PHILADELPHIA – Though a recent Superior Court ruling has livened plaintiff attorneys as to the potential of winning punitive damages in Philadelphia's packed Risperdal program, one lawyer is cautioning against “banking” on such a possibility.
James Beck, Senior Life Sciences Policy Analyst for Reed Smith in Philadelphia, says the ruling - which considers the punitive damages laws of a plaintiff’s home state (most plaintiffs in the Philadelphia Risperdal program are not from Pennsylvania) rather than just the place of incorporation or headquarters for the defendant - is not necessarily a cure-all for plaintiffs looking to obtain punitive damages.
“I don’t consider it to be all that much of a landmark decision,” Beck said. “Because all they did is say you have to compare the contact of the plaintiff’s state of residence with the (defendant's) principal place of business, as opposed to the comparison that had been made previous, which was a little unusual.”
In addition to nearly 6,630 Risperdal cases, Philadelphia's Complex Litigation Center has several other mass tort programs, including cases over asbestos and Xarelto, and the percentage of claims belonging to out-of-state plaintiffs has traditionally been in the high 80s.
In 2016, the percentage for pharmaceutical lawsuits dropped to 74 percent.
However, in 2017, the most recent CLC stats show that figure jumped to an unprecedented 94 percent thanks to a massive influx of Risperdal cases. Verdicts in those cases have been split, but when juries rule for the plaintiffs, the amounts can be eye-opening.
A national tort reform group in December cited the CLC as a reason for placing Philadelphia on its annual list of “Judicial Hellholes.”
Prior to the Superior Court’s recent ruling, seeking punitive damages in cases over Risperdal was prohibited according to New Jersey state law – because its manufacturer Johnson & Johnson is headquartered there.
The key development on the issue of punitive damages started with Johnson & Johnson’s appeal to the Superior Court of the verdict in Stange v. Janssen Pharmaceuticals Et.Al - a lawsuit in which Wisconsin plaintiff Timothy Stange asserted an inadequate warning of developing gynecomastia (the enlargement of breasts in males) from taking Risperdal.
Stange used the drug for three years during his childhood, for treatment of Tourette’s syndrome. At the conclusion of the trial, a Philadelphia jury awarded Stange $500,000, and the Superior Court affirmed his arguments that an inadequate warning of the gynecomastia risks directly caused his injuries.
Now, Stange may opt for a new trial, during which he can apply Wisconsin law to attempt to obtain punitive damages from Johnson & Johnson, which has filed a petition for rehearing.
Beck says the Superior Court did not decide that punitive damages would be available, or even that Pennsylvania was preferable to New Jersey in that respect; what it decided was only that a lower court now has to reconsider the issue of punitive damages.
“This decision doesn’t have much effect on that, but the substantive outcome of what the [lower court] does on remand might. There is a split of authority there,” Beck stated.
The split Beck refers to is between cases featuring punitive damages that have been decided based on the residence of the plaintiff, and ones that have been decided based on the principal place of business for the defendant.
With regard to such choice-of-law decisions, Beck termed the direction of the trend as that of “where you stand depends on where you sit.”
“A decision holding that New Jersey applies over Pennsylvania is good on punitive, for defendants thinking punitive damages, if they’re based in New Jersey. If they’re based in Pennsylvania and they’re litigating in New Jersey, then it’s not. This is a situation where everything can go both ways in different cases,” Beck stated.
“But, I do think that where the court tends to side that punitive damages should be awarded on the basis of the plaintiff’s residence, then I think that would definitely be influential in bringing other courts to decide cases similarly. But they’re all under different state law, so that’s all speculative.”
What Beck said he found interesting in mass tort cases in which punitive damages are considered is whether the question of personal jurisdiction exists.
“If you happen to be dealing with a company, in this case with the Risperdal litigation, that is incorporated in Pennsylvania, not many companies are incorporated in Pennsylvania," Beck said.
"This whole issue of punitive damages is to be based on a plaintiff-focused place of injury versus a defendant-focused, ‘this is where the conduct that led to punitive damages allegedly took place.’ Those are the two alternatives here,” Beck said.
Beck continued that if a litigant lacks personal jurisdiction over a defendant other than in the states of incorporation and in the states of principal place of business, then he believes there will be an “inexorable” trend towards deciding punitive damages on that basis.
“They’re able to sue in Philadelphia here because of the incorporation of that state. In a broader sense, I think the trend is going to work the other way, because a lot of these cases brought as mass torts are going to end up in either the defendant’s home state or the defendant’s state of incorporation/principal place of business," Beck said.
"I think the long-term trend is probably in that direction, but for reasons of personal jurisdiction, rather than for reasons of choice-of-law."
In the past, those decisions were usually decided in the plaintiff's favor, Beck said, but they were different types of cases that didn't feature products liability claims. But in these mass tort programs, it became easier to apply the law based on the residence of the defendant, so there wouldn't be differing decisions for plaintiffs from around the country.
"But it’s not a unanimous trend by any event," Beck said.
When asked how the ramifications of the Superior Court ruling on potential consideration of punitive damages may relate to other mass tort designations in the Philadelphia County Court of Common Pleas’ Complex Litigation Center, Beck remained firm in his view that it, standing alone, wouldn’t have much effect.
“This particular decision is simply saying you have to compare the principal place of business with the plaintiff’s home state. Most of them do that already. The actual ruling by the Superior Court in this case, I don’t think has that much effect, because that’s how it’s usually done. The original comparison in Risperdal was unusual,” Beck reiterated.
“What’s going to change is what the substantive outcome is. But, we don’t know that. A lot has been said about that [Superior Court] decision, that isn’t what’s in that decision. That decision did not decide the substantive question, it just decided what you compare with what. And that’s still a long way from resolving the whole question.”
Beck said, in his opinion, some “exaggerations” had come from the plaintiffs’ side in response to the Superior Court ruling, with respect to its importance to the case.
“They may well win yet. But, they haven’t won yet,” Beck concluded.
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at firstname.lastname@example.org