Opinion ID: 1360544
Heading Depth: 2
Heading Rank: 5

Heading: sufficiency of evidence for punitive damages

Text: Surgidev's next argument is that the trial court abused its discretion by submitting the issue of punitive damages to the jury because the evidence was insufficient as a matter of law to support an award of punitive damages. This claim is more properly characterized as an argument that a motion for a directed verdict on punitive damages should have been granted. C.E. Alexander & Sons, Inc. v. DEC Int'l, Inc., 112 N.M. 89, 96, 811 P.2d 899, 906 (1991). We note that on appeal we will not reweigh the evidence. We only examine whether substantial evidence supports the denial of a directed verdict after viewing the facts and all reasonable inferences in the light most favorable to the party resisting the motion. Id.; Bourgeous v. Horizon Healthcare Corp., 117 N.M. 434, 437, 872 P.2d 852, 855 (1994). We noted in Clay v. Ferrellgas, Inc., 118 N.M. 266, 269, 881 P.2d 11, 14 (1994), To be liable for punitive damages, a wrongdoer must have some culpable mental state, and the wrongdoer's conduct must rise to a willful, wanton, malicious, reckless, oppressive, or fraudulent level. See also Northrip v. Conner, 107 N.M. 139, 142, 754 P.2d 516, 519 (1988). In the context of a punitive damages claim, `reckless' is defined as `the intentional doing of an act with utter indifference to the consequences.' Ferrellgas, 118 N.M. at 269, 881 P.2d at 14 (quoting SCRA 1986, 13-1827 (Repl.Pamp.1991)). At issue here is whether Surgidev acted recklessly by failing to issue a warning regarding the implantation of the Style 10 using the ICCE procedure. Viewing the evidence in the light most favorable to Plaintiffs, we find that there is substantial evidence supporting the trial court's refusal to direct a verdict on the issue of punitive damages. At the outset, we note that all of the relevant data indicating significant long-term problems with the Style 10 was known by Surgidev as early as 1982. In fact, Surgidev compiled this data as required by the FDA. Surgidev's 1982 data indicated that 20 percent of the patients implanted with the Style 10 using the ICCE procedure ended up with low visual acuity (worse than 20/40 vision). This percentage was twice as bad as the percentage of low visual acuity experienced by patients implanted with the Style 10 using the ECCE procedure. This percentage was also five to seven percentage points worse than the rate of low visual acuity experienced by patients implanted with other anterior chamber lenses using the ICCE procedure. Surgidev's 1982 data also indicated that implanting the Style 10 using the ICCE procedure resulted in much higher rates of sight threatening complications. Over 10 percent of patients with a Style 10 lens implanted using the ICCE procedure experienced secondary glaucoma. [3] This figure was six times the rate of secondary glaucoma for the ECCE procedure and was well beyond the FDA's grid for acceptable complications rates. Furthermore, 10.2 percent of patients experienced macular edema [4] with the ICCE procedure, over twice the rate for the ECCE procedure and also well beyond FDA acceptable rates. The Panel also noted that there were statistically significant differences in the incidence of iritis [5] between the ICCE group and ECCE group of patients. In addition, experts testified that in 1983 the FDA revised its grid for acceptable rates of complications, which put Surgidev's data even further beyond the FDA's allowable norms. Furthermore, Surgidev was aware that its figures probably underestimated the percentage of complications in patients. In 1982 the Panel noted that Surgidev had a significantly lower response rate from the implanting doctors than the other lens implant companies, with only a 62 percent patient follow-up rate. In addition, one of Surgidev's representatives at the Panel hearing acknowledged that doctors tended to underreport the number of complications on the follow-up reports that they did send in. Additionally, Plaintiffs' expert, Dr. Drews, testified that the ICCE data showed that the Style 10 caused UGH syndrome [6] in some patients within one year of implantation, which was how long Surgidev monitored patients for complications. Drews also testified that when UGH syndrome appears in some patients within one year, the actual number of patients who will eventually experience it rises dramatically because the syndrome usually takes time to develop. Finally, Drews testified that Surgidev was aware of the likelihood of increasing incidences of UGH syndrome because the company had experienced similar problems involving UGH syndrome with earlier lens styles. Drews also testified that Surgidev failed to adequately follow up on long-term monitoring of sight threatening complications. In addition, Surgidev appointed the creator of the Style 10 as its medical monitor for the lens, even though he received royalties for each lens sold and was paid to actively promote the lens to hospitals across the nation. The medical monitor is responsible for the continued monitoring and evaluation of the data concerning the safety and effectiveness of the lens. 21 C.F.R. § 813.46(a) (1994). Surgidev's medical monitor for the Style 10, however, never submitted any monitoring reports to Surgidev or to the FDA. Thus Surgidev failed to keep adequately informed of the data that would have indicated potential problems. Surgidev strenuously argues that it could not have known that there was any problem with the lens given that the Panel voted unanimously to recommend approval for the Style 10 lens. However, Surgidev's argument fails to acknowledge the differences between the complication rates for the Style 10 used with the ICCE procedure versus the ECCE procedure. Drews testified that, of all the intraoccular lenses, the Style 10 was unique because its ICCE data showed a significantly higher complication rate than its ECCE data. The Panel noted that the differences in complications between the ICCE and ECCE procedures for the Style 10 lens were larger than those for other brands of intraoccular lenses, and it expressed strong concern over those differences. Although the ICCE data was well outside the FDA grid, the Panel noted that the ECCE data for the Style 10 was acceptable, and, according to Drews, the Panel was leaning over backwards to be fair to Surgidev by not rejecting the lens altogether. However, as a condition of its recommendation to the FDA for premarket approval, the Panel required that Surgidev include a warning on its label highlighting the differences between the risks associated with the ICCE and the ECCE procedures. According to Drews, the Panel had never previously required such a warning for an intraoccular lens. Labelling, however, is only required by the FDA once the lens actually receives premarket approval. From 1983 to 1986, the period when Surgidev actively pursued premarket approval and submitted proposed labelling for the Style 10 to the FDA, Surgidev made no effort to warn ophthalmologists of the risks identified by the Panel and specifically required in the future labelling. After the lens was returned to core status in 1986, Surgidev abandoned its proposed labelling efforts without ever having warned the medical community of the risks identified by the Panel in 1982. Drews testified that, according to the data Surgidev had in 1982, the Style 10 was unreasonably dangerous with the ICCE procedure, that only Surgidev had access to that data, and that Surgidev's failure to give any warning of the potential problems with the ICCE procedure was a betrayal of the medical community. He testified that if doctors had been aware of Surgidev's data on the ICCE procedure, they would have found those risks to be unacceptable for implantation of the Style 10 by the ICCE procedure. In addition, Plaintiffs demonstrated that independent studies conducted between 1985 and 1987 confirmed the problems of the Style 10. Yet, Surgidev continued promoting the use of its lens in conjunction with the ICCE procedure after 1987 without giving any warnings to the medical community. In Ferrellgas, 118 N.M. at 269, 881 P.2d at 14, we held: [A]s the risk of danger increases, conduct that amounts to a breach of duty is more likely to demonstrate a culpable mental state. The circumstances define the conduct; a cavalier attitude toward the lawful management of a dangerous product may raise the wrongdoer's level of conduct to recklessness, whereas a cavalier attitude toward the lawful management of a nondangerous product may be mere negligence. In measuring punitive damages the enormity and nature of the wrong must be assessed. In this case the risk of danger was the grave possibility that the recipient of the lens would go blind in the implanted eye. The Style 10 lens itself is an inherently dangerous product given that it is an experimental device inserted directly into the eye with potentially disastrous consequences in the event of product failure. Accordingly, a broader range of improper conduct with respect to such a product is sufficient to demonstrate a culpable mental state. Under the evidence presented by Plaintiffs, Surgidev knew as early as 1982 that Style 10 was substantially more dangerous when implanted using the ICCE procedure than the ECCE procedure; it knew that the rates of sight-threatening complications for the ICCE procedure were well outside the FDA's acceptable levels; and it knew that the Panel had singled out the Style 10 from the field of intraoccular lenses by making its recommendation for premarket approval contingent on the additional requirement that Surgidev give notice of the differences between the ICCE and ECCE procedures in its labelling. Evidence of Surgidev's initial promotion of the Style 10 for insertion by the ICCE procedure without any warnings to the implanting surgeons of the risks involved, and its continued promotion as late as 1988 in the face of mounting evidence corroborating the problems reflected by the 1982 data, is sufficient to demonstrate a reckless disregard for the safety and welfare of patients receiving Style 10 lenses. As the court in Baker v. Firestone Tire & Rubber Co., 793 F.2d 1196 (11th Cir.1986), noted: A legal basis for punitive damages is established in products liability cases where the manufacturer is shown to have knowledge that its product is inherently dangerous to persons or property and that its continued use is likely to cause injury or death, but nevertheless continues to market the product without making feasible modifications to eliminate the danger or making adequate disclosure and warning of such danger. Id. at 1200 (emphasis added); see also O'Gilvie v. International Playtex, Inc., 821 F.2d 1438, 1446 (10th Cir.1987) (noting that Playtex's promotion of its product with knowledge of studies showing causal link to toxic shock syndrome constituted reckless indifference to the rights of others), cert. denied, 486 U.S. 1032, 108 S.Ct. 2014, 100 L.Ed.2d 601 (1988); Cerretti v. Flint Hills Rural Elec. Coop. Ass'n, 251 Kan. 347, 837 P.2d 330, 346 (1992) (If a [defendant] has reason to believe its act may injure another, and so acts with indifference to whether it does or not, the [defendant] is guilty of wanton conduct.); Piper v. Bear Medical Sys., 180 Ariz. 170, 883 P.2d 407, 417 (Ct.App.1993) (A jury may infer an evil mind if defendant deliberately continued [its] actions despite the inevitable or highly probable harm that would follow.), review denied (Nov. 1, 1994). Surgidev counters that its compliance with FDA regulations precludes an award of punitive damages as a matter of law. It cites to Hines v. St. Joseph's Hospital, 86 N.M. 763, 766, 527 P.2d 1075, 1078 (Ct.App.), cert. denied, 87 N.M. 111, 529 P.2d 1232 (1974), for support. However, Hines only stands for the limited proposition that compliance with regulations is evidence of due care. Such evidence is not dispositive of the issue of negligence or recklessness. Contrary to Surgidev's assertions, compliance with federal regulations does not preclude a finding of recklessness or an award of punitive damages. Silkwood v. Kerr-McGee Corp., 769 F.2d 1451, 1456-58 (10th Cir.1985) (upholding punitive damages award despite defendant's compliance with federal nuclear safety regulations), cert. denied, 476 U.S. 1104, 106 S.Ct. 1947, 90 L.Ed.2d 356 (1986); Dorsey v. Honda Motor Co., 655 F.2d 650, 656-57 (5th Cir.1981) (noting that compliance with federal safety standards does not preclude a finding of recklessness), modified on other grounds, 670 F.2d 21 (5th Cir.), cert. denied, 459 U.S. 880, 103 S.Ct. 177, 74 L.Ed.2d 145 (1982); cf. Restatement (Second) of Torts § 288C (1964) (compliance with regulations does not preclude finding of negligence). Accordingly, Surgidev's evidence of compliance with FDA regulations was properly submitted to the jury for consideration in determining whether Surgidev acted recklessly in failing to warn of problems with the Style 10 when implanted using the ICCE procedure. [7] Viewing the evidence in the light most favorable to the verdict, we find that there was substantial evidence supporting the Plaintiffs' contention that Surgidev promoted the Style 10 for implantation by the ICCE procedure with utter indifference to the consequences. Ferrellgas, 118 N.M. at 269, 881 P.2d at 14. The trial court did not abuse its discretion by rejecting Surgidev's motion for a directed verdict and submitting the issue of punitive damages to the jury.