Amicus Curiae Brief — Key Pharmaceuticals, Inc. v. Edwards

No. 02-342 |

IN THE a CLERK

Supreme Court of the Anited States

KEY PHARMACEUTICALS, SCHERING-PLOUGH

CORPORATION AND

SCHERING CORPORATION,

Petitioners,

if

FREDERICK D. EDWARDS, M.D.,

Respondent.

On Petition for a Writ of Certiorari to the

Oregon Court of Appeals

BRIEF AMICUS CURIAE OF THE

PRODUCT LIABILITY

ADVISORY COUNCIL, INC.

IN SUPPORT OF PETITIONERS

Hugh F. Young, Jr. Victor E. Schwartz

PRODUCT LIABILITY (Counsel of Record)

ADVISORY COUNCIL, INC. Leah Lorber

1850 Centennial Park Drive Cary Silverman

Suite 510 SHOOK, HARDY & BACON L.L.P.

Reston, Virginia 20191-1517 600 14” Street, N.W., Suite 800

(703) 264-5300 Washington, D.C. 20005

Of Counsel (202) 783-8400

Aitorneys For Amicus Curiae

ore

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ....0...........ccccccccssssscosocee. ii

INTEREST OF AMICUS CURIAE wo.eccececcccccccsececeees. l

STATEMENT OF THE CASE... .oceccecescccccesececeseees 2

SUMMARY OF ARGUMENT ...0...oceccccecceccccccececeeee. 3

PII access niscasececsocies dedi esreceeeniaedncencxsseces 4

I. BE Ee BION, scsnsenvvsennsienevesiccavaveneeenseeses 4

Il. MULTIPLE IMPOSITION OF

PUNITIVE DAMAGES FOR THE

SAME CONDUCT VIOLATES THE

REE R WS BIN sesicesevisicsdsonvessveveseviesrersesere 5

A. Double Punishment for the Same

Conduct is Fundamentally Unfair............ 5

B. Courts Raise Concerns About the

Due Process Implications of Multiple

Punitive Awards But Have Been

Unable to Develop a Consistent

or Effective Solution ............ccccccecccececeeeees 9

Il. CERTIORARI IS ALSO APPROPRIATE

TO DETERMINE WHETHER THE

DOUBLE PUNISHMENT IN THIS

CASE VIOLATES THE EXCESSIVE

PEI RelA E Os sven vcvinesessicersassivewsivvanducersevevens 15

IN sca isseiipatasvepeclleeaicaeewtcstacseneemaneesssis 18

il

TABLE OF AUTHORITIES

CASES Page

Abate v. A.C. & S., Inc.,

No. 8923704, slip op.

(hid. Cir. Ct. Dat. 9, Tee ccna 7

Bishop v. General Motors Corp.,

925 F. Supp. 294 (D.N.J. 1996) ................cc000e 7

BMW of N. Am. v. Gore,

617 US. GO (Ie cccansenccantereeeeee 9,11, 17

Browning-Ferris Indus. Of Vt., Inc.

uv. Kelco Disposal, Inc.,

492 US. Fd (IG? ccvsssetctenconeaaanne 11, 16

Cooper Indus., Inc. v. Leatherman Tool

Group, Inc., 582 U.S. 424 (2001) vccescccsovsssessesss 16, 17

Daubert v. Merrell Dow Pharm., Inc.,

43 F.3d 1311 (Oth Cig. TDDB) vicicevecsresessnssvesreses 9

Dunn v. Hovic,

1 F.3d 1371 (3d Cir.)

(en banc), modified in part,

1S F.3d GB (SG CAC. TIED sccicrsnstoncisnecniean 9,10, 14

Edwards v. Armstrong World Indus., Inc.,

911 F.2d 1161 (5° Cir. 1990) ccsccrrsnvcssserscssnncoes 7,8

——_~

ill

Fischer v. Johns-Manville Corp.,

Ee Fe Be UG A. LOD) ovsssnsvessscssrvrsecvesssnsvvenss 15

Froud v. Celotex Corp.,

BE FA OE EE, BOGE) ccvesvivcrcsecssssnssvnanneness 6

Furman v. Ga.,

BUTE ais cncnsncennvnvayrévesensevontaseyssents 17

Gertz v. Robert Welch, Inc.

Oe A 6 OD gin cvsntevcidccinnssvanntvesssnenessaies 16

Hudson v. United States,

OE Do sta vasusadndanednbovacs ebanstveonnes 12

In re “Agent Orange” Prod. Litig.,

100 F.R.D. 718 (E.D.N.Y. 1983),

affd 818 F.2d 145 (2d Cir. 1987),

cert. denied sub nom

Pinkey v. Dow Chem. Co.,

I ME © MND oid cresesenscesnnsanavanensnsunecesss 11

In re Federal Skywalk Cases,

680 F.2d 1175 (8th Cir. 1982),

cert. denied, 459 U.S. 988 (1982) ................... 13

In re N. Dist. of Cal. “Dalkon Shield”

IUD Prod. Liab. Litig.,

526 F. Supp. 887 (N.D. Cal. 1981),

vacated and remanded on other

grounds, 693 F.2d 847 (9™ Cir. 1982),

cert. denied, 459 U.S. 1171 (1983) .............000 11, 13

iV

In re School Asbestos Litig.,

789 F.2d 996 (3d Cir.),

cert. denied, 479 U.S. 852 (1986) ....... 10

Jackson v. Johns-Manville Corp.,

781 F.2d 394 (5th Cir. 1986),

cert. denied, 478 U.S. 1022 (1986) ........0.... 14-15

Juzwin v. Amtorg Trading Corp.,

705 F. Supp. 1053, 718 F. Supp. 1233

(D.N.J. 1989), rev'd on other grounds

sub nom Juzwin v. Asbestos Corp..,

900 F.2d 686 (3d Cir.), cert. denied,

GED US. BOG CABG) «.<0csversesessosrasscssesusenis seiteaae 11,12

Keene Corp. v. Levin,

623 A.2d 662 (Md. App. 1993) ......... ee 7

King v. Armstrong World Indus., Inc.,

906 F.2d 1022 (5" Cir. 1990),

cert. denied sub nom

Celotex Corp. v. King,

Se OF Te ED treneiecsevexencinsinsaicinbshonimenasans 10

Leonen v. Johns-Manville Corp.,

717 F. Sapp. 272 (D.N.d. LBBB) «....00ecesescvesoosses 12,14

McBride v. Gen. Motors Corp.,

737 F. Supp. 1563 (M.D. Ga. 1990) ................ 17

Owens-Corning Fiberglas Corp. v.

Malone, 972 S.W.2d 35 (Tex. 1996)................. 15

Pacific Mut. Life Ins. Co. v. Haslip,

GBD US. 1 CED) siscictinnticnioteennetennoas 12,16

Racich v. Celotex Corp.,

887 F.2d 393 (2d Cir. 1989) ...........sececsssesevnsess 13

Roginsky v. Richardson-Merrell, Inc.,

376 F 28 BER Be Cit. BD erica 5-6

Spaur v. Owens-Corning Fiberglas Corp.,

510 N.W.2d 854 (Iowa 1994)...............ccecceeeeeeee 15

State Farm Mutual Automobile Ins. Co.

uv. Campbell, No. 981564,

2001 WL 1246676 (Utah Oct. 19, 2001),

cert. granted, 122 S. Ct. 2326 (2002)

CEG, RII cnxecossesicincniensnactaniastaaaae 4

Tetuan v. A.H. Robins Co.,

TSE P.2e 1210 Chan. 1GBZ) o....ccssescsessssecseeosviene 13, 14

Turpin v. Merrell Dow Pharm., Inc.,

736 F. Supp. 737 (E.D. Ky. 1990),

aff'd, 959 F.2d 1349 (6th Cir. 1992) .......0.0.... 9

TXO Prod. Corp. v. Alliance Res. Corp..,

BOO U.S. 668 Ce scscicescnienanscmennente 12

STATUTES AND REGULATIONS

Or. REV. STAT. § 18.540(1)(b) (2001) «0.2.0.0... 3

OTHER AUTHORITIES

2 Am. Law Inst., Reporters' Study,

vi

Enterprise Responsibility for

FOPOSUME TANTS CIDE) serisstiassssinscimenctensiies 12

Mark A. Behrens, Some Proposals for Courts

Interested in Helping Sick Claimants and

Solving Serious Problems in Asbestos

Litigation, 54 Baylor L. Rev. 331 (2002)......... 7

John Calvin Jeffries, Jr., A Comment on the

Constitutionality of Punitive Damages,

TB VO. Rise TOG. LEP CI vecvswshccssiveamcatiiionsinnss 10

Dennis Jones et al., Multiple Punitive Damages

Awards for a Single Course of Wrongful

Conduct: The Need for a National Policy

to Protect Due Process,

GO AMM. in TG: T CRIES cccrniescsstinisintiacsicaainians 10

Bruce N. Kuhlik & Richard F. Kingham,

The Adverse Effects of Standardless

Punitive Damage Awards on

Pharmaceutical Development and

Availability, 45 Food Drug

Coats. Le. &. GE CHGNPET “ssesviianiitisnnmanesenseceunan 8

David G. Owen, A Punitive Damages

Overview: Functions, Problems,

and Reform, 39 Vill. L. Rev.

BS CRIED scsescnccsscctnenssueerlsnbeienMeundemumeaaa 10

David G. Owen, Problems in Assessing

Punitive Damages Against

Manufacturers of Defective Products,

GB U, Cae. Ey BRM, 0 Gi icitinnindsetancetsndnan 13-14

Vil

W. Page Keeton et al., Prosser and Keeton on the

Law of Torts (5th ed. 1984).............. eee eeeeee eee 16

Gary T. Schwartz, Mass Torts and

Punitive Damages: A Comment,

ee VW aees Bn, Bes GE CRED cocccccoscizveccceceonscvcresens 12

Victor Schwartz & Liberty Magarian,

Multiple Punitive Damage Awards

in Mass Disaster and Product Liability

Litigation: An Assault on Due Process,

© POE Tan BB CI cscccesocerescuescunenqcossaconnss 10, 14

Victor E. Schwartz et al., Prosser, Wade

and Schwartz’s Cases and Materials

Ce ON CR eee OU, Bt secesneckcnaccccssnsconcteensetes 15

William Schwartzer, Punishment Ad

Absurdum, 11 Cal. Law. 116 (Oct. 1991)...... 8

IN THE

Supreme Court of the United States

No. 02-342

KEY PHARMACEUTICALS, SCHERING-PLOUGH

CORPORATION AND

SCHERING CORPORATION,

Petitioners,

Vv.

FREDERICK D. EDWARDS, M.D.,

Respondent.

On Petition for a Writ of Certiorari to the

Oregon Court of Appeals

PRODUCT LIABILITY ADVISORY COUNCIL,

INC.’S BRIEF AMICUS CURIAE IN SUPPORT

OF PETITIONERS

INTEREST OF AMICUS CURIAE'

The Product Liability Advisory Council, Inc. (PLAC) is

' Petitioners’ and Respondent’s letters of consent to the filing of this

brief amicus curiae by the Product Liability Advisory Council, Inc., have

been lodged with the Clerk of the Court. No counsel for either party has

authored this brief in whole or in part, and no person or entity other than

the amicus has made a monetary contribution to the preparation or sub-

mission of this brief.

2

a non-profit association with 126 corporate members repre-

senting a broad cross-section of American and international

product manufacturers. These companies seek to contribute

to the improvement and reform of law in the United States

and elsewhere, with emphasis on the law governing the li-

ability of manufacturers of products. PLAC's perspective is

derived from the experiences of a corporate membership that

spans a diverse group of industries in various facets of the

manufacturing sector. In addition, several hundred of the

leading product liability defense attorneys in the country are

sustaining (non-voting) members of PLAC. Since 1983,

PLAC has filed over 600 briefs as amicus curiae in both

state and federal courts, including this Court, presenting the

broad perspective of product manufacturers seeking fairness

and balance in the application and development of the law as

it affects product liability. A list of PLAC's corporate mem-

bers is attached as Appendix A.

This case is of interest to amicus because it provides a

sound vehicle for this Court to address the due process

problems created by the imposition of multiple punitive

damages awards. The members of amicus are active in the

business and manufacturing communities and their members

are the primary victims of excessive and repetitive punitive

damages awards. Ultimately, the impact of runaway puni-

tive damages awards is felt by the consumer who purchases

goods and services. Amicus has a unique understanding of

the impact of multiple punitive damage awards, as well as

the due process implications of inflicting multiple punitive

damage awards against a single defendant for the same con-

duct.

STATEMENT OF THE CASE

PLAC adopts and incorporates Petitioners’ statement of

the case.

3

SUMMARY OF ARGUMENT

This case crystallizes the thirty-year debate about the

constitutional due process issue presented by double pun-

ishment in civil actions. Distinguished judges and scholars

have grappled with the constitutional implications of multi-

ple punitive damages awards since such awards became

common in tort actions in the late 1960s and early 1970s.

They have recognized that the very core of due process pre-

vents double punishment for the same wrongdoing. Multiple

awards also raise Eighth Amendment concerns in situations

like this one where a portion of punitive damage awards are

to be paid to the state.”

While state and lower federal courts have acknowledged

the constitutional due process issue, these individual courts

are powerless to create and enforce the nationwide resolution

that this problem requires. They have made do with a

hodgepodge of stop-gap approaches, while calling for direc-

tion at a national level.

This case provides a unique opportunity for this Court to

address an issue that only it can resolve — due process viola-

tions created by the multiple imposition of punitive damages

for the same conduct. No state court or state legislature has

the power address this subject. It is not one on which Con-

gress is likely to take action. The Court also has the oppor-

tunity to address the application of the Excessive Fines

Clause in civil cases where the state is to share in the puni-

tive award. For these reasons, the Petition for Writ of Cer-

tiorari should be granted.

2 At the time of the case, the State of Oregon was entitled to fifty per-

cent of a punitive damage award according to statute. The statute has

since been amended to increase the amount of a punitive damage award

that a successful plaintiff must share with the state to sixty percent of the

award. See Or. Rev. Stat. § 18.540(1)(b) (2001).

4

ARGUMENT

I. INTRODUCTION

This case puts squarely before this Court the constitu-

tionality of multiple punitive damage awards against a single

defendant for the same course of conduct. In the instant

case, an Oregon jury awarded two separate parties punitive

damages against Key Pharmaceuticals based on the exact

same evidence of the defendant’s alleged nationwide course

of conduct presented during a single trial. The same alleged

wrongful in- and out-of-state conduct was used as a predicate

for two separate punitive damage awards, as well as to aug-

ment each individual award. Unlike a situation involving

multiple trials against a common defendant, there is no issue

as to the identity of the conduct to be deterred or punished.”

In this case, the jury both awarded punitive damages to a

patient who alleged he was injured because of the defen-

dant’s conduct, and to the patient’s physician, Dr. Edwards,

who claimed that the defendant’s conduct had damaged his

professional reputation because of the plaintiff’s injury. It is

remarkable that the jury was permitted to award Dr. Edwards

punitive damages. His conduct helped bring about plaintiff's

injury. He failed to read a series of warnings about the de-

> This Court agreed in State Farm Mutual Automobile Insurance

Company v. Campbell, to consider whether the Due Process Clause per-

mits a punitive damages award to be premised on out-of-state conduct of

a defendant that has no bearing on plaintiff's injury. No. 981564, 2001

WL 1246676 (Utah Oct. 19, 2001), cert. granted, 122 S. Ct. 2326 (2002)

(No. 01-1289). While the instant case involves punitive awards based on

nationwide conduct, it more importantly presents a unique and important

opportunity for this Court to address constitutional due process issues

raised by multiple punitive awards. As important as the issue of extrater-

ritorial punishment is, Campbell does not involve an issue for which in-

dividual state and lower federal courts have cried out for direction for

three decades.

5

fendant’s Theophylline product, Theo-Dur™ -- including a

specific warning that the drug’s interaction with a second

drug, Ciprofloxacin, could cause the toxicity problem alleged

by the patient. It is even more astonishing and unconstitu-

tional that Supreme Court of Oregon permitted an award for

punitive damages to both the injured patient and Dr. Ed-

wards. This is why.

II. MULTIPLE IMPOSITION OF PUNITIVE DAM-

AGES FOR THE SAME CONDUCT VIOLATES

THE CONSTITUTION.

As Petitioners’ brief makes clear, the jury in this case

was permitted to make two awards of punitive damages, one

of $35 million and another of $22.5 million, for the defen-

dant’s alleged wrongful conduct in the marketing of its

pharmaceutical product Theo-Dur.™ The core of the con-

stitutional violations is that the jury considered precisely the

same wrongful conduct of the defendant in each case, yet

was permitted to make two separate, very large awards pun-

ishing the defendant for that conduct.’

A. Double Punishment for the Same Conduct is Fun-

damentally Unfair.

As long ago as 1967, the distinguished Judge Henry

Friendly appreciated the fundamental unfairness of punish-

ing a defendant again and again for the same harm. He said:

The legal difficulties engendered by claims for pu-

nitive damages on the part of hundreds of plaintiffs

* - Dr. Edwards’ counsel may contend that the defendant did not endure

double punishment because it settled the case with the injured plaintiff.

This is an empty assertion. The amount of the settlement was inflated by

the jury’s very large punitive damage award of $35 million to the plain-

tiff. Imposing a second punitive damage award of $22.5 million for that

same conduct is a double punishment, regardless of the identity of the

person to whom it was to be paid.

6

are staggering ... . We have the gravest difficulty

in perceiving how claims for punitive damages in

such a multiplicity of actions throughout the nation

can be so administered as to avoid overkill.

Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832, 839 (2d

Cir. 1967) (addressing availability of multiple punitive dam-

ages awards in products liability cases). As Judge Friendly

recognized, the punitive damages remedy historically was

limited to intentional torts (such as assault and battery) in

cases involving a single victim, so that “a punitive recovery

by him ends the matter, except for such additional liability as

may be provided for by the criminal law.” Jd. at 838. Even

when punitive damages practice was extended beyond inten-

tional torts to cases where a defendant acted in conscious

disregard to the interests of others, the number of plaintiffs

were still few and therefore punitive damages were unlikely

to result in “over-severe admonition” of the defendant. Jd. at

838-39 & n.7.

Multiple punitive damages awards present significant

problems for plaintiffs and defendants. As Judge Friendly

and other jurists have appreciated, the unfairness and devas-

tating impact of multiple punishment is not only felt by de-

fendants, it also can jeopardize the rights of future plaintiffs.

See Roginsky, 378 F.2d at 839-42. For instance, multiple

“windfall” recoveries of punitive damages deplete a defen-

dant’s limited resources. Such damage awards may eventu-

ally drive a defendant out of business, no matter how large or

how wealthy the defendant. See generally Froud v. Celotex

Corp., 437 N.E.2d 910, 914 (fll. 1982) (Sullivan, J., concur-

ring) (“‘[I]t cannot be denied that the spectre of the destruc-

tion of companies, and even individuals, as a result of puni-

tive damage awards is a threatening, present reality.”).

Repetitive awards ultimately endanger the ability of fu-

ture claimants to recover even basic compensatory damages.

7

This problem is particularly visible in the asbestos context

where at least 56 companies have declared bankruptcy, in

part due to multiple punitive damage awards and the infla-

tion of settlements caused by such claims. See generally

Mark A. Behrens, Some Proposals for Courts Interested in

Helping Sick Claimants and Solving Serious Problems in

Asbestos Litigation, 54 Baylor L. Rev. 331, 339, 352-57

(2002). Over 200,000 asbestos cases are pending nationwide

and 700,000 more cases are expected to be filed by 2050.

See id. at 337. Fortunately, some courts have severed, de-

ferred, or stayed indefinitely repetitive punitive damage

claims in asbestos cases to protect the ability of current and

future claimants to receive compensatory awards. See, e.g.,

Abate v. A.C. & S., Inc., No. 8923704, slip op. at 26 (Md.

Cir. Ct. Dec. 9, 1992) (staying all punitive damage awards in

Baltimore City asbestos cases); Keene Corp. v. Levin, 623

A.2d 662, 663 (Md. App. 1993) (noting a trial court judge’s

deferral punitive damage payments “until all Baltimore City

plaintiffs’ compensatory damages are paid.”’).

As one federal court of appeals warned, “If no change

occurs in our tort or constitutional law, the time will arrive

when [a defendant’s] liability for punitive damages imperils

its ability to pay compensatory claims and it corporate exis-

tence.” Edwards v. Armstrong World Indus., Inc., 911 F.2d

1151, 1155 (5" Cir. 1990); see also Bishop v. General Mo-

tors Corp., 925 F. Supp. 294, 298 (D.N.J. 1996) (“Indeed,

one of the many cogent criticisms of punitive damages is that

multiple punitive [damage] liability can both bankrupt a de-

fendant and preclude recovery for tardy plaintiffs.”’).

Corporate bankruptcies have a devastating “ripple” effect

that can extend far beyond the defendant company to injured

persons who are thereafter unable to recover compensation

for their injuries. Company employees may lose their jobs.

Other businesses that rely on the company or its employees

may lose income. Economic harm to the company also af-

8

fects shareholders, such as pension funds and ordinary citi-

zens, and other investors who face the loss of their savings.

As the Fifth Circuit recognized, “Neither the company’s in-

nocent shareholders, employees and creditors, not future . . .

claimants will benefit from this death by attrition.” Edwards,

911 F.2d at 1155.

Multiple imposition of punitive damages also poses a

significant obstacle to global settlement negotiations in re-

petitive litigation and blocks the ability of claimants to re-

cover quickly for their injuries or the loss of loved ones. As

one federal district judge wrote: “Barring successive punitive

damages awards against a defendant for the same conduct

would remove the major obstacle to settlement of mass tort

litigation and open the way for the prompt resolution of the

damage claims of many thousands of injured plaintiffs.” See

William Schwartzer, Punishment Ad Absurdum, 11 Cal.

Law. 116 (Oct. 1991).

The potential for multiple punitive damage awards can

also have a chilling effect on job-creators and the general

public, who are denied socially beneficial products. See

generally Bruce N. Kuhlik & Richard F. Kingham, The Ad-

verse Effects of Standardless Punitive Damage Awards on

Pharmaceutical Development and Availability, 45 Food

Drug Cosm. L. J. 693 (1990) (“There is a growing body of

evidence that the threat of punitive damages deters the de-

velopment and marketing of beneficial products.”). For in-

stance, this chilling effect is illustrated by the litigation in-

volving the drug Bendectin, a unique and effective anti-

nausea morning sickness drug once marketed by Merrell

Dow Pharmaceuticals, Inc. Although the drug had been and

still is approved by the Food and Drug Administration and is

widely acclaimed by health care professionals worldwide,

Merrell Dow withdrew Bendectin from the market in 1983,

in part from concerns about punitive damages liability. See

SS a ee ere

9

id. at 693.° As this case demonstrates, the sheer unpredict-

ability of the current system results in over-deterrence.

Finally, multiple punitive damage awards undermine the

integrity of the justice system by transforming it into a lot-

tery where a few people collect arbitrary “wins” at the ex-

pense of everyone else — the company, its employees, its

shareholders, and ordinary consumers. With the exception

of those lawyers who reap windfalls from repetitive punitive

damages, nobody can seriously argue that repeatedly pun-

ishing anyone for a single act makes sense or benefits soci-

ety.

At some point, punitive damages no longer serve to pun-

ish and deter, but instead become grossly excessive in viola-

tion of the Fourteenth Amendment. See BMW of N. Am. vy.

Gore, 517 U.S. 559, 568 (1996). The due process unfairness

of imposing multiple punitive damages cannot be allowed

when the defendant has already been punished. In a series of

sequential cases, such an admission would jeopardize the

defendant’s ability to have a fair trial. In this instance, where

multiple punitive damages awards were made in the same

case, the issue was virtually impossible to address with the

jury.

B. Courts Raise Concerns About the Due Process Impli-

cations of Multiple Punitive Awards But Have Been Unable

to Develop a Consistent or Effective Solution.

Many judges® and commentators’ have voiced concern

that punishing a defendant over and over again for the same

> Merrell Dow has never lost a final judgment in any Bendectin

case in the twenty-year history of the litigation; trial judges often dismiss

these cases prior to trial. See, e.g., Daubert v. Merrell Dow Pharm., Inc.,

43 F.3d 1311 (9th Cir. 1995); Turpin v. Merrell Dow Pharm., Inc., 736 F.

Supp. 737 (E.D. Ky. 1990), aff'd, 959 F.2d 1349 (6th Cir. 1992).

° See, e.g., Dunn v. Hovic, | F.3d 1371, 1385 (3d Cir.) (en banc),

modified in part, 13 F.3d 58 (3d Cir. 1993) (“The principle issue impel-

10

course of conduct raises “serious due process concerns.”® As

the Third Circuit recognized, “powerful arguments have

been made that, as a matter of constitutional law or of sub-

stantive tort law, the courts should shoulder some responsi-

bility for preventing repeated awards of punitive damages for

the same act or series of acts.” In re School Asbestos Litig.,

789 F.2d 996, 1005 (3d Cir.), cert. denied, 479 U.S. 852

(1986). The Northern District of California also expressed

concern that:

overlapping damage awards violate that sense of

‘fundamental fairness’ which lies at the heart of

constitutional due process. Certainly the principle

of res judicata, the notion that litigation must come

to an end, that a party cannot sue or be sued repeat-

edly on the same cause of action, is a part of the

process that is due under our constitutional system.

ling us to take this otherwise routine product liability case in banc is the

effective of successive punitive damage awards in mass tort cases arising

from the same course of conduct: We, as well as other courts, have ex-

pressed strong concerns in that regard.’’)

See, e.g., David G. Owen, A Punitive Damages Overview: Func-

tions, Problems, and Reform, 39 Vill. L. Rev. 363, 394 (1994) (observing

that the issue of multiple punitive damage awards “is a problem of enor-

mous complexity which requires much analysis and ingenuity”); Victor

E. Schwartz & Liberty Magarian, Multiple Punitive Damage Awards in

Mass Disaster and Product Liability Litigation: An Assault on Due Proc-

ess, 8 Adelphia L. J. 101 (1992); Dennis Jones et al., Multiple Punitive

Damages Awards for a Single Course of Wrongful Conduct: The Need

for a National Policy to Protect Due Process, 40 Ala. L. Rev. 1 (1991);

John Calvin Jeffries, Jr.. A Comment on the Constitutionality of Punitive

Damages, 72 Va. L. Rev. 139 (1986).

8 Dunn, | F.3d at 1385; see also King v. Armstrong World Indus., Inc.,

906 F.2d 1022, 1033 (5 Cir. 1990) (while “acutely conscious” of Judge

Friendly’s “prophetic words” about adverse effects of multiple punitive

damages, binding Fifth Circuit precedent requires panel to set aside its

“misgivings” and reject defendant’s constitutional argument against

multiple punitive damages awards), cert. denied sub nom Celotex Corp.

v. King, 500 U.S. 942 (1991).

1]

In re N. Dist. of Cal. “Dalkon Shield” IUD Prod. Liab.

- Litig., 526 F. Supp. 887, 899 (N.D. Cal. 1981), vacated and

remanded on other grounds, 693 F.2d 847 (9" Cir. 1982),

cert. denied, 459 U.S. 1171 (1983).’

One of the many courts that have wrestled with the

problem expressly held that “subjecting defendants to the

possibility of multiple awards of punitive damages for the

single course of conduct . . . would deprive defendants of the

fundamental fairness required by the Due Process Clause.”

Juzwin v. Amtorg Trading Corp., 705 F. Supp. 1053, 1064,

vacated, 718 F. Supp. 1233 (D.N.J. 1989) (abiding by previ-

ous ruling that repetitive awards of punitive damages for the

same conduct violate due process), rev'd on other grounds

sub nom Juzwin v. Asbestos Corp., 900 F.2d 686 (3d Cir.),

cert. denied, 498 U.S. 898 (1990). That district court as-

tutely acknowledged that although an award in an individual

case may be fair and reasonable, the aggregate amount of

repeated awards may be constitutionally excessive. Jd. at

1055. Simply stated, redundant awards of punitive damages

“cannot be tolerated under requirements of due process if it

amounts to unrestricted punishment.” Jd. at 1064.'°

° See also In re “Agent Orange” Prod. Litig., 100 F.R.D. 718, 728

(E.D.N.Y. 1983) (“[WJhen a plaintiff recovers punitive damages against

a defendant, that represents a finding by the jury that the defendant was

sufficiently punished for the wrongful conduct. There must, therefore, be

some limit, either as a matter of policy or as a matter of due process, to

the amount of times a defendant may be punished for a single transac-

tion.”), aff'd 818 F.2d 145 (2d Cir. 1987), cert. denied sub nom Pinkey v.

Dow Chem. Co., 484 U.S. 1004 (1988).

10 While this Court has ruled that the Excessive Fines Clause of the

Eighth Amendment does not apply in purely private actions seeking pu-

nitive damages, Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal,

Inc., 492 U.S. 257, 268 (1989) (no Excessive Fines violation where gov-

ernment does not participate in punishment), excessiveness concerns are

critical to the analysis of the constitutionality of punitive damages awards

under the Due Process Clause. See, e.g., BMW of N. Am. v. Gore, 517

12

Many lower courts express strong concern about the con-

Stitutionality of multiple punitive damage awards, but have

taken a variety of conflicting approaches in attempting to

craft a solution. Some courts have attempted to craft inno-

vative solutions but have fallen short of their goal; others

have adopted short-term solutions to resolve the case imme-

diately before them; still other courts have abdicated respon-

sibility altogether because no one state or lower federal court

can solve the problem.

One lower federal court sought to resolve the constitu-

tional due process problem by allowing only one punitive

award based on a single course of conduct in mass tort liti-

gation. See Juzwin, 705 F. Supp. at 1065 (where defendants

can establish that punitive damages already have been as-

sessed for conduct at issue in the action, “the court will dis-

miss plaintiff's claim for such punitive damages”). This

ruling was overturned on other grounds, see 900 F.2d 686,

and other courts have declined to endorse this approach.

See, e.g., Leonen v. Johns-Manville Corp., 717 F. Supp. 272,

283-84 (D.N.J. 1989) (Juzwin solution is “arbitrary,” “harsh

and inequitable” and creates a race to the courthouse door).

U.S. 559 (1996); Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 18 (1991);

TXO Prod. Co. v. Alliance Res. Corp., 509 U.S. 443 (1993). Similarly,

while this Court has seemingly indicated that the Double Jeopardy

Clause may not apply to private suits seeking punitive damages, Hudson

v. United States, 522 U.S. 93 (1997), double jeopardy concerns are ech-

oed in the Due Process Clause and its guarantee of fundamental fairness.

See Gary T. Schwartz, Mass Torts and Punitive Damages: A Comment,

39 Vill. L. Rev. 415, 423-31 (1994) (suggesting that “the core of the pro-

hibition against double jeopardy is probably included in the Due Process

guarantee,” and arguing its applicability to multiple punitive damages

that take into account total harm); 2 Am. Law Inst., Reporters’ Study,

Enterprise Responsibility for Personal Injury 260 (1991) (concluding

that repeatedly penalizing corporate defendants for a single wrongful

judgment or action is “antithetical to the protection against double jeop-

ardy that characterizes overtly penal regimes”).

——————————————

13

Other courts have attempted to solve the problem by cer-

tifying the punitive damages issue for class action resolution.

In product liability litigation over the Dalkon Shield, for ex-

ample, the federal district court sought to address the prob-

lem by certifying a nationwide class action on the issue of

punitive damages. See In re Dalkon Shield, 526 F. Supp. at

893. The court explained that to balance multiple plaintiffs’

rights to obtain punitive awards with the defendant’s due

process rights “the class action is the best available device to

protect the interests of all parties.” Jd. at 900. As noted by

the Ninth Circuit on appeal, though, commonality and pre-

dominance issues undermine this approach. See 693 F.2d at

850. The Ninth Circuit rejected the nationwide class certifi-

cation for a variety of reasons — including the conflicting

state laws governing punitive damages. See id. at 850-52

(stating that “a class action ... is not the only way to protect

a defendant from unreasonable punitive damages,” but fail-

ing to offer any suggestions on how that could be done); see

also In re Federal Skywalk Cases, 680 F.2d 1175 (8th Cir.

1982), cert. denied, 459 U.S. 988 (1982) (reversing certifi-

cation of punitive damages class for lack of commonality

factors and violation of the Anti-Injunction Act).

Some courts have suggested that defendants introduce

evidence at trial that they have been impacted by prior puni-

tive damage awards. See, e.g., Racich v. Celotex Corp., 887

F.2d 393, 398 (2d Cir. 1989) (recognizing the potential for

“serious constitutional concerns” in the multiple imposition

of punitive damages for the same conduct but declining to

address the issue because the defendant “neither adequately

raised this legal argument nor made sufficient record on it in

the trial court”). But defendants who are focused on liability

in a particular case should not be expected to introduce evi-

dence of prior punitive damage awards resulting from the

same conduct. Such information would be highly prejudi-

cial. See David G. Owen, Problems in Assessing Punitive

14

Damages Against Manufacturers of Defective Products, 49

U. Chi. L. Rev. 1, 52-53 (1982) (noting that “for obvious

tactical reasons,” a defendant “fairly might wish to avoid

presenting” such information to the jury during the liability

phase of a trial).

Moreover, some courts have suggested that multiple pu-

nitive damage awards cannot pose a due process issue unless

the defendant is on the verge of collapse. See, e.g., Tetuan v.

A.H. Robins Co., 738 P.2d 1210, 1243-44 (Kan. 1987)

(finding in Dalkon Shield litigation that there was insuffi-

cient information before the court to determine whether

multiple punitive damage awards would lead the defendant

to insolvency); Leonen, 717 F. Supp. at 286 (finding that

“the ‘overkill argument is not entirely without merit,” but

“[t]here is nothing before the court which indicates that any

of the defendants . . . are facing bankruptcy”). While being

forced into bankruptcy by repetitive punitive awards for the

same misconduct certainly would signal a violation of due

process, surely such constitutional protections are triggered

at some earlier point, before the defendant business is wiped

out. See Victor E. Schwartz & Liberty Magarian, Multiple

Punitive Damage Awards in Mass Disaster and Product Li-

ability Litigation: An Assault on Due Process, 8 AdelphiaL. .

J. 1, 73 (1992) (“It is incongruous to suggest that awards of

punitive damages for the same conduct need not be reined in

until the defendant is teetering on the brink of extinction.”).

Individual courts have thrown up their arms and declared

that they are powerless to resolve a problem which requires a

national solution. They have asked this Court for guidance.

See, e.g., Dunn, 1 F.3d at 1389 (raising concerns about po-

tential for due process violations from multiple punitive

damages awards in asbestos cases, but declining to be so

“intrepid” as to “iterate a blanket policy judgment . . . in light

of the Supreme Court’s studied silence on the policy issue”);

Jackson v. Johns-Manville Corp., 781 F.2d 394, 417 (Sth

15

Cir.) (Clark, J., dissenting) (arguing that multiple punitive

damages issue was matter of national public policy and

should have been certified to the United States Supreme

Court “because matters of national public policy have na-

tionwide application”), cert. denied, 478 U.S. 1022 (1986).

As the Supreme Court of Texas declared, “It may be that a

truly uniform solution can only be fashioned by either the

[United States] Supreme Court or Congress.” Owens-

Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35 (Tex.

1996). Likewise, the Iowa Supreme Court has stated,

We do not disagree that the problem of successive

punitive damages awards in mass tort cases arising

from the same conduct is a serious one .. . . We be-

lieve neither our action nor legislative action in Iowa

will curb the problem of multiple punitive damages

awards in mass tort litigation.

Spaur v. Owens-Corning Fiberglas Corp., 510 N.W.2d 854,

865-66 (Iowa 1994). The New Jersey Supreme Court also

expressed its frustration when it commented that “[a]t the

state court level, we are powerless to implement solutions to

the nationwide problems created by [multiple punitive dam-

age awards.]” Fischer v. Johns-Manville Corp., 512 A.2d

466, 480 (N.J. 1986).

III.CERTIORARI IS ALSO APPROPRIATE TO

DETERMINE WHETHER THE DOUBLE PUN-

ISHMENT IN THIS CASE VIOLATES THE

EXCESSIVE FINES CLAUSE.

Not only may double punishment violate the defendant’s

due process rights, the state’s recovery of half of the punitive

award is additional cause for concern. Punitive damages are

not ordinary civil or tort law damages.'’ Unlike compensa-

See Victor E. Schwartz et al., Prosser, Wade and Schwartz’s Cases

and Materials On Torts, 549-50 (10th ed. 2000).

16

tory damages, which provide payment for economic losses

(e.g., lost wages and medical expenses) and noneconomic

injuries (e.g., “pain and suffering”), punitive damages are not

awarded to compensate for a harm. See Gertz v. Robert

Welch, Inc., 418 U.S. 323, 350 (1974) (noting that punitive

damages “are not compensation for injury . . . [but] are pri-

vate fines levied by civil juries to punish reprehensible con-

duct and to deter its future occurrence”).'* Rather, punitive

damages are “quasi-criminal” in nature and “operate as ‘pri-

vate fines’ intended to punish the defendant and deter future

wrongdoing.” Cooper Indus., Inc. v. Leatherman Tool

Group, Inc., 532 U.S. 424, 432 (2001) (quoting Pac. Mut.

Life Ins. Co. v. Haslip, 499 U.S. 1, 19 (1991)).

Given the quasi-criminal nature of punitive damage

awards, repeated punishment for the same course of conduct

may not only violate due process, but also may run afoul of

Eighth Amendment’s prohibition of excessive fines. As the

relevant portion of the Amendment states, “Excessive bail

shall not be required, nor excessive fines imposed, not cruel

and unusual punishments inflicted.” U.S. Const. amend.

VUI. In Browning-Ferris, 492 U.S. at 262, 266, the Court

ruled that the Excessive Fines Clause “appl[{ied] primarily,

and perhaps exclusively, to criminal prosecutions and pun-

ishments” and its “primary focus” was not concerned with

civil damages. However, the Court also qualified its ruling,

noting that the Excessive Fines Clause “does not constrain an

award of money damages in a civil suit when the govern-

ment neither has prosecuted the action nor has any right to

receive a share of the damages awarded.” Id. at 264 (empha-

sis added).

12 See also W. Page Keeton et al., Prosser and Keeton on the Law of

Torts, § 2, at 9 (Sth ed. 1984) (explaining that punitive damages are

awarded to punish defendant, teach defendant not to “do it again,” and

deter others from similar behavior).

17

More recently, in Cooper Industries, the Court recognized

that although states have broad discretion in imposing crimi-

nal penalties and punitive damages, “the Due Process Clause

of the Fourteenth Amendment . . . imposes substantive limits

on that discretion.” 532 U.S. at 433. That Clause makes the

Eighth Amendment’s prohibition against excessive fines and

cruel and unusual punishments applicable to the states. 532

U.S. at 434-35 (citing Furman v. Ga., 408 U.S. 238 (1972)

(per curiam)). In the present case, the state’s collection of a

share in the multiple punitive damage awards imposed

against the same defendant for identical conduct may result

in an unconstitutionally excessive fine, irrespective of the

awards’ excessiveness under the Gore factors. '

'S See McBride v. Gen. Motors Corp., 737 F. Supp. 1563 (M.D. Ga.

1990) (ruling that the Georgia statute allocating 75% of punitive damage

awards to the state’s general fund was unconstitutional because it “con-

verts the civil nature action of the prior Georgia punitive damages statute

into a statute where fines are being made for the benefit of the State,

contrary to the constitutional prohibitions as to excessive fines and con-

trary to the double jeopardy clause of the Fifth Amendment to the Con-

stitution of the United States”’).

18

CONCLUSION

For the foregoing reasons, amicus curiae Product Liabil-

ity Advisory Council, Inc. requests that this Court grant the

Petition for a Writ of Certiorari in this action.

Respectfully submitted,

Victor E. Schwartz

(Counsel of Record)

Leah Lorber

Cary Silverman

SHOOK, HARDY & BACON L.L.P.

600 14th Street, N.W., Suite 800

Washington, D.C. 20005

(202) 783-8400

Attorneys for Amicus Curiae

Dated: October 7, 2002

APPENDIX A

la

PRODUCT LIABILITY ADVISORY COUNCIL, INC.

CORPORATE MEMBERS

3M

Allegiance Healthcare Corporation

Altec Industries

American Suzuki Motor Corporation

Andersen Corporation

Anheuser-Busch Companies

Ansell Healthcare, Inc.

Appleton Papers, Inc.

Aventis Pharmaceuticals Inc.

BASF Corporation

Baxter International, Inc.

Bayer Corporation

Beretta U.S.A Corp.

BIC Corporation

Biro Manufacturing Company Inc.

Black & Decker (U.S.) Inc.

BMW of North America, LLC

Bombardier Recreational Products

BP Amoco Corporation

Bridgestone/Firestone, Inc.

Briggs & Stratton Corporation

Bristol-Myers Squibb Company

Brown and Williamson Tobacco

2a

Brown-Forman Corporation

Brunswick Corporation

Caterpillar Inc.

Centerpulse USA Inc.

Chevron Corporation

Compaq

Continental Tire North America, Inc.

Cooper Tire and Rubber Company

Coors Brewing Company

Crown Equipment Corporation

DaimlerChrysler Corporation

Dana Corporation

Deere & Company

Delphi Corporation

Dore] Juvenile Group, Inc.

E & J Gallo Winery

E. I. DuPont de Nemours and Company

Eaton Corporation

Eli Lilly and Company

Emerson Electric Co.

Engineered Controls International, Inc.

Estee Lauder Companies

ExxonMobil Corporation

FMC Corporation

Ford Motor Company

3a

General Electric Company

General Motors Corporation .

Georgia-Pacific Corporation

GlaxoSmithKline

GLOCK, Inc.

Great Dane Limited Partnership

Guidant Corporation

Harley-Davidson Motor Company

Harsco Corporation, Gas & Fluid Control Group

Honda North America, Inc.

Hyundai Motor America

International Truck and Engine Corporation

Isuzu Motors America, Inc.

Johnson & Johnson

Johnson Controls, Inc.

Joy Global Inc.

Kawasaki Motors Corp., U.S.A,

Kia Motors America, Inc.

Kolcraft Enterprises, Inc.

Kraft Foods North America, Inc.

Mazda (North America), Inc.

McNeilus Truck and Manufacturing, Inc.

Medtronic, Inc.

Mercedes-Benz of North America, Inc.

Michelin North America, Inc.

4a

Miller Brewing Company

Mitsubishi Motor Sales of America, Inc.

Niro Inc.

Nissan North America, Inc.

Novartis Pharmaceuticals Corporation

Otis Elevator Company

PACCAR Inc

Panasonic

Pentair, Inc.

Pfizer Inc.

Pharmacia Corporation

Philip Morris Companies Inc.

Polaris Industries, Inc.

Porsche Cars North America, Inc.

Purdue Pharma L.P.

Raytheon Aircraft Company

Remington Arms Company, Inc.

Rheem Manufacturing

RJ Reynolds Tobacco Company

Schindler Elevator Corporation

SCM Group USA Inc.

Sears, Roebuck and Co.

Shell Oil Company

Siemens Corporation

Smith & Nephew, Inc.

Sa

Snap-on Incorporated

Sofamor Danek, Medtronic Inc.

Solutia Inc.

Sturm, Ruger & Company, Inc.

Subaru of America, Inc.

Sunbeam Corporation

Synthes (U.S.A.)

Textron, Inc.

The Boeing Company

The Dow Chemical Company

The Goodyear Tire & Rubber Company

The Heil Company

The Lincoln Electric Company

The Procter & Gamble Company

The Raymond Corporation

The Sherwin-Williams Company

The Toro Company

Thomas Built Buses, Inc.

Toshiba America Incorporated

Toyota Motor Sales, USA, Inc.

TRW Inc.

UST (U.S. Tobacco)

Volkswagen of America, Inc.

Volvo Cars of North America, Inc.

Vulcan Materials Company

6a

Water Bonnet Manufacturing, Inc.

Whirlpool Corporation

Wilbur-Ellis Company

Wyeth

Yamaha Motor Corporation, U.S.A.

Zimmer, Inc.