By KEN RITTER, Associated Press
LAS VEGAS (AP) — A Nevada jury has ordered the state's largest health management organization to pay $500 million in punitive damages to three plaintiffs in a civil lawsuit stemming from a Las Vegas hepatitis outbreak.
The decision on Tuesday comes after a jury last week found the companies liable for $24 million in compensatory damages.
Plaintiffs' attorneys had asked Health Plan of Nevada and Sierra Health Services to pay almost $2.5 billion in the negligence lawsuit, saying it would warn health corporations against putting profits ahead of patient safety.
They argued the HMO knew a doctor operating an outpatient endoscopy clinic was dangerous but sent patients there anyway.
Attorneys for the two companies argued that a large punitive award would be unreasonable.
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With billions of dollars on the line, a Nevada jury was deliberating Tuesday whether the state's largest health management organization should pay punitive damages in a negligence lawsuit stemming from a Las Vegas hepatitis outbreak called the largest in U.S. history.
The Clark County District Court jury began deliberating the morning after plaintiffs' lawyer Robert Eglet asked them on Monday to order Health Plan of Nevada and Sierra Health Services to pay almost $2.5 billion in punitive damages in the civil lawsuit.
Eglet said the large amount was needed to send a message that corporations shouldn't put profits ahead of patient safety.
Attorney D. Lee Roberts Jr., representing the two companies, argued that such a large award would be unreasonable, disproportionate and ruinous.
Roberts said the jury of five women and three men already sent a message last week, when it found the companies liable for $24 million in compensatory damages to plaintiffs Helen Meyer and Bonnie and Carl Brunson.
Health Plan of Nevada and parent company Sierra Health Services — subsidiaries of publicly traded UnitedHealth Group Inc. — have already promised to appeal.
Legal experts couldn't predict Tuesday how long the jury would deliberate or whether it would agree to Eglet's stunning request for punitive damages of more than 1,000 times the compensatory amount awarded last week.
But they said any amount greater than $240 million ran the risk of being slashed.
"Even if the jury were to bless this outrageous request, it's likely the trial judge will reduce it significantly," said Darren McKinney, spokesman for the American Tort Reform Association in Washington, D.C. "And if the trial judge fails to do that, surely the state Supreme Court, in light of previous U.S. Supreme Court rulings, will reduce it."
John Kircher, a Marquette University law professor and author of the 2012 book, "Punitive Damages, Law and Practice," said the high court has essentially capped punitive damages at less than 10 percent of a compensatory damage award.
"It's not automatic," Kircher said. "But the U.S. Supreme Court has said it sees due process problems if the punitive award exceeds compensatory damages by more than a double-digit percentage."
Eglet said he calculated 15 percent of company profits to arrive at punitive damage figures of a little more than $1.9 billion from Health Plan of Nevada and about $590 million from Sierra Health Services.
The plaintiffs' lawyer argued that Health Plan of Nevada treated patients with the legal term "bad faith" when it hired outpatient clinic owner Dr. Dipak Desai to a low-bid contract even though company administrators were warned in advance that Desai was speeding through procedures and pinching pennies so much that patients were at risk of contracting blood-borne diseases.
Roberts argued that Desai was responsible for the hepatitis outbreak, not the companies.
Defense attorneys also argued that they were blocked from showing the jury during the six-week trial that company executives didn't know Desai employed unsafe endoscopy practices while boasting that he performed the fastest colonoscopies in the country.
After the hepatitis outbreak became public in early 2008, the Southern Nevada Health District in Las Vegas notified more than 50,000 people that they were at risk for blood-borne diseases including AIDS and should be tested.
Investigators traced hepatitis C infections of nine people to procedures conducted in 2007 at Desai endoscopy clinics. Health officials said that although hepatitis C was found in another 105 Desai patients, the cases weren't conclusively linked to procedures at his clinics.
Desai, once a powerful member of the state Board of Medical Examiners, wasn't named in the civil lawsuit involving Meyer and the Brunsons.
He has denied wrongdoing, declared bankruptcy and surrendered his medical license, but faces trial in state court later this month and federal court next month on separate criminal charges stemming from the outbreak.
Desai's lawyers have fought for years to prove that he is so incapacitated by strokes and other physical ailments that he is unfit for trial.
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