Allen v. Takeda Pharms. N. Am., Inc. (In re Actos&reg), Case No. 6:12-cv-00064-RFD-PJH

• Decision Date: 27 October 2014
• Docket Number: MDL No. 6:11-md-2299,Case No. 6:12-cv-00064-RFD-PJH
• Parties: IN RE: ACTOS® (PIOGLITAZONE) PRODUCTS LIABILITY LITIGATION This Document Applies To: Allen et al. v. Takeda Pharmaceuticals North America, Inc. et al.
• Court: U.S. District Court — Western District of Louisiana

IN RE: ACTOS® (PIOGLITAZONE) PRODUCTS LIABILITY LITIGATION This Document Applies To: Allen et al. v. Takeda Pharmaceuticals North America, Inc. et al.

Case No. 6:12-cv-00064-RFD-PJH

MDL No. 6:11-md-2299

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA LAFAYETTE DIVISION

October 27, 2014

JUDGE DOHERTY

MAGISTRATE JUDGE HANNA

MEMORANDUM RULING: DEFENDANTS' RULE 59 MOTION FOR NEW TRIAL (REC. DOC. 4348)

INTRODUCTION

Pending before this Court is the Defendants' Rule 59 Motion for a New Trial,¹ filed on behalf of all Defendants.² The Defendants have moved, pursuant to Rule 59 of the Federal Rules of Civil Procedure, for a new trial on all of the Plaintiffs' claims and/or argue for reduction of the punitive damages award.³ Briefing in this matter now being complete, the matter is ripe for ruling.⁴ For the following reasons, the motion will be GRANTED IN PART and DENIED IN PART.

PROCEDURAL HISTORY

These proceedings were instituted by the Judicial Panel on Multidistrict Litigation by order dated December 29, 2011.⁵ After little more than a year of litigation, upon request and agreement of the parties, this Court scheduled the trial in "Allen v. Takeda Pharmaceuticals North America, Inc.," Civil Action No. 12-0064, as an early trial or bellwether trial. The trial began on January 27, 2014; eleven weeks later, on the last day of trial, this Court gave the following instruction to the jury to guide its determination of whether the factual predicate for punitive damages existed in this case, i.e., whether the jury found that Defendants had engaged in wanton and reckless disregard of the effects of their actions.⁶

Now, under the applicable law, in addition to awarding damages to compensate Terrance Allen for his injuries, you may, but you are not required to, award Terrance Allen what are called "punitive damages." Now, in general, if you find that the Plaintiffs have proven, by a preponderance of the evidence, that the conduct of either Takeda and/or Eli Lilly was wanton - W-A-N-T-O-N - wanton and reckless with regard to Actos®, you may award punitive damages.

Conduct is considered wanton and reckless when it demonstrates conscious indifference and utter disregard of its effect upon the health, safety, and rights of others and is deemed so outrageous as to allow an award. Now, the purpose of what we call punitive damages is not to compensate the Plaintiff, but to punish either Takeda or Lilly, or both, for wanton and reckless acts and thereby discourage them and other companies from acting in a similar way in the future. The law provides that you can find punitive damages are owed by a party, here such as Takeda or Eli Lilly, only if you have first found that party liable to the Plaintiffs on at least one of the Plaintiffs' claims, In other words, you must have found Takeda liable to Terrance Allen on at least one of his claims against Takeda before you could award punitive damages against Takeda.

Also, you must first have found Eli Lilly liable to Terrance Allen on at least one of his claims against Eli Lilly before you could award punitive damages against Eli Lilly. Again, don't worry, the Jury Verdict Form is designed to ensure this, as I'll show you in a minute. Thus, using the Jury Verdict Form, you will not be able to consider punitive damages unless you have first found that either Takeda or Eli Lilly, or both of them, is or are liable to Terrance Allen.

Now, also, under the applicable law, neither Takeda nor Eli Lilly can be held liable for punitive damages unless the Plaintiffs have proven by a preponderance of the evidence that a "superior officer" of Takeda, as to Takeda's conduct, and of Lilly, as to Lilly's conduct, in the course of his or her employment, ordered, participated in, or ratified the relevant conduct.

Now, who is a relevant "superior officer" under the law? Under applicable law, a "superior officer" relevant to this inquiry is someone in management who has authorized, participated in, consented to, or ratified the conduct that led to the liability, or who was pursuing a recognized business system of Takeda, as to Takeda, or Eli Lilly, as to Eli Lilly.

Now, the term "superior officer" is more than an agent or "ordinary" officer or employee vested with just some supervisory or decision-making responsibility, but must be someone whose actions can be equated with participation by the company. However, a "superior officer" need not be someone located in the executive suite or the topmost reaches of the company, but he or she must have a high enough level of responsibility within the company that his or her participation in the wrongdoing renders the company blameworthy and arouses the "institutional conscience" for corrective action.

So, if you find that either the conduct of a "superior officer" of Takeda or the conduct of a "superior officer" of Eli Lilly does not meet the standard I have just explained, you will answer "no" on the Jury Verdict Form as to that company. On the other hand, if you find the Plaintiffs have proven, by a preponderance of the evidence, that the conduct of a "superior officer" of Takeda or the conduct of a "superior officer" of Lilly does meet the standard I have just explained, you should answer "yes" on the Jury Verdict Form.⁷

After due deliberation, the jury found that both Takeda and Lilly had engaged in wanton and reckless disregard of the effects of their actions.⁸ Once this factual predicate for the award of punitive damages had been found, this Court asked the jury to return to open court and only then provided the jury with the following additional instruction to guide its determination of the amount of the punitive damage awards:

Ladies and gentleman of the jury, you have now found that punitive damages are owed by Takeda and Lilly. As I instructed you earlier, punitive damages are designed to punish the Defendants for wanton and reckless outrageous conduct, and thereby punish Takeda and Eli Lilly and thereby discourage the Defendants and other companies from acting in a similar way in the future. You must now decide the amount of punitive damages to be awarded. In deciding upon that amount, you should consider the nature and the reprehensibility of the Defendants' conduct in this case. You should consider the character of the wrongdoing you have found occurred in this case.

For instance, the degree to which the Defendants, both plural possessive, conduct demonstrated an indifference to or a reckless disregard of the health, safety, or rights of others; the degree to which the conduct was done with an improper motive or vindictiveness; the degree to which the act or acts constituted - as I was saying, the degree to which the acts or acts constituted outrageous or oppressive intentional misconduct; how long the conduct went on, how long the conduct went on; the degree to which the Defendants, plural, were aware of what harm the conduct caused or was likely to cause; whether the harm caused was physical as opposed to economic; the degree of concealment or covering up of the wrongdoing; the actual and potential harm created by the Defendants', plural, conduct including the harm to Terrance Allen.

However, although you may consider harm to individuals or entities other than Terrance Allen in determining the degree to which the Defendants', again, plural, conduct was reprehensible, you may not add a specific amount to your punitive damages award to punish Takeda and Lilly for any harm they might have caused to others who are not parties in this case. In other words, a defendants' [sic] dissimilar acts independent from the acts upon

which liability was premised may not serve as the basis for punitive damages. Takeda and Lilly should be punished for the conduct that harmed Terrance Allen, not for being unsavory businesses.

The amount of punitive damages that you award must be both reasonable and proportionate to the actual and potential harm suffered by Terrance Allen and to the compensatory damages you awarded Terrance Allen. The degree of reprehensibility of Takeda's and Lilly's conduct is an important factor in deciding the amount of punitive damages that would be reasonable and proportionate in view of the harm suffered by Terrance Allen and the compensatory damages you have awarded.

Now you may also consider Takeda's and Lilly's financial condition and the impact your punitive damages award will have on Takeda and Lilly.⁹

This Court, also, instructed the jury that the parties had reached certain stipulations of fact, that those stipulations had been accepted by the Court, and, therefore, that the jury was required to accept these facts as proven. The stipulations of fact agreed to by the parties are as follows:

The parties stipulate to the following financial data for Takeda and Eli Lilly & Company.

The net worth for Takeda in fiscal year 2013 totaled $23,652,755,000 dollars. In fiscal year 2013, Eli Lilly's net worth totaled $17,631,000,000 U.S. dollars.

The net sales of Actos® in the United States - Your Honor, we've stipulated to individual amounts that we can put into the record that the jury can see, but in the interest of time, they range from [$]582 million in the early going, to by the year 2002, [$]1.1 billion; by the year 2006, [$]2.1 billion; by the year 2009, [$]2.7 billion; 2010, [$]3 billion; 2011, [$]2.6 billion; and then it tales [sic] back to [$]815,000 for 2012, for a total Actos® net sales between 1999 and 2012 of $24 billion dollar.

The total Actos® prescriptions written as of June 15, 2011, is more than 100 million. The total number of patients that were prescribed Actos® as of June 15, 2011, is more than 10 million.

And that concludes the stipulated tender.¹⁰

The trial ended on April 7, 2014 when the jury issued its complete verdict.¹¹ After finding in favor of the Plaintiffs on all factual and causation questions, the jury made the following compensatory damage awards:

To Terrence Allen: $1,150,000

To Susan Allen: $ 325,000

Total Compensatory Damages Awarded:

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