2009 jury verdicts pounded corporations

Company executives gauge their standing with the public partly from verdicts U.S. juries hand down in business litigation. In 2009, they weren't very popular.

The top five product-defect verdicts rose 52 percent in total value last year to $620 million as juror attitudes on companies soured amid the recession and rising unemployment, according to data compiled by Bloomberg. Among the biggest losers were Altria Group Inc. and Pfizer Inc.

"It's a reflection of the fact that Main Street is hurting," said plaintiffs' attorney Tobias Millrood, winner of a $34 million verdict against Pfizer.

The largest product-liability verdict in 2009 was a $300 million award against Altria's Philip Morris unit in Florida state court. Five of the 50 biggest verdicts involved claims of defective goods, according to Bloomberg data. In 2008, just one such verdict -- $265 million -- made the list.

The largest verdict of any kind in 2009 was a $1.67 billion award to Johnson & Johnson's Centocor unit in June in a patent-infringement case against drugmaker Abbott Laboratories. It was the first billion-dollar jury award in more than two years and only the second since May 2005.

Pfizer lost verdicts of $78 million and $34 million last year in claims against its Wyeth unit over alleged breast cancer risks of its hormone-replacement drugs.

The $300 million loss in November by Richmond, Va.-based tobacco company Altria included the largest punitive damages verdict of 2009. Punitive damages in that case totaled $244 million while the plaintiff, a former smoker of Philip Morris products who developed cancer, was awarded $56 million for actual harm.

"Because of the mess with the banks, Bernie Madoff, people have less respect for companies," said Randy Barnhart, an Englewood, Colo., lawyer who won a $4.5 million verdict against Ford Motor Co. for a seat-belt defect.

Ford lost at least four defective-vehicle cases of $10 million or more, Bloomberg data show.

Notwithstanding the 2009 results, both plaintiffs and defendant companies are increasingly willing to take product liability cases to trial, said John Beisner, a lawyer who defends corporations in such suits.

"For plaintiffs, there's a perception that juries are more open to arguments about corporate behavior," said Beisner, a Washington-based lawyer. "On the defense side, it's the feeling that it's the right thing to do."

Victor Schwartz, an attorney who represents companies involved in product litigation, said some corporate defense lawyers aren't taking the negative attitudes into account as they question and pick jurors, a process called voir dire.

"Some jurors blame large corporations for loss of jobs or think they're uncaring," Schwartz said.

Plaintiffs' lawyers say jurors are more receptive than previously to claims of corporate negligence or wrongdoing in the development of consumer products.

Product-liability verdicts, while on the rise, didn't return to their peak in 2000, when 10 such verdicts were in the top 50.

Last year did reveal some bright spots for corporate defendants with a continued decline in the size of punitive-damage awards. Punitives, assessed in addition to compensatory damages, are meant to punish the company for bad conduct and serve as a warning to others. The 10 biggest punitive damages verdicts against corporations totaled less than $1 billion for the second straight year.

"Litigation is a little like the Pac-Man game," said Schwartz, a partner at Shook, Hardy & Bacon in Washington and general counsel of the American Tort Reform Association. "The defense Pac-Men were eating the plaintiffs for a while, but now, as in the game, the characters change and the eaters start getting eaten."