July 13, 2019

Court of Appeal affirms order that vacated $340 million punitive damages award against Johnston & Johnson (Echeverria v. Johnson & Johnson)

Two years ago a Los Angeles jury awarded $417 million, including $347 million in punitive damages, to a woman who claimed she developed ovarian cancer from talc in Johnson & Johnson's Baby Powder.  The trial court tossed out the punitive damages award, finding that the plaintiffs presented no clear and convincing evidence of malice, fraud, or oppression.

A few days ago, the Court of Appeal (Second District, Division Three) issued this published opinion affirming the trial court's ruling on punitive damages.  It's an important decision because it deals with a factual scenario that arises frequently in California punitive damages litigation.  The basic facts go something like this:

A manufacturer sells a product at a time when someone has posited that an ingredient in the product may increase the risk of cancer, but the issue is a question of scientific debate.  The plaintiff uses the product and develops cancer, and seeks punitive damages from the manufacturer on theory that it consciously disregarded a possible risk to human health.

The Court of Appeal explains that such evidence cannot support punitive damages, which must be based on a showing that the defendant was aware of probable dangerous consequences of its conduct.  For punitive damages purposes, it is not enough that someone somewhere identified a possible risk from the defendant's product.  If the scientific community had not reached agreement on whether there was an actual risk, then the defendant did not act with malice by selling the product.

So in this case, where the connection between talc and ovarian cancer remains under scientific investigation, the Court of Appeal said the jury could have reasonably concluded the defendant was negligent, but no reasonable jury could find by clear and convincing evidence that the defendant committed the sort of "despicable" conduct that warrants punitive damages.

Significantly, the court explained that scientific studies issued after the plaintiff's injury could not be used to prove the defendant's state of mind before the product was sold.  "Scientific evidence developed post-injury did not create a reasonable inference that [the defendant] was acting with malice, pre-injury, in failing to warn of probable dangerous consequences of the product."

While it may seem obvious that studies released in 2013 cannot shed light on a defendant's state of mind in the 1960s, California case law on this issue has been somewhat unclear.  This decision may help dispel some of that confusion.