Trial Magazine
Theme Article
Punishing Corporate Wrongdoers
When you ask jurors to award punitive damages, it’s essential to empower them to punish unacceptable conduct. Don’t make the mistake of going back over the liability—it only diminishes the impact of your argument.
I had spent three months trying a case on behalf of Terrence Allen, a devoted father and husband from upstate New York who found himself in trial in Lafayette, La. Terry developed bladder cancer after taking the diabetes drug Actos. In this case, the defendants had known about the potential for Actos to cause bladder cancer, had created a document trail about such things, and then destroyed the documents after it became apparent that litigation might ensue.
I presented in court every day—every witness, every argument, day in and day out. One thing about questioning all the witnesses is that the jurors get to know you very well. The defense used three attorneys for presentations and examinations, so the jurors did not know those lawyers as well. I had a rhythm and flow with the jury, while the other side seemed choppy: When the defense lawyers completed a day’s work, they disappeared and weren’t heard from for another two days.
This gave me a measure of intimacy with the jurors that I hoped would help during closing argument for the punitive damages phase. The jury had already awarded actual damages, and it had found the liability that we needed for a second phase on punitives. The judge gave each side 10 minutes to make its argument. I dedicated seven and a half minutes to the argument, reserving two and a half minutes for my rebuttal. I began:
“Ladies and gentlemen,
thank you for your deliberations thus far. Thank you for finding the wrong conduct of the defendants as the cause of Mr. Allen’s cancer. Thank you for awarding him monetary damages to make him as whole as money can. Now we are about something totally different. Now we are about punishing the companies for their malicious behavior.
Punishment [pause]—think about that. If a person, if I were to do something wrong, on purpose, to the great harm or death of others, I would get punished. I would get sent to jail. My life would be ruined. And rightfully so. This is a bedrock of our society.
Yet when a company does something terrible—when a company hurts or kills people for money—there is no option of locking the company in jail. What we get to do is ‘fine’ that company. We get to assess punitive damages. You get to set those. No, you are charged by Her Honor to set those. And there are factors to consider when setting them. [At this point, I read the key charge language about the elements to be considered.]
How are you going to fine these defendants? Take Takeda Pharmaceutical. Here we have a Japanese company that is worth $60 billion. How do you fine a company worth $60 billion? Do we even know how much $60 billion is? We know a million, but a billion? Let’s put it into something that makes sense. Sixty billion dollars is 60 thousand million dollars. In other words, if I have $60 billion, I have 60 thousand million dollars.
Now if we eliminate the ‘million’ part of that, we can consider it a bit better. Let’s just say I have $60,000 in my pocket, and you want to fine me for causing cancer through behavior like you found here. What are you going to do, fine me $50? Fine me $100? When I have $60,000 dollars in my pocket? That is what it means to write down $50 million or $100 million for punitives. This company is worth $60,000 million. You need to speak to this company in an amount that it understands.
While you are back in the jury room, you can’t see them, but the executives of this company have their cellphones with the ringers on high. Within 30 seconds of your verdict being read, these executives are going to get a phone call. They will know within 30 seconds what you decide. Your voice will travel from this courtroom, around the globe, into the boardrooms of Takeda to the highest people in the company. And one of two things will happen. Either you will write punitives of something like $100 million—barely anything to them. Or you will write something strong, something meaningful, something that makes them say on their cellphones, ‘Can you repeat that? Did I hear you correctly?’ And then business will change. You will change the future.
Thank you, ladies and gentlemen.”
Why This Approach?
Why did I make the argument as I did? The answer is multifold, but it is based on the desire to get the jury to award a meaningful amount. I didn’t need to rehash the culpable conduct—that would have been a waste of valuable minutes. The jury knew the culpable conduct. It had already found malice and reprehensible conduct, or we would not be at this point.
I had to do three things:
- Emphasize the purpose of punitive damages.
- Motivate the jurors.
- Thwart any defense effort to wrangle the jury into some ineffective small number.
I had seven and a half minutes and knew that should be plenty. In fact, I didn’t want more time. Time is not your ally in this argument—brevity is.
Speak the company’s language. The purpose of punitive damages is to wake up the company, to get the decision-makers’ attention, to punish unacceptable conduct, and to make an example that speaks to the community at large. The judge had just read the charge so these purposes were explained to the jurors in direct language, but they needed that legalese put into real-life language. That was my responsibility.
What would it take to wake up this company? Everyday people know the consequences of criminal behavior. We know that if we do something outrageous that hurts or kills others, we risk imprisonment. This is a message that should resonate with jurors.
But the threat of incarceration doesn’t exist for a company. The jury doesn’t have the power to assess that punishment. So a real wake-up call has to start with the language of the company: money.
Understand the numbers. Of course, money is different for a big pharmaceutical company than for most people. Most people, and certainly most jurors, think in terms of their paychecks, their annual incomes, the cost of a car, or the cost of a house. But once you get into the idea of millions of dollars, you are in “no man’s land” until you provide some framework for understanding that amount of money.
The difference between $5 million and $500 million is almost undefinable to most jurors. This is certainly true once you get into billions and tens of billions. It is critical to put the amounts into comprehensible numbers. That is why I translated $60 billion into $60,000, a number that we can understand. Then we just need to add “million” at the end to make it right. Suddenly the jurors see the true value of things. Now they are plugged into the corporate world in a way that makes sense.
Empower the jurors. I think much of the motivation already lies in their hearts. Most jurors want to do right. They want to punish wrongdoing and make the world a safer place for themselves and their families. People are hardwired for justice.
But what the jurors really need—what is missing—is empowerment. When executives in Japan are going to hear what nine people in Lafayette, La., are saying, that is power! The jurors need to be told that their voices count—for good or bad. The jury can send a message that the defendants’ behavior that led to the injury will not be tolerated, or it can give them a slap on the wrist, and the bad conduct will happen again.
This empowerment is one of the most critical ways to motivate people to do what needs to be done. It also naturally leads to thwarting the defense’s arguments. It is hard for the defense to take issue with your argument, and anything they offer comes across as an excuse. No one likes excuses.
What Happened Next?
One of the three defense attorneys stood up for her closing. Part of the problem for the defense was that this lawyer represented only one-third of what the jurors had heard. The relationship between lawyer and jury is huge, and this put the defendants at a disadvantage.
The lawyer tried apologizing for the defendants’ actions. She said, “We got your message. We’re sorry. We will change things.” But that didn’t resonate with the jurors. My rebuttal was short—a few simple reminders about doing what is right. I told the jury:
Do any of us really think that your verdict on liability has changed the attitude of the company at corporate headquarters such that no punishment is necessary? All of your damages so far have simply compensated for the plaintiff’s loss. There is no punishment of the company. If you don’t punish this company—and I mean really punish this company, you are sending a message, and it is the opposite of the one you need to send. You are sending the message, ‘It’s OK if you do wrong. When you get caught, all you need to do is cry and ask for forgiveness.’ No, that is not the message you want to send.
That was all I needed to say. Thirty minutes later, the jury came back with $9 billion in punitive damages: $6 billion was assigned to Takeda Pharmaceutical Co., and $3 billion to Eli Lilly & Co., the American pharmaceutical company that distributed Actos for a time.
Sometime later, I had a chance to visit with the jury foreperson, who I had tried to strike for cause because he made it clear that he was against large damages and lawsuits in general. In the jury room, however, he argued for $15 billion in punitives and was talked down to the $9 billion figure. When one of the jurors suggested to the foreman that $750 million should be enough in punitive damages, the foreman took his truck keys out of his pocket, threw them on the table, and declared, “That’s like buying a new truck for this company. It’s nothing!”
On remittitur, the judge unfortunately cut the punitive damages down significantly, but only so that the ratio of punitive to actual damages would be smaller. The defendants entered into settlement negotiations almost immediately, and more than 5,000 cases were resolved within the next 18 months.
Were the results an anomaly? This jurisdiction is notorious for being defense-friendly and anti-big verdict. But the reason the jury awarded this level of punitives is simple: The wrong was egregious, it endangered many, and it led to my client’s bladder cancer. The jury was charged with punishing the defendants, and it assessed an amount that would do that very thing. This was justice.
W. Mark Lanier is the founder of The Lanier Law Firm in Houston. He can be reached at wml@lanierlawfirm.com.