January 28, 2015 Practice Points

District Court Denies Takeda's Motion for a New Trial

By Shelby Feuerbach

The United States District Court for the Western District of Louisiana recently denied the Rule 59 Motion for a New Trial filed by Takeda Pharmaceuticals U.S.A. and related entities (Takeda) in a case involving Takeda's anti-diabetes medication Actos and allegations that it causes bladder cancer (Actos Product Liability Litigation). Among other issues, Takeda contended that the jury's $9 billion punitive award resulted from passion and prejudice. While the court remitted the jury's $9 billion punitive award to $37 million, it defended its finding that Takeda acted in bad faith when it spoliated evidence.

The spoliation dispute in the Actos Product Liability Litigation involved alleged destruction of 46 custodial files of former Takeda employees. All of the employees from whom the plaintiffs sought discoverable information left Takeda's employment between February 2001 and April 2011. Upon the employees' departure from the company—but before the issuance of the Actos bladder cancer litigation hold in September 2011—Takeda deleted their files.

However, in July 2002—in connection with litigation involving a number of drugs (including Actos), but having nothing to do with bladder cancer issues—Takeda had implemented a general product liability litigation hold which required, among other things, the preservation of "any and all documents and electronic data which discuss, mention, or relate to Actos." In re Actos (Pioglitazone) Prods. Liab. Litig., No. 6:11-md-2299, 2014 U.S. Dist. LEXIS 13307, at *39 (W.D. La. Jan. 27, 2014). Rather than withdraw the hold when the relevant 2002 litigation concluded, Takeda "refreshed" the general hold in 2003, 2006, 2007, 2008, and February 2011. Id. at *40. The general product liability hold, according to the court, created a duty to maintain the custodial files in question, and the company spoliated evidence when it deleted the files.

According to the court, "the clear, express, and unambiguous language of the 2002 Litigation Hold and its 'refreshed' incarnations all contain broad language without limitation to or distinction between or among specific maladies and, therefore, embrace the bladder cancer claimants who are plaintiffs in the instant MDL . . . ." Id. at *92 (emphasis in original). Accordingly, the court held that Takeda had a "duty to preserve documents relevant to the claims of these bladder cancer plaintiffs . . . in 2002, when Takeda chose to, and in fact, did issue a broad and sweeping litigation hold . . . ." Id. (emphasis in original); see also In re Actos (Pioglitazone) Prods. Liab. Litig., No. 6:11-md-2299, 2014 U.S. Dist. LEXIS 86101, at *117-18 (W.D. La. June 23, 2014) ("[Takeda] chose to institute a general product liability litigation hold, sweeping in its scope and breadth, and containing no such limitation to or identification of a particular malady, in 2002.") (emphasis in original).

The court further held that the plaintiffs met their burden of proving the relevance of the spoliated evidence, prejudice resulting from the presumed deletion of such evidence, and that Takeda acted in bad faith. The court ordered that such "evidence of bad faith" could go to the jury—which, ultimately, resulted in six days of testimony by a Takeda in-house lawyer—and the court read an adverse inference instruction, advising the jury that it was "free to infer those documents and files would have been helpful to the plaintiffs or detrimental to Takeda. . . ." In re Actos, 2014 U.S. Dist. LEXIS 86101, at *225–26 (citing AllenTrial Tr., at 6278:25-6279:5 (Apr. 7, 2014)). The jury ultimately found in favor of the plaintiffs and awarded $9 billion in punitive damages.

Keywords: litigation, products liability, Takeda, Actos, spoliation, duty to preserve, litigation hold

Shelby Feuerbach is with Sidley Austin LLP in Chicago, Illinois.

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