Massive Product Liability Awards Making a Comeback

Companies being sued for defective products saw massive jury verdicts against them in 2014, and it is seen as a precursor to other major product liability cases currently within the courts. Verdicts rendered in the billions of dollars were given out last year which has not been seen in a courtroom in over a decade. This re-emergence of massive jury verdicts for the victims of product liability cases could mean major issues for the car industry and auto parts makers that are in the midst of massive class action lawsuits.

Billion Dollar Verdicts

The largest verdict given out by a jury last year was $23.6 billion to a family who had a loved one die from smoking at the age of 36 years old. There was also a $9 billion verdict given to a New York resident that could tie his bladder cancer to a diabetes medication that he was prescribed. “People now come into the jury room really suspicious, instead of wondering is this ambulance-chasing lawyer trying to squeeze money out of a company,” said a law and business professor at the University of Michigan. “Jurors now come in expecting to hear a story of corporate wrong-doing and are being very receptive to these stories.”

The other top five product liability lawsuits of 2014 included a $525 million verdict against Trinity Industries for alleged withholding of information from the U.S. over changes to its highway guardrail system, $466.7 million against Royal Philips NV for a medical-device patent-infringement suit by Masimo Corp, and $393.6 million against Medtronic Inc. for a case regarding a heart valve device.

The largest awards were given in cases with punitive damages, where the jury wanted to punish the company for its wrongdoing. Unfortunately, data over the last ten years shows that of the ten largest punitive verdicts against corporations in U.S. history, none survived post-trial court rulings. The largest was a $145 billion verdict in a Florida tobacco class action lawsuit in 2000, which ended up being tossed out entirely on appeal.

Impact of the Lawsuits

Even after being slashed from the original verdict amount, large product liability cases can haunt the company that it was rendered against. The tobacco industry is the most glaring example, with multiple findings of tobacco companies’ blameworthiness being used in individual cases, including the one that produced last year’s $23.6 billion award. “It can affect their business. It can affect the reputation of the company. The stock can go down.”

In some cases, the effects of a massive product liability lawsuit can be permanent. For example, a product has not been named “Pinto” since the Ford Motor Company case where multiple families sued after the company was linked to deaths caused by exploding gas tanks. Some companies and products can be forever tied to the seriousness of the product liability lawsuit.

Impact on Settlements

Big verdicts like the awards seen in 2014 attract more plaintiffs to product liability cases and raise the ceiling on settlement talks. Punitive damages can be used by plaintiffs’ attorneys before trial as a tool during settlement in addition to after a verdict to increase possible settlement offers. The largest settlements for products liability cases last year had the majority of the award based in punitive damages and only a fraction attributed to compensatory damages.

In one case, the family of Michael Johnson Sr., a Florida laborer who had smoked since his early teens, was awarded $16.9 million in actual damages and $23.6 billion in punitive damages by a jury in Pensacola, Florida against the tobacco company R.J. Reynolds. After the judge in post-trial motions cut the award down to $16.9 million, the same amount as the jury’s compensatory verdict, he offered R.J. Reynolds the choice of paying or getting a new trial on punitive damages. Reynolds chose the new trial.

In another case, Terrence Allen and his wife sued Takeda Pharmaceutical Co. and Eli Lilly & Co. arguing that he developed bladder cancer because of their diabetes drug Actos. The jury awarded the couple $1.5 million in compensatory damages and $9 billion in punitive damages from the two companies. The judge in that trial has since cut the damages of Takeda to $27.7 million and Eli Lilly’s to $9.2 million, but a spokesperson for Takeda stated that the remaining judgment is still too high.

Effects on the Auto Industry

The resurgence in massive product liability verdicts comes at a bad time for the auto industry. In the last year, multiple car brands have participated in large recalls, congressional hearings, and multiple lawsuits against companies like General Motors (GM) and airbag manufacturer Takata Corp. Since the massive verdicts in other cases, GM has settled many wrongful death and injury claims connected to the switch recalls from last year.

GM still faces multiple lawsuits regarding product liability for injuries sustained by other defective parts in its vehicles. In addition, Hyundai Motor Co. and its airbag manufacturer Takata are facing multiple lawsuits as well for exploding airbags and other defects in its vehicles. The ninth largest verdict last year was against Hyundai Motor Co. for the deaths of two Montana teenagers, cousins Tanner and Trevor Olson, on which the families blamed a steering defect. It was the largest ever against that company. The families received $248 million against the company, the largest verdict ever rendered against them, and $240 million was in punitive damages.

Contact a Florida Product Liability Attorney

Verdicts in the last year have shown that juries are more sympathetic than ever to victims that have been injured or killed as the result of a faulty product coming from a negligent company. If you or someone that you know has been injured or killed as a result of a defective product in Orlando, Fort Myers, Tampa, Jacksonville, or the West Palm Beach area, let the experienced product liability attorneys at The Pendas Law Firm help. Call the office or contact us today for a free and confidential consultation of your claims.