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Drugs & Medical Devices

Punitive Damages, Deterrent Effect, and the Constitution

— November 7, 2014

Judge Rebecca F. Doherty entered an amended judgment on October 27, 2014, reducing a $6 billion award of punitive damages against Takeda and a $3 billion award against Eli Lilly in Allen v. Takeda Pharmaceutical Co. Ltd. et al., Civil No. 6:12-cv-00064, a case in the Actos MDL, proceeding in the Western District of Louisiana, In re: Actos (Pioglitazone) Products Liability Litigation, Civil No. 6:11-md-02299.

Judge Doherty found that the jury verdict, entered in the plaintiffs’ favor, was not unreasonable. In her opinion, Judge Doherty noted:

Within the context of this financial reality, and when repeatedly, fines, penalties and settlements calling for the payment of billions of dollars by these huge multi-national companies are a financial reality, it would be short-sighted not to recognize that corporations boasting sales of one product of almost $24 billion and a value of $40 billion are financially capable of simply absorbing losses that might seem large to the lay public, but are, in fact, small when compared to the profits made and degree of wealth involved.

Judge Doherty found that the jury appropriately followed instructions in reaching a verdict meant to have a deterrent effect. However, she reduced the award of punitive damages as an unconstitutional abrogation of the Defendants’ due process rights. Judge Doherty had previously also reduced the award of actual damages to the plaintiffs.

Counsel for Defendants indicated their intent to appeal the ruling.

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