Jury awards Henderson couple a record $500 million award

Henry Chanin and his wife didn't go to court to get rich off his hepatitis C infection.

They just wanted to prevent another outbreak like the one that struck Southern Nevada, he said Friday.

"It was never about the money," said Chanin's lawyer, Robert Eglet. "It ended up that way because they forced us to go to trial,"

The Chanins' lawyers tried to avoid trial in February by pitching a $1.7 million settlement offer, but they got no response from the two drug companies that made and sold the sedative at the heart of the outbreak, he said.

Three months later, the Chanins walked out of court with what is thought to be the largest punitive damages award in Nevada history -- $500 million.

"It wasn't going to be pocket change to make right what happened here in Las Vegas," Chanin said during a news conference at his lawyers' office. "This was exactly what was needed."

Chanin, 62, and his wife, Lorraine, had sued the Teva Parenteral Medicine and Baxter Healthcare Services on several product liability claims related to propofol, a popular anesthetic that was used at the Desert Shadow Endoscopy Center when he was infected with hepatitis C in 2006. His case was one of nine linked to the two Las Vegas endoscopy clinics by health officials who in 2008 notified 50,000 patients about possible exposure to hepatitis, HIV and other blood-borne diseases because of unsafe injection practices at the clinics run by Dr. Dipak Desai.

Their lawyers argued that the drug packaging did not include appropriate warnings against reusing vials between patients and that the 50-milliliter vials of propofol should not have been sold to endoscopy centers because they tempted nurses to reuse the vials instead of throwing away leftover sedative.

Local health officials blamed the outbreak on nurse anesthetists reusing propofol vials between patients after they had become contaminated by syringes that were reused on patients with hepatitis C.

Despite previous outbreaks and knowledge that 50-milliliter vials were being misused, the companies continued to make and sell them to the endoscopy centers because they were more profitable than safer 10-milliliter vials, the Chanins' lawyers argued during the three-week trial.

The jury agreed.

"They valued profit over patient safety," juror Al Folak said Friday. "They knew going in the 50-milliliter (vials) shouldn't be at clinics."

The jurors reached the $500 million figure based on the companies' profits from propofol sales, with Teva paying $356 million and Baxter paying $144 million. Two jurors felt the amount was too high.

The jury had awarded the Chanins $5.1 million in compensatory damages earlier in the week.

The doctor and nurses who performed Henry Chanin's colonoscopy were originally named in the lawsuit, but they settled their medical malpractice claims a few weeks before the trial.

William Dressel, president of the National Judicial College in Reno, called the verdict "very significant."

"Obviously, it's a reflection of the jury's response to the facts of the case," he said. "It shows that the evidence really upset the jury and that they felt there was some bad conduct."

During the trial, the Chanins' lawyers showed that 148 previous hepatitis cases around the world in the past 15 years were linked to reusing propofol vials between patients .

They also pointed to a report Teva wrote to the U.S. Food and Drug Administration in 2000 seeking approval to make 10-milliliter vials of propofol. The report acknowledged that medical workers were reusing the larger vials among patients to avoid throwing away unused anesthetic.

Teva and Baxter lawyers argued that the drug warning label said "single-patient only," and they said selling the differently sized vials gave medical professionals the choice of deciding which were appropriate for their patients and procedures.

In jurors' minds, evidence that Teva did nothing despite being aware of the vial reuse problem for years played a key role in deciding the company's fate.

"They just pushed it under the rug," juror Britney Burnett said.

Jurors noted that the 50-milliliter vials had an upside down label and small plastic hooks used to hang the medicine from an IV in a hospital setting, indicating they weren't meant for single-dose injections.

Juror Lisa Barrett said the expert witnesses called by the plaintiffs and the defense were equally professional, and they even agreed on a key point.

"They both convinced me the 50 milliliter has no business in an endoscopy clinic," she said. "In this age of HIV, to still have people doing this is unbelievable."

Jurors were also miffed nobody from the Israel-based Teva attended the trial, and they universally ridiculed Craig Lea, a U.S.-based Teva executive who testified about propofol and its uses.

"Mr. Lea did not impress us," jury forewoman Celeste Williams said. "What he said, what he didn't say, all that stammering. … The defendants need to get more aggressive if they want to win some of these cases."

Teva and Baxter attorneys did not comment Friday, though the companies planned to appeal.

The $500 million punitive award might be the highest in state history.

Will Kemp, who represents Lorraine Chanin and has been a trial lawyer in Nevada for three decades, said he could not remember a larger one.

In 2007 a Reno jury awarded $99 million in punitive damages for three Nevada women who alleged hormone replacement therapy distributed by drug maker Wyeth gave them breast cancer. The judge ruled that amount was excessive, and the jury reduced the number to about $22 million.

In 1998 a federal jury in Nevada awarded $151 million in punitive damages to an Elko couple whose son was killed when their Ford truck rolled over him because of a defective parking brake. The trial judge reduced that figure to $69 million, and a federal appeals court later cut it to $52 million.

Darren McKinney, a spokesman for the American Tort Reform Association, called Friday's $500 million award "insane."

"To suggest that drugmakers can be held liable for the unhygienic use of a drug is obscene," he said. "They went after drug companies because they knew they had the deep pockets."

According to a 2009 research paper by professors Alison F. Del Rossi of St. Lawrence University and W. Kip Viscusi of Vanderbilt University, American juries between 1985 and 2008 handed out 99 "blockbuster" punitive damage awards of $100 million or more.

Together they averaged $1.2 billion when adjusted to 2008 dollars, with punitive damages against the pharmaceutical and health care industry averaging $504 million.

Lawyer Billie-Marie Morrison, who represents infected patients suing Teva and Baxter, hailed the $500 million award. "The only way to punish a corporation is to hit them where it hurts, in their pocketbook," she said.

That was the point the Chanins' lawyers made to the jury when they explained that the companies together made more than $13 billion in gross sales last year.

Without a significant punitive damage award, the drug companies wouldn't notice, they said. "We sincerely hope that this verdict sends a message to Teva," Kemp said, adding that he doubted it would lead to a settlement for the dozens of pending outbreak-related cases.

While their lawyers prepare for post-trial motions and a likely appeal, Chanin and his wife of 33 years plan to retreat from the spotlight for a time.

He said he felt fairly compensated for his suffering, but he won't say justice has been done until every infected patient has been compensated and the drug companies stop selling 50-milliliter vials to endoscopy centers.

This jury's verdict was a step in the right direction, he said.

"I am very proud of the citizens who sat on the jury to have the courage to come up with $500 million in punitive damages," Chanin said. "They got it."

Review-Journal reporters Jeff German, Paul Harasim and Doug McMurdo contributed to this report. Contact reporter Brian Haynes at bhaynes@reviewjournal.com or 702-383-0281.