Update on 1.3 Billion Dollar Pinnacle Verdict
Hi this is Stuart Talley here to do another update on the ongoing Pinnacle metal on metal hip cases. Today we just listened to the oral argument in the third bellwether trial that occurred this was the case where there were six California plaintiffs the verdict for the plaintiffs came in at approximately 1.3 billion dollars. Most of that made up of punitive damages the punitive damages were eventually reduced to about five hundred million dollars at the end of the day. And so the appeal today dealt with a many different issues.
What was interesting about this appeal and so far we’ve had actually three oral arguments before the appellate court in the Fifth Circuit. Each time one of these cases goes to the appellate court in the Fifth Circuit we have a different panel of judges that hears the decision. The panel this time consisted of three judges. One is judge Costa who is an Obama appointee. Judge Dennis, who’s a Clinton appointee, and judge Higgenbotham, who is a Ford appointee. And this panel, at least as far as the oral argument, which seemed to be really pressing the defendants much farther than the plaintiffs, they are the attorneys arguing for the plaintiff the attorney was Kenneth Starr who many people know he’s one of the best appellate advocate attorneys in the world and has argued many cases before the Supreme Court. He did a really good job in this case the issue of and there were really two issues that the court focused on the most one is what what’s called the lexicon waiver. Whether it was appropriate for Judge Kincaid to try this case in Texas rather than sending it back to California and the plaintiffs made a very good argument that at the very beginning of the case it was understood and the defendants had agreed that there would be four bellwether trials that would take place in Texas. And that those bellwether trials would involve people from different states and that was clear on the record that they had agreed to that what the defendant said was that no we agreed to that but only if they were single plaintiff cases. We never agreed to multiple plaintiffs in one trial and so there’s is some ambiguity there with respect to whether they agreed or not.
The plaintiffs said there was no ambiguity and the defendant said there was and that was really that the primary issue there. The other issue that was brought up was what we call personal jurisdiction and the question was was there jurisdiction over the defendants under California law would California have personal jurisdiction over the the defendants. And DePuy made the argument that there was no jurisdiction and the argument in response to that was that they had waived that issue and they waived that issue by engaging in the litigation over this long period of time without raising it.
The law is clear that if you believe that the court doesn’t have jurisdiction over you as a defendant you have to say something you have to raise your hand and say “Your Honor we should stop this entire proceeding because you don’t have jurisdiction over us as a defendant.” And the defendant didn’t do that until the very last second right before trial. And Kenneth Starr said that that was in essence sandbagging the judge and so I think the appellate court, at least their comments, and it’s very difficult to make predictions based on comments, seemed to be going with the plaintiffs for much of the argument. So I think it turned out well for the plaintiff there was also some argument on the issue of punitive damages when judge Kincaid reduced the damages to 500 million. The plaintiffs immediately filed a notice of appeal and so the plaintiffs had an appeal of Judge Kincaid’s decision to reduce the damages. The argument there was that the conduct of the defendant was so egregious that the award of damages was justified and that it shouldn’t have been reduced. The argument on the other side was this idea that there has to be some proportionality between the actual damages and the punitive damages. And there’s a Supreme Court case that essentially says that punitive damage Awards should never be or should rarely be more than ten times the amount of the compensatory awards. Since that decision came out there has been sort of a back and forth between different courts.
Some courts have said that was just a guideline. It could definitely be more than ten times. Some courts have said no that’s a cut off you can never be more than ten times. So there has been some ambiguity on the amount of punitive damages that are permissible under the Constitution. After that decision came out, in this case, judge Kincaid reduced it to nine times the actual compensatory awards. So we’ll see what happens we should have a decision within 60 days. Some of the issues, and when I say 60 days, that may not happen on the exact date because that’s just a guideline that the appellate court has. So we’ll see what happens.
The prospects for settlement of the case I think go way up if this verdict is upheld on appeal there will be a very good chance that the case will settle on a global basis. And even if it’s not upheld on appeal, okay, what that means for the defendant, it doesn’t mean that they get off scott-free what it means is that they’ll get a new trial but this time it will be in California. Which is actually not a very good jurisdiction for defendants compared to Dallas, Texas. So the litigation will not go away if DePuy wins this appeal.
So that’s where we are. If you have any questions or concerns feel free to give us a call. You could reach us at the phone number on the screen you can fill out one of our online forms and we’ll get back to you right away. Thanks.