Door to Punitive Damages in Pharma Cases Reopened by FJD

By Amaris Elliott-Engel

The Philadelphia Court of Common Pleas’ program for mass torts will once again allow punitive damages in pharmaceutical cases subject to the approval of the Complex Litigation Center coordinating judges, Judge Sandra Mazer Moss and Judge Arnold L. New, if they “rule that there are sufficient requisite proofs to support the claim going to trial.”

The court is requiring the motions practice regarding punitive damages to take place at least 60 days before trial.

Court leaders said, however, that the punitive damages issue is still subject to review.

The clientele of the mass torts defense bar opposed restoring punitive damages, while the plaintiffs bar was in favor of restoring them.

The court is maintaining the ban on reverse bifurcation of any mass tort case and the ban on consolidation of mass torts, except for in asbestos cases or if both sides of litigation agree.

New said the revised protocols “balance the plaintiffs and defense, make sure both sides are receiving a fair trial.”

Both Moss and New said that they expect further amendments to the protocols as they get input from the lawyers. “I don’t know if we’ll ever have a final version,” New said.

Philadelphia Court of Common Pleas Judge John W. Herron, the trial division administrative judge, had instituted several interim measures this winter regarding the court’s mass tort inventory because the court’s inventory rose from 2,542 cases to 6,174 cases in the last five years, according to the notice to the mass tort bar to be released today. The court’s leadership said that only 36 percent of the mass tort cases were disposed of within the American Bar Association standards, while 90 percent of major jury cases are disposed within the ABA standards. The leadership of the mass torts program, housed within the Complex Litigation Center, also says that the ABA standards do not align well with complex litigation and that the ABA should consider developing a separate standard for complex cases like mass torts.

The court is now projecting that there will be a 60 percent reduction in the number of mass tort filings in 2012.

The original intent behind deferring punitive damages was to encourage the bar to give the court a proposal to address punitive damages, Herron said.

“Punitives make it very, very difficult for the mediation process or the judicial settlement-guided process to resolve matters,” Herron said.

Further, Herron said, “we had hoped initially to stimulate a discussion and create a more thoughtful atmosphere for addressing punitives and to make an earlier decision about whether there is sufficient evidence for punitives to remain in a case or not and by doing that create a period of time before the trial where the parties could look at the case in the way it would actually go to trial.”

The coordinating judges are the best jurists to decide if punitive damages should be on the table in individual cases because they are sitting in conferences with the counsel for each mass tort program and they become very knowledgeable about the individual issues with each mass tort case, Herron said.

Having the coordinating judges decide the punitive damages issue will give consistency on the issue, Moss said. Lawyers will know what has a chance of winning and what is worth filing, she said.

Further, having the punitive damages is consistent with the fact that the coordinating judges supervise the cases until they’re sent out for trial, including ruling on Frye scientific motions, Moss said.

“It benefits the program because it’s a recognition, again after having discussions with the defense bar and after having discussions with the plaintiffs bar, punitive damages themselves are often an individual matter but you just can’t have an overall encompassing deferment of punitives,” New said. “They have to be reviewed.”

Plaintiffs attorney Shanin Specter of Kline & Specter, who has been involved in negotiating with the court about the mass tort protocols, said that changing the decision about punitive damages from individual trial judges to the coordinating judges is well within the court’s prerogative and that Herron has taken an important step forward.

The plaintiffs bar’s two main areas of concern have been the issues of punitive damages and discovery as stated in the earlier revisions drafted by Herron, Specter said.

“The right to seek punitive damages is a centuries-old right and it can’t be voided by a local rule,” Specter said.

Defense attorney Robert C. Heim of Dechert, who also has been involved in negotiating with the court about the mass tort protocols, said that most defense counsel think deferring punitives has a “salutary effect on increasing settlement, decreasing trial time and avoiding appeals. But the adoption of this protocol is in my view a very desirable step in the right direction and is an abbreviated and concise form of a proposal that we have submitted to plaintiffs counsel for their consideration as part of the courts’ effort to see if plaintiffs counsel and defense counsel could come to agreement on this subject.”

Heim said the defense’s “elaborate” proposal suggested having separate phases for compensatory damages and punitive damages and that evidence regarding punitive damages not be allowed in the compensatory damages phase.

The court’s rule would be fair to everyone, Heim said.

The issue of the punitive damages in Philadelphia has arisen in the context of an allocatur petition that the state Supreme Court has accepted to decide whether punitive damages should be awarded for a drug approved by the federal Food and Drug Administration for which there is not evidence the drugmaker made a misrepresentation to the FDA, Heim said.

Among several other changes are:

Another judge is to be assigned to the mass tort program in the fall.

The court is officially adopting discovery rules written by the asbestos bar and the pharmaceutical bar.

Pro hac vice counsel are to be allowed four trials, instead of two.

Expedited listings will be restored for plaintiffs with “a medically verifiable prognosis of imminent death.”

The court is encouraging the pharmaceutical bar to utilize voluntary mediation just as it has been encouraging voluntary mediation for the asbestos program.

The discovery rule for pharmaceutical cases was a compromise between the plaintiffs and defense bars, Specter and the mass tort leaders said. Herron’s rule said that all discovery had to occur in Philadelphia unless the defense agreed. Now the rule says that all plaintiffs shall be made available for deposition in Philadelphia unless otherwise agreed by all parties, “or upon motion and for good cause shown.”

“I don’t know another jurisdiction in the country that has two tailored discovery rules for two separate programs and that was done by agreement of counsel,” Moss said.

The collective comment from the defense bar asked for the continual deferral of punitive damages in all mass tort cases.

“To promote uniformity and fair treatment for all mass tort defendants, we believe that deferral of punitive damages is appropriate in all such claims, because a mass tort defendant may be subject to repeated punishment for the same act or course of conduct,” the defense comment said.

The defense comment said that deferring punitives for pharmaceutical and medical-device defendants would encourage companies to “invest in and develop new and useful life-prolonging and life-enhancing products.”

The comment was filed by Shook Hardy & Bacon on behalf of the Pennsylvania Business Council, Pennsylvania Chamber of Business and Industry, Pennsylvania Manufacturers’ Association, Insurance Federation of Pennsylvania, Citizens Alliance of Pennsylvania, NFIB/PA, Coalition for Litigation Justice Inc., Chamber of Commerce of the United States of America, Property Casualty Insurers Association of America, National Association of Manufacturers, American Chemistry Council, American Insurance Association, American Tort Reform Association, Pharmaceutical Research and Manufacturers of America and NFIB Small Business Legal Center.

Comment from plaintiffs bar groups was expected to come on Friday.

Amaris Elliott-Engel

can be contacted at 215-557-2354 or Follow her on Twitter @AmarisTLI.