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Bayer through Monsanto was recently ordered to pay 289M USD in damages in the case of one individual who became ill allegedly by way of a weedkiller substance and there are 5000 similar lawsuits. The case will be appealed.

In the absence of information about the result of future appeals, the expected value of damages awarded, would be the same 289M USD. When lawsuits are "similar" it means expectations of damages can reasonably be higher as well as lower in the other lawsuits but the expectation, in the arithmetic sense of the word, would be the same. The expected damages of 5000 cases is 1.4T USD and since gross world product is about 100T that is 1.4% of annual output. Compared to the value the world's people produce in a year, a person might be inclined to say the total damages of 1.4% is not unreasonable. If all the world's people are not collectively responsible they would still have to "pay" when the cost of damages is integrated into the price of things people buy or into the value of their investment funds whether individually held or through an institution such as a pension fund. If the average person produces output for 40 years the burden appears to be 0.00035 times lifetime output. The damages of the total of all of the similar cases is near 14 times the market value of the equity of Bayer and near 38 times the accounting equity.

Since the suffering of 5000 persons and families can seem to be infinite, and the same can be said of the suffering of just one person, an observer might be inclined to say that even damages of 1.4T USD is not unreasonable. (Edit: Of course by this reasoning, 1.4T is unreasonably short of infinite.)

Typically how is the amount of damages determined in this type of industrial product case and does the process for determining it change at different levels in the court system?

Link to a press article on the verdict.

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An order that lowers the damages imposed by a jury, even if liability is not changed is called a remittitur.

Damages consist of compensatory economic damages (e.g. lost wages and future medical costs), compensatory non-economic damages (e.g. pain and suffering), and exemplary damages (a.k.a. punitive damages). Economic damages usually follow in a fairly straightforward way from the evidence. Non-economic damages and exemplary damages call for more of an exercise in community judgment by the jury. (Some portion of a damages award may also be for pre-judgment and post-judgment interest and for attorneys' fees and litigation costs, all of which are calculated in a more straightforward manner.)

The linked story does not tell us how these damages were broken down by type. A very large compensatory non-economic damages award is harder to reverse than a very large exemplary damages award. According to this report regarding the award by a California court:

[The jury] awarded Johnson some $250 million in punitive damages and $33 million in compensatory damages.

Compensatory damages are not subject to any dollar limitations except by state statute, but must be supported by the evidence.

Exemplary damages are subject to constitutional limitations if they are excessive, in places where a more strict state law limitation does not apply.

Exemplary damages of at least three times the compensatory damages are presumptively valid as a matter of constitutional law, where it is proper to award them, and a greater multiple of exemplary damages is constitutionally allowed when the amount of damages is very small (a rule that would not apply in this case), although I do not believe that there is a hard and fast rule regarding exactly when exemplary damages become excessive.

One of the leading cases on the subject is the U.S. Supreme Court case of State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003) which is discussed in depth here.

It is not inappropriate in an award of exemplary damages to consider the ability of the defendant to pay and to make an award calculated to be a meaningful punishment given the scale and means of the offender.

At both the trial court and appellate level, in a case where a jury awards damages, the job of the court requested to enter a remittitur motion is to reduce the award to the maximum amount that a reasonable jury could award in light of the evidence presented.

It isn't unlikely that, in a trial court post-trial motion requesting a remittitur, or on appeal, that the jury's award would be reduced by about $153 million, give or take a million (reducing the punitive award from $250 to $99 million and reducing the prejudgment interest that presumably makes up most of the difference between the two subcomponents of damages and the total proportionately) to $136 million. But, this isn't a foregone conclusion either since the constitutional limitation is not quite a bright line rule.

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  • Ability to pay declines to zero before all of the 5000 cases are decided at the (reduced) expected rate of 136M USD per case. – H2ONaCl Aug 14 '18 at 13:06
  • @H2ONaCl Not at all a sure thing that all 5000 cases will be decided or that they will be comparable. The strongest cases get brought first. – ohwilleke Aug 14 '18 at 14:12

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