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The Wages of Sin: Preventing Punitive Damages

By Edward P. Richards, III, 8 IEEE Engineering in Medicine and Biology Magazine #3, pg. 50 (September 1989)

Products liability lawsuits are intended to compensate injured persons for the costs of their injuries. In some cases, however, the court is so shocked by the defendant's behavior that it awards punitive damages: a "fine" to discourage inappropriate conduct in the future. These awards are rare because they are only granted when a manufacturer recklessly disregards the dangers posed by its product. Punitive damage awards can be devastating because they are not covered by insurance. This article first discusses the common themes in several recent cases holding medical device manufacturers liable for punitive damages. I then present the framework for a preventive law plan to minimize the risk of punitive damage awards.

The Cases

Before discussing the individual cases, it is important to note the difficulty of teasing engineering facts out of legal cases. Most cases are tried in state courts. The decisions of state trial courts are not published. The only published materials are the state appellate court opinions. Appellate opinions are limited to legal issues. They only recite the engineering facts as necessary to frame the legal issues. When the engineering facts are stated, they often are garbled by a technologically unsophisticated judge or law clerk.

The courts lack of technological sophistication makes legal opinions a poor basis for engineering standards. Yet these technologically unsophisticated decision makers determine the standards for liability. Technologically sound engineering practices that contradict lay expectations can lead to substantial liability.

The cases to be discussed involve the Dalkon Shield (an intrauterine device),[1] a valve on an anesthesia machine,[2] and a breast prosthesis.[3] In each case the product defect was simple and easily identified: The Dalkon Shield led to intrauterine infections which often rendered the infected woman sterile. The anesthesia machine valve could be hooked-up in such a way as to provide a one-way air path into the patient. The breast prosthesis was inflatable and did not stay inflated. These were easily detected short term effects.

The Common Path to Punitive Damages

In each of these cases the plaintiffs were able to show a pattern of behavior that the jury characterized as reckless: 1) the defect could have been detected before the product was marketed; 2) the manufacturer was put on notice of the defect shortly after the product was marketed; and 3) the manufacturer continued to market the unmodified product after being on notice that it was avoidably dangerous.

The clinical trials of the Dalkon Shield demonstrated a higher incidence of pelvic infections. The field tests of the anesthesia machine valve generated many adverse comments, including the observation that the valve could kill patients. The breast prosthesis was a balloon that tended to leak if creased. In each case the company marketed the device in spite of the potential problems. The courts questioned the wisdom of the original design, but this was not enough to support an award of punitive damages.

When each product was marketed, users began to complain about problems with the device. The manufacturers choose to ignore these complaints. There was evidence that the manufacturers of the IUD and the breast prosthesis concealed complaints that should have been available to the FDA. The anesthesia machine manufacturer took the position that since the value was optional, it was the user's problem if he chose an unsafe design.

In each case the manufacturer did not recall or modify the product. Despite known hazards, the manufacturers continued to sell the products. It was this failure to acknowledge the risks of the product that the courts characterized as reckless.

Shifting Standards

The facts of these cases seem outrageous. Each case arose from decisions made over 10 years ago. Changes in the regulations governing the sale of medical devices (driven, in part, by the Dalkon Shield litigation) make it unlikely that a company would now continue to market a device known to be dangerous. Few, if any, manufacturers knowingly ignore or conceal information about defective products.

Yet manufacturers must not become complacent. Legal expectations have shifted as the regulations on devices have tightened. Manufacturers are increasingly seen as warranting that their devices are risk free. The increased documentation and testing necessary to comply with current medical device regulations generates a new set of legal risks.

The Realities of Design

Few medical devices are without risk. The more complicated a device, the greater the chance of failure. When devices are tested in the laboratory, there will be a certain number of failures. When devices are field tested, a certain number of users will hate them. The engineer in charge will use her best judgment to determine the significance of laboratory failures and adverse user reports. Significant problems will be corrected. Insignificant problems (in both the statistical and the practical sense) will be recorded and monitored.

Legal problems arise when these failures and adverse reports are viewed in retrospect. If a patient is injured by the device, the patient's attorney will present the problem reports as evidence that the company recklessly subjected patients to the risk of injury. Ironically, the more a company tests its products, the more adverse reports it will accumulate and the greater the threat that it will look reckless in hindsight.

If these adverse reports are to be put in perspective, it must be done contemporaneously with their creation. Post hoc justifications, however accurate, will not be credible to a jury. Device manufacturers must adopt a preventive law plan to manage the legal risks of routine product testing.

A Preventive Law Plan for Product Development

A successful preventive law plan requires that the product development and marketing cycle be understandable to lay judges and juries. Each step should be documented. The criteria for proceeding to the next step must be explicit, and include the rationale for managing any residual problems that are carried forward. For example, a prototype ventilator may be prone to incorrect rate settings because of a rudimentary control panel.

While this is a dangerous problem, the designer may intend to correct it by incorporating a proven user interface during production design. The proposed correction must be documented. Once the correction is made, the device must be retested to assure that the problem has been corrected. These retest results should then be linked with the original test results to assure that the adverse findings cannot be separated from the evidence that the problem was corrected.

Once the product is in the field, every user complaint must be investigated and explained. The company must demonstrate that it appreciated the seriousness of the complaints and took appropriate action. Complaints must be analyzed to detect patterns and trends, such as an increasing failure rate as a device ages. The company must extract all possible information from complaints. It is difficult to explain away an adverse trend that is not noticed until trial preparation.

Most device manufacturers now act quickly on complaints directly related to patient safety, such as defective gaskets. Manufacturers must also act on user interface problems. In many circumstances user interface problems threaten patient safety. Witnesses will remember devices that are troublesome to operate as unsafe, even if the user interface problem was unrelated to patient safety. These adverse memories, coupled with a fat complaint file, will allow the plaintiff's attorney to undermine the manufacturer's credibility before the jury.


Current medical device design and manufacturing standards prevent clearly dangerous products from staying in the marketplace. This creates the legal expectation that devices should be risk free. A court that expects devices to be risk free may misunderstand the inevitable adverse product reports that accompany rigorous product testing. Device manufacturers must anticipate and manage these misunderstandings during product development if they are to appear credible before the court.


[1] Tetuan v. A.H. Robbins, 738 P.2d 1210 (1987)

[2] AIRCO, Inc. v. Simmons First National Bank, Guardian, 638 S.W.2d 660 (1982)

[3] Marks v. Minnesota Mining and Manufacturing Co., 187 Cal. App. 1429 (C.A. 1st. Div. 1986)
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