The Pennsylvania Superior Court recently addressed the multiple issues of personal jurisdiction, spoliation, remittitur and delay damages in the case of Hammons v. Ethicon, Inc., 2018 Pa. Super. 172 (Pa. Super. June 19, 2018 Ott, J., Stabile, J., Stevens, P.J.E.) (Op. by Stabile, J.). The underlying case involved an appeal from a $12.8 million product liability jury award involving the design of a pelvic mesh medical device.
Defendants initially challenged Pennsylvania’s personal jurisdiction over them by way of preliminary objections. The Superior Court found guidance in the United States Supreme Court decision of Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, __ U.S. __, 137 S. Ct. 1773 (2017). The Court looked to three (3) elements to establish personal jurisdiction over a defendant. First, a defendant must have purposefully conducted activities within the forum state, or must have purposefully directed its conduct towards the forum state. Second, the plaintiff’s claim must “arise out of or relate to” the defendant’s activities in the forum state. Third, jurisdiction over the defendant must be “fair and reasonable” so as not to offend traditional notions of “fair play and substantial justice.” The Court found that specific personal jurisdiction in Pennsylvania was proper since the Defendant corporation had supervised the design and manufacturing process of the product in collaboration with a non-defendant Pennsylvania company. The Court also noted that the Defendant had worked closely with a physician who resides in Pennsylvania in developing the product. These two facts were enough to grant Pennsylvania personal jurisdiction over the foreign corporation.
The Superior Court then turned its attention to a claim by Defendant that the trial court had improperly admitted evidence of spoliation. It was alleged that a high-ranking employee of Defendant had destroyed thousands of documents relating to the development of the medical product. The trial court had permitted testimony from the employee about the document destruction but had declined to give an adverse inference instruction to the jury concerning the documents. On appeal Defendant argued that admission of the evidence amounted to a misapplication of the spoliation standards and was in essence an improper sanction against them. Sanctions for spoliation can include entry of judgment against the offending party, exclusion of evidence, monetary fines and adverse inference instructions to the jury and the sanction applied depends upon the degree of fault, degree of prejudice and whether a lesser sanction is available. Interestingly, the Superior Court found a 5th Circuit decision out of Louisiana instructive on the issue and held that spoliation standards do not apply when a trial court merely considers whether to permit evidence during trial that party destroyed documents. Rather, the proper standard to apply in assessing this type of evidence is the traditional test of relevance and unfair prejudice. The Superior Court found the evidence of document destruction, without any further instruction to the jury, to be relevant and the probative value of that evidence outweighed any unfair prejudice to the Defendant.
The court then addressed Defendant’s Motion for Remittitur which sought a reduction of the $5.5 million compensatory damages portion of the verdict. The court restated the standard under Pennsylvania law that the decision to grant a remittitur depends on whether the award of compensatory damages lies beyond “the uncertain limits of fair and reasonable compensation” or whether the verdict “so shocks the conscience as to suggest that the jury was influenced by partiality, prejudice, mistake, or corruption.” The test to be applied in reviewing a denial of remittitur is one of “clear” or “gross” abuse of trial court discretion. The Defendant asked the court to remit the verdict by comparing Plaintiff’s injuries to two other cases where remittitur was granted involving asbestos exposure and a knee injury. The Superior Court found the comparison lacking and upheld the denial of remittitur given the amount of evidence presented by Plaintiff as to her injuries.
Lastly, Plaintiff argued in a cross-appeal that it was error for the trial court to only award delay damages on the compensatory damage portion of the award as opposed to applying delay damages to the punitive damage award as well. Plaintiff argued that a Pennsylvania Supreme Court case decided in 1983, which held that delay damages can only be applied to the compensatory award, was no longer controlling since the Rule of Civil Procedure pertaining to delay damages, Pa.R.C.P. 238, had been subsequently amended in 1988. The court found that the 1988 amendments to Rule 238 were enacted to address issues concerning the potential fault of plaintiffs delaying a case coming to trial and did not alter the language of the Rule with respect the categories of damages for which delay damages could be awarded. As such, the Superior Court reaffirmed that delay damages cannot be imposed upon a punitive damage award.
