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Executive Summary

SUPREME COURT SCRUTINY OF PUNITIVE DAMAGE AWARDS SOUGHT BY PMA in an amicus curiae brief filed jointly with the American Medical Association on May 31. The brief was filed in an insurance industry case involving the question of whether an award of punitive damages violates the due process clause of the Fourteenth Amendment. "While the case before the Court may appear far removed from the context of pharmaceutical product liability litigation," the brief states, "the Court's decision will undoubtedly have a significant effect on this litigation." The brief emphasizes that "any award of punitive damages for lawful conduct approved in advance by the FDA must be deemed arbitrary and excessive in violation of the due process clause of the Fourteenth Amendment." A writ of certiorari in Pacific Mutual Life Insurance Company v. Cleopatra Haslip, et al. was granted by the Supreme Court April 2; no date has been set for a hearing. PMA has supported the concept of a government standards defense against punitive damages in legislation now pending before the Senate Judiciary Committee ("The Pink Sheet" May 28, T&G-14). The defense has been consistently opposed by consumer groups and was recently challenged by Rep. Weiss (D-N.Y.) in conjunction with the release of a General Accounting Office report on post-approval adverse reactions ("The Pink Sheet" June 4, p. 6). The PMA/AMA brief maintains that "a refusal to undertake demanding constitutional scrutiny of punitive damage awards under the due process clause would send precisely the wrong message: that pharmaceutical manufacturers are fair game for whatever multi-million dollar awards can be coaxed from sympathetic juries or pried from defendants in settlement. That message has been sent repeatedly by the lower courts. Should it receive this court's imprimatur, the distorting effect of excessive punitive damages will be substantially inceased." The pharmaceutical industry's "research and drug marketing decisions are particularly vulnerable to distortion from punitive damage awards imposed without adequate constitutional safeguards," the brief argues. "All drugs are unavoidably associated with adverse events in some patients; many of these events cannot be discovered prior to widespread distribution." The brief states that childhood vaccines and drugs for pregnant women are areas where "liability concerns already have had a demonstrable negative impact both on research and on the continued availability of beneficial products to the persons who need them." According to the brief, five states have enacted defenses to punitive damages for pharmaceutical manufacturers that have complied with relevant FDA approval and reporting requirements. The states are Arizona, New Jersey, Ohio, Oregon and Utah. The brief was prepared in conjunction with outside counselors Richard Kingham and Bruce Kuhlik (Covington & Burling).

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