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NEW HAVEN, Conn. — (Mealey’s) Applying Connecticut law governing punitive damages in product liability actions, a Connecticut federal judge on Aug. 5 awarded $1,769,932 to a woman and her husband, who in April 2012 were awarded $4 million in compensatory damages by a jury (Margaret B. Fraser, et al. v. Wyeth, Inc., et al., No. 3:04-1373, D. Conn.).
Margaret Fraser was prescribed Prempro brand hormone replacement therapy to treat symptoms of menopause. In 2004, she sued Prempro manufacturer Wyeth (now Pfizer Inc.) in the U.S. District Court for the District of Connecticut, alleging that the drug caused her to develop breast cancer.
The case was transferred to the Prempro multidistrict litigation in the Eastern District of Arkansas and was remanded for trial.
The District of Connecticut court granted Wyeth’s motion for summary judgment on Fraser’s claims of breach of warranty and violations of the Connecticut Unfair Trade Practices Act, leaving the claims of failure to warn, strict liability, negligent misrepresentation and negligent failure to test, study or investigate for trial. The judge found Wyeth liable for all the surviving claims and awarded Margaret Fraser $3,750,000 in compensatory damages and Margaret’s husband, Joseph, $250,000 for loss of consortium.
Punitive Liability, No Award
The jury also found that Wyeth was liable to the plaintiffs for punitive damages but was not asked to determine that award. Under Connecticut General Statutes Section 52-240b, punitive damages are to be determined by the judge.
In post-trial briefing on punitive damages, the Frasers argued that under the Connecticut punitive damages law, they are entitled to twice the amount of the compensatory damages, or $8 million. Wyeth argued that the state law incorporates the common law rule that punitive damages are capped by attorney fees and costs, that the Frasers waived their right to recover those fees and costs and that they have not submitted sufficient evidence to support the fees and costs.
Even if the Frasers presented evidence of fees and costs to support a punitive award, Wyeth said the constitutional requirements of due process require an award of $0.
Izzarelli Ruling Adopted
Noting that the Connecticut Products Liability Act (CPLA) is silent about whether it abrogates or subsumes common law limitations on punitive damages and that several Connecticut Superior Court decisions have reached opposite conclusions, Judge Janet Bond Arterton relied on a 2010 Connecticut punitive damages decision by the District Court in Izzarelli v. R.J. Reynolds Tobacco Co. (767 F. Supp. 2d 324f [D. Conn. 2010], on appeal at No. 11-3865, [2d Cir. 2011]).
Izzarelli concluded that the CPLA did not abrogate the common law cap on punitive damages and was consistent with the “make-whole legislative purpose” of the law’s limit on punitive damages.
“Therefore, the Court concludes that the CPLA incorporates the common law cap on punitive damages, and Plaintiffs are thus entitled to a punitive damages award of no more than their litigation expenses less taxable costs in this action,” Judge Arterton wrote.
Attorney Fees Sought
The Frasers’ attorneys argued that they are entitled to $2,598,658 in attorney fees, based on their contingency fee agreements, and costs. Wyeth argued that the Frasers waived their right to punitive damages by failing to submit evidence of their litigation expenses in the first round of post-trial briefing.
Wyeth also argued that the contingency fee agreements are void and that the evidence of fees and costs is insufficient.
Judge Arterton found the Frasers did not waiver their right to provide evidentiary support of their litigation expenses.
‘Appeal Fee’ Rejected
The Frasers said the contingency agreements provide for one-third contingency fees of any recovery and an additional 16.667 percent fee if the judgment is appealed. Connecticut law caps contingency fees at 33.33 percent.
Judge Arterton said Wyeth lacked standing to challenge the validity of the contingency fees award. She said the 33.33 percent contingency fees are reasonable but said she had “serious concerns” about the propriety of the 16.667 percent appellate fee and declined to go above the 33.33 percent fee.
The judge also said Wyeth lacked standing to argue against certain costs for the plaintiffs’ attorneys, but she found that one charge, for “American Express,” is unidentified and that travel by a plaintiff attorney to observe another Prempro trial was unrelated to the Fraser litigation.
Taxable Costs Out
In addition, she said costs that can be taxed to the defendant for things like trial transcripts and witness fees cannot be made part of a punitives award because they can be sought in post-judgment motions.
Judge Arterton concluded that “an award equal to the full amount of permissible attorney’s fees and costs provided by Plaintiffs is appropriate in this action, as it is sufficient, but not greater than necessary, to achieve this purpose [of making the plaintiffs whole].”
The judge rejected the plaintiffs’ request to allow the punitive damages award to cover their common benefit assessment to be paid to the Plaintiffs’ Steering Committee of the Prempro MDL. She said the request is not supported by any case law the plaintiffs have pointed out.
Judge Arterton awarded $1,333,333 in attorney fees, $18,997 in costs for the plaintiff law firm of Ury & Moskow in Fairfield, Conn., and $417,601 to the Bubalo Firm in Louisville, Ky.
Judge Arterton rejected Wyeth’s argument that punitive damages are unconstitutional, excessive as a matter of Connecticut law, precluded by Wyeth’s exposure to other punitive damage awards and unsupported by the evidence. She said that under Izzarelli, punitive damages are set by the cost of litigation.
Izzarelli also held that punitive damages under Connecticut common law limitations comported to the requirements of the U.S. Supreme Court’s punitive damages decisions in State Farm Mutual Auto. Ins. Co. v. Campbell (538 U.S. 408 ) and BMW of North America v. Gore (517 U.S. 559 ) because “such an award was directly related to the harm suffered by the plaintiffs, in that it sought to make her whole by shifting the costs of pursuing the litigation to the defendant, and because the punitive damages award was less than half the compensatory damages award, which was well within the outer limit on the damages ration established by the Supreme Court.”
Any of Wyeth’s due process arguments that survive, the judge said, have been raised in post-trial briefing for judgment as a matter of law and will be addressed separately.
Likewise, the judge said Wyeth’s arguments about the sufficiency of evidence to support a punitive damages award are more appropriately addressed in a renewed motion for judgment as a matter of law.
Fraser also argued that she is entitled to pre-judgment interest. Judge Arterton said that request will be more appropriately addressed in a separate motion for pre- and post-judgment interest.
Fraser is represented by Gregory J. Bubalo and Paula S. Bliss of Bubalo, Goode, Sales & Bliss in Louisville, Ky., and Neal L. Moskow of Ury & Moskow in Fairfield, Conn.
Wyeth/Pfizer is represented by Michele A. Roberts of Skadden, Arps, Slate, Meagher & Flom in Washington, D.C.; Catherine B. Stevens of Skadden Arps in New York; Kelly Evans of Snell & Wilmer in Las Vegas; and James I. Glasser and Jeffrey R. Babbin of Wiggin & Dana in New Haven.
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