Takeda Part Two: Destroy Evidence, Pay the Price — Eli Lilly and Takeda Pharmaceutical Co. Get Hit For $9 Billion Punitive Damages Verdict

Recently, in In re Actos (Pioglitazone) Products Liability Litigation, MDL No. 11-2299, a Louisiana federal jury awarded $9 billion in punitive damages against Takeda Pharmaceutical Co. (“Takeda”) and Eli Lilly & Co. (“Lilly”).  The verdict was delivered on the heels of Judge Rebecca Doherty’s January opinion, previously covered by this blog, which lambasted Takeda for failing to (1) enforce its own litigation hold and (2) follow its document retention procedures, which led to the destruction of relevant evidence that Judge Doherty found would have likely been beneficial for the plaintiffs’ case.

The verdict represented the first federal jury decision in multidistrict litigation against Takeda – Asia’s largest drug company – and Lilly, its American partner.  The plaintiffs alleged that the companies actively concealed the cancer risks of the diabetes drug Actos.  Takeda was hit for $6 billion, while Eli is responsible for $3 billion.  Despite the massive verdict, the jury only found that the plaintiffs were entitled to $1.5 million in actual damages.

It is highly likely that Judge Doherty’s opinion played a substantial role in the jury’s decision making.  Although she has not yet imposed any formal sanctions as a result of Takeda’s destruction of relevant documents and emails, she instructed the jury after closing arguments Monday that they could take Takeda’s evidence spoliation into account.  Additionally, throughout the trial, the jurors were exposed to voluminous evidence detailing Takeda’s conduct in destroying the relevant evidence.

While Takeda and Lilly may succeed in getting the punitive damage verdict greatly reduced, Takeda’s spoliation may continue to haunt it.  Since this is a multidistrict litigation, this issue is certain to arise in future trials.  Regardless of the future ramifications, the Actos matter acts as yet another reminder to companies of the importance of following proper document retention procedures.  Further, organizations are reminded to follow the terms of their own litigation holds, and appropriately draft their scope.  Failure to do so may result in drastic consequences.