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U.S. District Court In Alabama Reduces Damages Pursuant To Supreme Court's Decision In State Farm


HLD, v. 31, n. 7 (July 2003)

U.S. District Court In Alabama Reduces Damages Pursuant To Supreme Court's Decision In State Farm

Seven plaintiffs brought suit against Metabolife International, Inc. for alleged injuries caused by the diet pill "Metabolife 356" because the pills were defective, unsafe, and caused personal injury to plaintiffs. Plaintiffs jointly filed a single complaint under the Alabama Extended Manufacturers Liability Doctrine. After a lengthy trial, the jury found for most of the plaintiffs and awarded various amounts of damages. Metabolife moved for a judgment notwithstanding the verdict or for new trials, and sought remittitur of the punitive damages awards. The court waited for the Supreme Court's decision in State Farm Mut. Auto. Ins. Co. v. Campbell, 123 S.Ct. 1513 (Apr. 7, 2003), before ruling on Metabolife's motion.

The U.S. District Court for the Northern District of Alabama reduced one damage award to the maximum amount permitted rather than granting remittitur. In State Farm, the damage awards were actual damages of $2.6 million and punitive damages of $145 million, and the high court had found the punitive damages to exceed what is allowable under the Due Process Clause. The court found that, while the High Court declined to impose a "bright-line ratio which a punitive damages award cannot exceed in State Farm," usually "single-digit multipliers are more likely to comport with due process."

Applying the State Farm ratio, the court determined most of the punitive damages awards in this case were not excessive. On the issue of the degree of reprehensibility, the court looked to the punitive damages that were awarded to punish Metabolife. Two plaintiffs testified they bought Metabolife 356 based on the label, and the court found the statements on the label about safety were sufficient for the jury to find that the statements were misleading, particularly in light of the fact that the safety claims were omitted from later labels. However, the court noted one plaintiff was awarded $1 million for Metabolife's reprehensible conduct, and the other plaintiff was only awarded $75,000 for the same conduct. Metabolife argued that Hammond/Green Oil should apply because the remedies for the two plaintiffs were excessive. In Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala. 1986), and Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala. 1989), the court set forth the procedures for post-trial review of allegedly excessive awards of damages. Metabolife invoked Hammond/Green Oil and requested remittiturs as the remedy for excessiveness. The court found that Johansen v. Combustion Engineering, Inc., 170 F.3d 1320 (11th Cir. 1999), replaced Hammond/Green Oil and that a court "has the power to reduce a jury verdict to a precise amount and to enter a final judgment on it." The court concluded that under Combustion Engineering it could reduce any excessive jury verdict to the constitutional limits. Accordingly, the court reduced one of the awards from $1 million to $450,000, which would be a ratio of nine times the actual damages, and denied all other requests for relief.

McClain v. Metabolife Int'l, Inc., No. CIV.A 01-AR-1801-S, 2003 WL 1961344 (N.D. Ala. Apr. 24, 2003) (11 pages). j   

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