The award of punitive damages is a troubling and unpredictable part of the American judicial process. The term “punitive damages” refers to the award of monetary compensation to an injured party that goes beyond what is necessary to compensate the injured party for their actual loss (in other words, these are non-compensatory damages that are included to “punish” a party for their wrongful conduct and/or as a deterrent for future conduct). The Supreme Court and other appellate courts have previously attempted to provide some guidance in this area. For example, it has generally been held that when a jury awards substantial compensatory damages, a 1:1 ratio between compensatory damages and punitive damages could be considered appropriate. The Supreme Court has noted that the 1:1 ratio would appear to be at the “outermost limit” of a fair and reasonable punitive damage award.
However, some recent cases involving the medical device industry reflect troubling deviations from the Supreme Court guidelines. In Barbra v. Boston Scientific, a Delaware jury awarded the Plaintiff $25 million in compensatory damages and $75 million in punitive damages. That case involved the use of a surgical mesh to treat pelvic organ prolapse and incontinence. The Court reduced the verdict by a factor of 10 resulting in a $2.5 million compensatory award and a $7.5 million punitive damage award. While that reduction was significant, the Court nonetheless tacitly approved a 3:1 ratio for the punitive damage award. While awards beyond the 1:1 ratio can withstand judicial scrutiny, they have typically been reserved for very unusual cases. However, in the Barbra case, there were very few unusual or distinguishing features. In fact, the Plaintiff did not incur significant medical bills and did not make a claim for any future medical expenses or lost wages.
The award is particularly troubling since Boston Scientific – like many other medical device manufacturers – faces many similar cases involving the same product. Therefore, in light of the possibility of many other repeated awards, the duplicative nature of punitive damages could appear to be well beyond the necessary deterrent factor typically associated with a punitive damage award.
There is little doubt that medical device companies are clearly in the “cross-hairs” of the plaintiff bar and this case and several other claims against medical device manufacturers require close scrutiny and monitoring.