a personal injury case), it's never been resolved.  The lower courts are all over the lot - the petition needs more than three pages (pp. 19-22) just to detail the extent of the divergent opinions.

We'll let you know what happens.  It's not easy to get the Supreme Court to accept an appeal, but we're really rooting for this one.