$2.5B in Damages Possible for Worst U.S. Hepatitis C Outbreak - Decided
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$2.5B in Damages Possible for Worst U.S. Hepatitis C Outbreak

A Las Vegas jury is in deliberations over punitive damages totaling $2.5 billion against Nevada's largest health management organization and another provider for the worst U.S. outbreak of hepatitis C. The plaintiffs' attorneys, The Associated Press reports, want the stunning punitive damages to send a strong message to corporations and Wall Street: No more putting profits ahead of patient safety.

The jury last week awarded $24 million in compensatory damages -- but do the punitive damages go too far?

What are punitive damages?

Punitive damages, also known as exemplary damages, are awarded in cases of serious or malicious wrongdoing to punish the wrongdoer and, as in this case, deter others from behaving similarly.

The serious wrongdoing in this case involves an HMO referring patients to an endoscopy clinic run by a doctor who performed outpatient procedures using dirty needles, the AP reports. As a result, the worst hepatitis C outbreak in the U.S. More than 50,000 patients had to get tested for the infection. Especially troubling, it took three years for the outbreak to become public.

The big question for the jury is whether the HMO's actions rose above the level of negligence. Punitive damages can't be awarded for negligence alone. The conduct must have been willful, wanton, or reckless to constitute an intentional offense.

Here, the plaintiffs' attorneys are arguing that the HMO knew a doctor operating an outpatient endoscopy clinic was dangerous, but sent patients there anyway, the AP reports. Since specific intent is not required, the HMO did not need to know that the widespread transmission of hepatitis C was likely to result. Instead, the plaintiffs' attorneys only needed to prove that the HMO knew some kind of serious injury was a probable consequence of their sending patients to the clinic.

It is important to note that punitive damages cannot be awarded for wrongful acts performed in good faith. If the jury finds that the HMO genuinely did not know about the dangers of the endoscopy clinic, they cannot be punished with punitive damages.

The jury's out, but the court's still in

At the end of the day, even if the jury comes back with the astonishing $2.5 billion award, the amount could still be whittled down by the court. If the court believes that the $2.5 billion is excessive or unwarranted by the facts, it can remove punitive damages from the final judgment, or it can reduce the amount through a procedural process called remittitur.

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