LEGAL NEWSLINE

LAS VEGAS (Legal Newsline) - A $500 million decision by a Nevada court has been criticized by the American Tort Reform Association in its annual Judicial Hellholes report.

ATRA says the injuries were clearly caused by other parties, but Teva Pharmaceutical Industries ($356 million) and Baxter Healthcare Services ($144 million) were blamed. The lawsuit involves a Hepatitis C outbreak apparently caused by the personnel at an endoscopy center.

Local health officials said the outbreak was caused by nurse anesthetists reusing propofol vials after they were contaminated by syringes reused on patients with Hepatitis C.

"The label for propofol clearly states that it is for single patient use only and that aseptic procedures should be used at all times," the report says.

"Despite the blatant misuse of the drug by clinic staff, the court found that by placing it in larger than typically needed vials, the manufacturer effectively encouraged such improper practices."

The doctor who ran the clinic is scheduled for a criminal trial on 28 felony counts next year. The plaintiff in the case contracted Hepatitis C during a colonoscopy and already settled with the doctor and his staff.

The lawyers for the drug companies Teva Parenteral Medicines and Baxter Healthcare called the verdict "grossly excessive."

Mark E. Tully and U. Gwyn Williams of Boston, who are representing Teva and Baxter, wrote in their appeal in June that they want the judge who heard the case to block the award.

Hepatitis C is an infection caused by a virus that attacks the liver and leads to inflammation. It is one of several hepatitis viruses and is generally considered to be among the most serious of these viruses. It is passed through contact with contaminated blood.

The jury, its May 7 verdict, found the two drug companies liable for the larger-sized vials.

Tully and Williams, in their court papers, called the "astronomical" jury verdict "unsupported by the evidence" and "in violation of defendants' due process rights."

The lawyers for the two companies wrote that the U.S. Supreme Court "has held that grossly excessive or arbitrary punitive damages awards are violative of a defendant's due process rights" and established three guideposts to help judges determine the constitutionality of such awards.

They include consideration of the reprehensibility of the defendant's conduct; the ratio of the punitive damages award to the actual harm inflicted on the plaintiff; and how the award compares with similar cases.

In their court papers, the lawyers ask District Judge Jessie Walsh to reduce to the award to a "single digit" ratio over the compensatory award the jury granted. They suggest $5 million is more reasonable than $500 million.

"Local legal observers predicted an astronomical verdict despite the clear responsibility of the clinic, citing the combination of a plaintiff-friendly judge, skillful plaintiffs' lawyers, and pharmaceutical company defendants," the report says.

The attorneys -- again pointing to the U.S. Supreme Court -- wrote that the Court has said any punitive damages awards in excess of four times the compensatory award "might be close to the line of constitutional impropriety."

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.