Legal Malpractice

Judgment In Huge Punitiive Damage Legal Malpractice Case

By (Andrew Lavoott Bluestone)

The principal that attorneys may not be held in legal malpractice over questions of judgment, strategies at trial and the like is given especial prominence in this case.  Client is found liable for $ 7 Million in patent infringement and $20 million in punitives, for "especially reprehensible " behavior.  On appeal, attorneys succeed in reducing liability to $ 520.00, a stunning victory.  They did not appeal the punitive award of $ 20 million.  On remand the district court whittled the punitives way down , but the appellate court determined that they would stay at $20 million.  From Law.Com:

"A federal appeals court ruled Thursday that a major Washington law firm did not commit malpractice when it represented a client found liable for $20 million in punitive damages — and just $520 in actual damages.

The District of Columbia Court of Appeals determined that Finnegan, Henderson, Farabow, Garrett & Dunner's decision not to initially appeal the punitive damages award was a reasonable, tactical litigation strategy involving an unsettled point of law.

As a result, the appeals court affirmed a lower court's grant of summary judgment to the 350-attorney intellectual property law firm.

The three-judge panel's decision stems from an underlying patent infringement and fraud lawsuit against Biomet Inc. involving the company's manufacture of orthopedic devices. Following a 1996 jury verdict, a trial court found Biomet liable for $7.1 million in compensatory damages and $20 million in punitive damages. After the trial, Biomet hired Finnegan Henderson to handle post-trial motions and the appeal.

On appeal, the law firm did not challenge the punitive damages award as unconstitutional because the ratio of punitive to compensatory damages was only three-to-one, and because rearguing the issue would have required another examination of Biomet's conduct, which the lower court found was particularly reprehensible, the March 19 decision said.

The appeals court in the underlying case eventually reversed the lower court's finding of infringement against Biomet and remanded the case for recalculation.

On remand, the lower court held that Biomet was liable only for $520 in compensatory damages. At that point, Finnegan Henderson challenged the punitive damages award as excessive. It asserted that the 38,000:1 ratio of punitive to compensatory damages violated of due process. The lower court agreed, and reduced the punitive amount to $52,000.

But the appeals court determined that because Biomet had not initially appealed the punitive damages, it had waived its right to seek relief from the $20 million award. "

Full post as published by New York Attorney Malpractice Blog on March 23, 2009 (boomark / email).