United States: Shut The Door On Punitive Damages "Experts"

Last Updated: June 25 2019
Article by James Beck

We know of only a couple of cases that have allowed "experts" to testify on the subject of punitive damages. First, in the Actos litigation, the court allowed a so-called "ability to pay" expert opinion to be presented to the jury. In re Actos (Pioglitazone) Products Liability Litigation, 2013 WL 6383104, at *5 (W.D. La. Dec. 4, 2013). What's that? We can only offer the description found in the opinion:

[The expert] provided a report that describes the methodology by which economists determine how large a payment a company can make without significantly interrupting its business operations. The report . . . discuss[es ] the two-step process that economists use to evaluate financial information and to determine whether a company has the wherewithal to make a large payout of whatever nature. Finally, [the expert] explains how economists use financial information to determine whether or not a company will be impacted by the obligation to make a large payment.

Id. at *2 (footnotes omitted).

Then, in the Pinnacle Hip litigation, plaintiffs were twice allowed to introduce punitive damages experts. First, in In re DePuy Orthopaedics, Inc. Pinnacle Hip Implant Products Liability Litigation, 2014 WL 3557345 (N.D. Tex. July 18, 2014), they were allowed to present expert "calculations" that opined on "the amount that Defendants could afford to pay before being adversely affected." Id. at *9-10. Essentially the same thing happened two years later, in In re DePuy Orthopaedics, Inc., 2016 WL 6271474 (N.D. Tex. Jan. 5, 2016), with a different expert permitted to opine on the defendant's "ability to run its business" despite punitive damages and "what constitutes a significant change in [defendant's] market value." Id. at *9. This expert made "calculations of figures which would not affect [defendant's] day-to-day operations. Id.

So, how did that work out?

Well in Actos, the jury that heard the opinion brought back a punitive damages award of $9 billion against two defendants. In re Actos (Pioglitazone) Products Liability Litigation, 2014 WL 5461859, at *7 (W.D. La. Oct. 27, 2014). Because the accompanying compensatory award was $1.475 million, id. at *46, the punitive damages award was blatantly unconstitutional (ratios of 5424/1 and 8136/1). Consequently, it was reduced by over 99% to a still outrageously excessive (ratio of 25/1) $36.875 million. Id. at *55. The case settled on appeal, so the constitutionality of even the reduced amount was never decided.

In Pinnacle Hip, the jury in 2016 awarded $60 million in punitives. Aoki v. DePuy Orthopaedics, Inc., 2016 WL 10828742, at *1 (N.D. Tex. July 5, 2016), reversed, 888 F.3d 753 (5th Cir. 2018) (awarding new trial for reasons unrelated to punitive damages). That award was illegal under Texas law, which capped punitive damages. See Tex. Civ. Prac. & Rem. Code § 41.008(b). Thus the punitive damages award was reduced to $1.834 million – a reduction of 97%. Aoki, 2016 WL 10828742, at *1. Because of the Texas statute, the original award's constitutionality did not have to be decided. We didn't find any further discussion of punitive damages in Pinnacle Hip in 2014, so that must have been the trial the defendants won, so the punitive damages expert never actually testified.

Based on that small sample, it seems undeniable that this kind of punitive damages-related expert testimony should never be allowed. Its sole purpose is to induce the jury to return verdicts that are either illegal, unconstitutional, or both. Expert testimony that causes the jury to act unlawfully cannot possibly "help the trier of fact" as required by F.R. Evid. 702(a). Or, as the Advisory Committee pointed out, when the Rules of Evidence were first adopted:

Under Rules 701 and 702, opinions must be helpful to the trier of fact, and Rule 403 provides for exclusion of evidence which wastes time. These provisions afford ample assurances against the admission of opinions which would merely tell the jury what result to reach, somewhat in the manner of the oath-helpers of an earlier day. They also stand ready to exclude opinions phrased in terms of inadequately explored legal criteria.

1972 Advisory Committee Notes to F.R. Evid. 704.

Actos and Pinnacle Hip deviated from had previously been an virtually unanimous rule that "expert testimony on punitive damages is neither desirable nor necessary, and indeed, would invade the sacrosanct role of the jury." Voilas v. General Motors Corp., 73 F. Supp.2d 452, 468 (D.N.J. 1999). Except for expert testimony limited to the amount of a defendant's net worth, expert testimony has – quite properly – been excluded as to punitive damages.

[T]he Court finds there are no credentials that could qualify an individual as a punitive damages expert, primarily because the area of assessing punitive damages, implicative of various societal policies and lacking any basis in economics, rests strictly within the province of the jury and, thus, does not necessitate the aid of expert testimony. . . . Under the guise of providing guidance to the jury, [the expert's] report in effect thwarts the jury's broad discretion by suggesting three approaches to ascertaining punitive damages and by calculating actual ranges of awards under each approach. The Court has no reason to believe [this expert], or any other expert for that matter, is more qualified than the average juror to make a straightforward determination whether to punish [defendant] and if so, to what extent.

Id. at 464 (citation and footnote omitted). See Lopez v. Geico Insurance Co., 2013 WL 9720887, at *2 (D.N.M. Oct. 9, 2013) ("punitive damages are entirely within the purview and ability of a jury to determine because they involve social, rather than economic concerns, and the assessment of those damages does not require any particular expertise"); Salinas v. State Farm Fire & Casualty Co., 2012 WL 5187996, at *5 (S.D. Tex. Feb. 23, 2012) ("punitive damages expert testimony "impermissible"; the "methods and calculations are merely a way to suggest a specific amount of punitive damages to the jury"); In re Welding Fume Products Liability Litigation, 2010 WL 7699456, at *49, 74 (N.D. Ohio June 4, 2010) ("an expert may not suggest the amount of an appropriate punitive damages award": expert "may not opine that a defendant could or should pay an amount in punitive damages within a certain range") (footnote omitted); Dering v. Service Experts Alliance LLC, 2007 WL 4299968, at *9 (N.D. Ga. Dec. 6, 2007) ("expert opinion on the amount of punitive damages is improper"; "[t]he amount of punitive damages is to be determined by the enlightened conscience of an impartial jury"); Anderson v. Boeing Co., 2005 WL 6011245, at *2 (N.D. Okla. Aug. 2, 2005) (no expert "is more qualified than the average juror to make a determination whether the proof merits punitive damages, and if so, to what extent"); Hayes v. Wal-Mart Stores, Inc., 294 F. Supp.2d 1249, 1250-51 (E.D. Okla. 2003) (testimony on amount of punitive damages that would "have no effect on the financial status of the" defendant" "would invade the province of the jury and would not be helpful").

In prescription medical product liability litigation, other courts have excluded the type of testimony that contributed to the illegal/unconstitutional verdicts in Actos and Pinnacle Hip. In a hormone therapy case, Lea v. Wyeth LLC, 2011 WL 13193321 (E.D. Tex. Sept. 16, 2011), the court excluded an expert's "opinion on potential methods of measuring punitive damages." Id. at *1. The testimony was both "problematic" and "prejudicial":

The more problematic issues are whether [the expert] is qualified to proffer an opinion on potential methods of measuring punitive damages and whether that opinion will assist the jury. [He] opines that punitive damages in this case may be measured in a manner equivalent to an SEC fine, an antitrust violation, or a $100 speeding ticket. The SEC metric would result in a range of punitive damages between $6.4 billion and $7.1 billion, the metric for an antitrust violation would yield a range of punitive damages between $19.1 billion and $21.3 billion, and the speeding-ticket metric would yield $168 million or $1.13 billion in damages. . . .

Even if these metrics would assist the jury, which the court need not decide, the court finds that the amounts proffered are wholly prejudicial to the extent that they are listed as part of a potential range of punitive damages.

Id. at *4 (citations omitted).

The same testimony was excluded in a second hormone therapy case. Baldonado v. Wyeth, 2012 WL 1520331 (N.D. Ill. April 30, 2012). The same expert purported to "extrapolate" from "SEC fines, antitrust violations, and speeding fines" to arrive at the supposed "proper level." Id. at *3. Didn't happen. The testimony itself "not proper." Id. "The amount, if any, is for the jury to decide based on the facts of this case and the applicable punitive damages law. Such expert testimony would invade the province of the jury." Id.

Also, in Burton v. Wyeth-Ayerst Laboratories Div., 513 F. Supp. 2d 708, 717 (N.D. Tex. 2007), a fen-phen case, the court found such testimony "wholly prejudicial." Neither a "suggestion of a range of jury awards" nor an "opinion on the potential economic impact of a specific punitive damage award" was admissible. Id. at 719. "The court cannot allow such random speculation to be presented to the jury under the guise of expert testimony." Id. at 717.

Thus, the general rule has always been that "punitive damages experts" are an oxymoron. Legitimate "experts" on punitive damages do not exist, except for the limited purpose of calculating a defendant's net worth, as the assessment of punitive damages is for the jury alone. Yes, a couple of notorious MDLs deviated from that rule in recent years. But the outcomes in Actos and Pinnacle Hip speak for themselves. Those results were predictably disastrous. Even those judges − whose mistaken decisions to allow such testimony had caused the problem in the first place − had to declare those punitive damages verdicts illegal (Pinnacle Hip) or unconstitutional (Actos). Thus, those deviations only reinforce the correctness of the general rule that excludes "experts" on punitive damages from testifying.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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