Last September, following a federal investigation into Allergan’s tactics in promoting Botox for off-label uses such as treating pain and headaches, the company pled guilty to a criminal charge of misbranding and paid $600 million in criminal and civil fines.
In a civil case brought against Allergan for personal injury damages due to the effects of Botox causing brain damage, the company was ordered to pay $200 million in punitive damages. However due to the statutory caps on punitive awards the jury’s award was reduced to $350,000
Punitive damages may be thought of as punishment damages that do not have reference to the extent of the victim’s personal injuries, but instead are damages against the wrongdoer that are supposed to punish the wrongdoer.
A punitive verdict of $350,000 is a joke for a company like Allergan. It negates the entire purpose of punitive damages which is to prevent these offenses from generally happening again. If this is indeed the goal of punitive damage awards, the question arises whether it makes sense for the legislature to set a cap which in essence limits the court’s ability to accomplish that goal. The answer is No. As a Virginia personal injury attorney I’ve seen companies that find it more cost effective to continue their bad behavior and risk paying punitive damages than to make any real change for the better.
This is precisely the decision making employed by the Ford Motor Company regarding its Pinto automobile. The company determined that it would be cheaper to sell the defectively designed car, and risk paying damage awards to injured consumers, than it would be to make the car significantly safer at a cost of $11 per car.
Given these facts, why do the proponents of this so called "reform" seek to protect reckless and malicious wrongdoers from bearing responsibility for their acts? Why do they attack jurors’ judgments in awarding punitive damages, when those very same jurors are trusted to put persons to death in capital cases?
Punitive damages should be neither limited nor abolished since it is only the award of punitive damages that has placed accountability where it belongs — at the door of the wrongdoer.
CA
About the Editors: The Shapiro, Cooper, Lewis & Appleton personal injury law firm, which has offices in Virginia (VA) and North Carolina (NC), edits the injury law blogs Virginia Beach Injuryboard, Norfolk Injuryboard and Northeast North Carolina Injuryboard as pro bono services.
2 Comments
Andrew
Indeed: As you stated, the $350,000 is a joke for a company like Allergan. I used to be a consultant for this company, and quit once I learned of the unethical practices their sales staff uses. I lost a major account, but at least I can live with myself. Although, as a business owner myself, I am not in favor of frivolous lawsuits against companies, this one was in no way frivolous! I am saddened that the jury's decision was so callously and carelessly tossed aside.
Richard N. (Rick) Shapiro
Andrew: I agree with you, and the point about tort reforms are that if we tinker with our constitutional rights, it should be in smarter ways than capping punitive damages at a paltry $350,000 like Virginia(VA) has. Whether you own a business or are a blue collar worker, we are just giving a green light to major company bad behavior with this Virginia "cap" on punitive damages. Imagine if Ford and Firestone faced no real punitive damages threat in the USA when the entire bad tire and high center of gravity SUV dangers were publicized by the press and the lawyers for the early victims. What would motivate the companies to become safer if not a big economic penalty?
When all of us allow our legislators to push these type caps and celings through our state legislatures, we spite our own constitutional rights and protect only the worst and most unsafe company policies.
It seems to me that the lobbying groups for the very big companies and insurance companies have the most pull on these issues, not the citizens who cannot imagine such a tragedy befalling their family member or friend.
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