U.S. juries awarded three verdicts of $1 billion or more for the third straight year in 2013, with the highest being a $1.2 billion award against Dow Chemical Co. This verdict was the largest ever in a price-fixing case. Second was $1.1 billion awarded by a Florida jury in July against Trans Healthcare Inc. This verdict was to the estate of a woman who died following multiple falls. It was the largest-ever against a nursing home. The third highest was a $1 billion verdict in a suit against Lennar Corp. in which a California developer and his company were accused of defaming the homebuilder as part of an extortion scheme.
The nine verdicts of $1 billion or more in the past three years contrasts with the total of three such awards in the prior five years, according to data compiled by Bloomberg. The rise of billion-dollar verdicts mirrors the increase in the cost of settlements for allegations of corporate misconduct related to the financial crisis, according to Carl Tobias, a law professor at the University of Richmond. He observed:
There is some sort of a punitive aspect. Juries are more and more willing to require defendants to pay more if they’re bad actors, or there’s a perception that they’re bad actors.
Four of the top 50 jury verdicts of 2013 were in patent- infringement cases, down from 11 in 2012, according to data compiled by Bloomberg. Overall, awards of $100 million and up by U.S. juries fell one-third, to 20 in 2013 from an unusually high 31 in 2012. Juries in the past 15 years returned an average of 20 verdicts of $100 million or greater.
Antitrust awards provided three of 2013’s large verdicts, led by the $1.2 billion assessment against Dow Chemical, accused of conspiring with four other companies to fix prices on chemicals used to make urethanes. The Kansas City, Kan., jury awarded $400 million. The amount was tripled to $1.2 billion under U.S. antitrust law. The Plaintiffs, a class of industrial purchasers of the chemicals used to make such products as cushions, auto seats, and insulation, settled with the other Defendants for a total of $139 million before trial. The final judgment was reduced to reflect the settlements. Dow appealed the verdict.
In the other two antitrust cases, a jury in Texas awarded $113.5 million in September in a claim that Becton Dickinson & Co. tried to monopolize the safety-syringe market. The verdict is subject to trebling to $340.5 million. Becton Dickinson said it would appeal. A $162.3 million verdict was returned against two Chinese vitamin C makers in March. This was in a price-fixing claim brought by a class of U.S. customers. The award, since cut to $158 million to reflect prior settlements and lawyers’ fees, has been appealed. All three were small in comparison to the $5.7 billion Visa Inc.-MasterCard Inc. settlement with merchants over credit-card swipe fees. That settlement was reached in 2012 and approved in 2013.
Source: Insurance Journal
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