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A $500 million damage award hardly makes news anymore

Outside Nevada, a Clark County district court jury's award of $500 million in damages to a man who contracted hepatitis C during a colonoscopy did not make much news. Guess the public -- or editors -- have become inured to jackpot justice, but as a vast expansion of failure to warn liability, the award warrants more attention.

It was a huge story in Nevada, the first high-profile lawsuit that grew out of a hepatitis C outbreak in the Las Vegas area. Henry Chanin and his wife claimed that Teva Parental Medicines -- manufacturer of the intravenous sedative, propofol - and Baxter Healthcare Corp., operator of the Desert Shadow Endoscopy Center the distributor of the product, were liable for the reuse of contaminated vials of the drug. From The Las Vegas Sun, "Plaintiff: $500 million 'exactly what was needed' to make statement in hepatitis C case":

Robert Eglet, who represents Henry, and Will Kemp, who represents Lorraine, argued throughout the four-week district court trial that the jumbo-sized vials of propofol encouraged reuse, leading to contamination and infection. They argued the 50-milliliter vials had no place in endoscopy centers, where a fraction of that amount is required for the routine procedures performed there.

Compensatory damages were $5 million, Teva was hit with $356 million in punitive damages and Baxter Healthcare Corp. was tagged with $144 million. Eglet must have been disappointed: He was seeking $1 billion.

Participating in a media conference call in his capacity as general counsel of the American Tort Reform Association, Victor Schwartz highlighted the verdict in the context of proper labeling and failure to warn. From the transcript (via Nevada News Bureau):

This was a simple warning: "One patient use only." It's not a complex warning, and it's easily understood by people. And if you're going to hold a company liable when a clear unequivocal warning is violated, the consequences of...for product manufacturers or for consumers in terms of availability of products is not a good consequence. That's what struck me about this case. I've never seen a case where you had an unequivocal warning about one specific risk, somebody doesn't follow it, and then there is liability. That's very odd. I just had never seen it before.

Teva has announced its intent to appeal. The Las Vegas Sun has done extensive reporting on the hepatitis C outbreak and the litigation, which you can read here.

Correction (2 p.m.): Baxter was being sued as distributor of the product. I misidentified the association. cw

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.