The Curious Case of the Disappearing DePuy Damages

Dallas, TXThe bellwether defective hip implant lawsuits that were tried in the Northern District of Texas as part of multidistrict litigation 2244 have yielded some staggering awards for the plaintiffs. The latest Alice hip failure lawsuit ended with a $247 million award to six plaintiffs. A previous bellwether trial awarded $1.4 billion to a group of six plaintiffs, and another lawsuit ended with a $502 million jury award to five plaintiffs.

Yet the plaintiffs in defective hip implant lawsuits rarely see that much money. It’s not necessarily a case of evil, grasping personal injury lawyers, as some would argue. Rather, state legislatures, sometimes at the behest of industry groups, often limit the amount that defendant companies can be obligated to pay in punitive damages.

Damages 101

In a civil lawsuit, juries can award damages for a variety of reasons. Compensatory damages are meant to compensate a plaintiff for things like medical bills, loss of earning power, pain, suffering and any other harm a plaintiff has suffered. These have to be carefully quantified by a plaintiff’s attorney.

Punitive damages, on the other hand, are designed to punish a defendant. They often express a jury’s shock and outrage at what it sees as especially bad conduct on the part of a defendant. Out of concern about excessive jury awards and under the banner of “tort reform” nearly every state legislature has enacted some limits on punitive damages . This is, of course, a deeply political issue. Although the DePuy MDL cases are being heard in federal district courts, the award limits are determined according to the law of the state where the plaintiffs reside.

Knocked down

Of the $247 million awarded in Alicea, $168 million was in punitive damages. The plaintiffs are all residents of New York. In New York punitive damages cannot normally exceed 10 times the amount of actual damages suffered by the plaintiff. This is just a guideline, however, and limits on awards are highly dependent on the facts of each case.

Of the $1.4 billion awarded in the earlier bellwether, only $32 million was in compensatory damages. The remainder was in punitive damages. All the plaintiffs were residents of California. California law limits the ratio of punitive damages to nine times the actual damages. In practice it is quite rare for punitive damages to be awarded at such a high ratio. The court cut the punitive damage portion of the award by half.

The $502 million jury award included $360 million in punitive damages. All plaintiffs were residents of Texas. After the trial, Judge Kinkeade reduced the punitive damage award to $9,646,256 pursuant to a Texas law that caps punitive damages.

There are many sides to the questions of whether juries are to be trusted, whether jury awards are actually disproportionate to the harm done and, if so, what should be done. Some are troubled, however, by the fact that state legislatures, rather than the jury that hears a case, ultimately determine the award given to plaintiffs.