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April 8th, 2014

Shocking $9 Billion Punitive Damages Verdict in Louisiana Will Likely be Reduced

A federal jury in Louisiana on Tuesday ordered Takeda Pharmaceutical Co. and Eli Lilly Co. to pay $9 billion in punitive damages in a case involving the diabetes drug, Actos, after Takeda failed to protect documents that may have supported the plaintiff’s case. The underlying claim resulted in $1.5 million in compensatory damages to the plaintiff, meaning the punitive damages were 6,000 times greater than actual damages. 

The federal judge who presided over the case will almost surely reduce the $9 multibillion-dollar punitive damages award in light of U.S. Supreme Court precedent iState Farm Mutual Automobile Insurance Co. v. Campbell,  requiring punitive damages to be proportional to the awards of compensatory, or actual, damages that underlie them. Otherwise, such awards violate the Due Process Clause of the 14th Amendment. However, the Court has said that, in specific and limited cases, punitive awards up to ten times the actual damages amount may be acceptable.

According to Bloomberg, this punitive damages award is the 7th largest in U.S. History. And, sadly, it’s no surprise that such a verdict would come in Louisiana, currently ranked as the #2 Judicial Hellhole in the nation.

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