Louisiana Federal Judge Dramatically Reduces $9 Billion Punitive Damage Award To $37 Million

On Monday, U.S. District Judge Rebecca Doherty (Western District of Louisiana) cut a total punitive damage award from $9 billion to $36.875 million, an award 244 times smaller than the jury had determined.  The case involved the first trial in an MDL involving the potentially unsafe effects of a diabetes drug.  Throughout the lengthy almost 200-page opinion, Judge Doherty expresses her criticism of the defendants’ actions and pleads to the higher courts for more guidance in determining when large-scale punitive damage awards are permissible.

After walking through the U.S. Supreme Court’s punitive damage guidance since the 1990s, the judge explains, “This Court notes that the case at bar presents the very type of scenario the [U.S. Supreme] Court has been foreshadowing: one where each of the factors identified by the Court as present or absent, at different times, but which, heretofore, never existed all in one case, are now all present, in one case.”  Continuing, the judge emphasizes the lack of guidance from existing Supreme Court precedent: “The Supreme Court’s tendency to list the reprehensibility factors that are missing from a given case, rather than to provide specific and direct guidance, can leave lower courts rudderless when all of those absent factors are found in one case.  Such aversion, perhaps, creates a risk of constitutional shipwreck, allowing the vagaries of unbridled judicial subjectivity.”

Although the judge did not find that the punitive damage award was unreasonable given the evidence “of a high degree of reprehensibility” and “the need to adequately deter such conduct in the future,” the judge concluded that ratios of 1:5424 for one defendant and 1:8136 for the other could not withstand the more objective proportionality analysis under existing jurisprudence.  Instead, the judge ordered that a ratio of 1:25 would be best appropriate in this case and that the jury had to “bow to the weight of the Due Process Clause.”  After finding that she had to make such a reduction, however, the judge included specific facts at the end of her opinion relating to how small the reduced award was when compared with the defendants’ total net worth, if for no other reason than to give the 5th Circuit (and likely the U.S. Supreme Court) additional information to consider.