Last week, in Timbs v. Indiana, ___ S. Ct. ___, 2019 WL 691578 (U.S. Feb. 20, 2019), the Court unanimously held that the Excessive Fines Clause of the U.S. Constitution’s Eighth Amendment applies to the states:
Under the Eighth Amendment, “[e]xcessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” Taken together, these Clauses place “parallel limitations” on “the power of those entrusted with the criminal-law function of government.” Directly at issue here is the phrase “nor excessive fines imposed,” which limits the government’s power to extract payments, whether in cash or in kind, as punishment for some offense. The Fourteenth Amendment, we hold, incorporates this protection.
Id. at *3 (citations and quotation marks omitted).
The historical and logical case for concluding that the Fourteenth Amendment incorporates the Excessive Fines Clause is overwhelming. Protection against excessive punitive economic sanctions secured by the Clause is, to repeat, both fundamental to our scheme of ordered liberty” and “deeply rooted in this Nation’s history and tradition.
Id. at *5 (citation and quotation marks omitted).
So why should readers of the DDLaw Blog care? After all prescription medical product liability litigation is a far cry from Timbs, which involved whether a state can, through civil forfeiture, seize property worth four times what the maximum criminal fine could be.
We think, as the Court stated, “it makes sense to scrutinize governmental action more closely when the State stands to benefit.” Id. at *4 (citation and quotation marks omitted). We’ve complained several times before about states farming out claims against our clients to contingent fee lawyers who also “stand to benefit” if they can convince courts and juries to agree to expansive readings of consumer protection and other statutes and impose the same fine 10,000 times over for a single instance of purportedly “illegal” off-label promotion (to take one example). Interpreting such statutes to impose huge multiples of the maximum possible fine for the same conduct by treating every recipient of a message as a separate statutory violation seems to us to be the epitome of an “excessive fine” that bears strict scrutiny because “fines are a source of revenue, while other forms of punishment cost a State money.” Id. at *4 (citation and quotation marks omitted).
Indeed, we specifically mentioned a discussion of the Excessive Fines Clause in In re Zyprexa Products Liability Litigation, 671 F. Supp.2d 397, 462-63 (E.D.N.Y. 2009), as a possible defense to an Attorney General action. Another such case, State v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 777 S.E.2d 176 (S.C. 2015), made our “bottom ten” list in 2015. In that case, the state recovered a verdict of $327 million (later somewhat reduced), representing thousands of letters, sample packs, and detailing visits, counted separately, because the FDA ordered a “correction” of a Dear Healthcare Provider letter. Id. at 203 (“[t]he State argued, and the trial court agreed, that the distribution of each sample box containing the deceptive labeling, each DDL, and each follow-up sales call to the DDL . . . constituted a separate SCUTPA violation”). The South Carolina Supreme Court rejected an excessive fines argument, but the argument at that point was supported only by cases over 50 years old. Id. at 205. Perhaps having a new, unanimous, definitive Supreme Court incorporation of the clause will convince lower courts to treat this part of the constitution with more respect.
After all, if a civil seizure around four times the maximum criminal fine plausible implicates the Excessive Fines Clause, then the kind of artificially inflated, contingent-fee-driven litigation that our clients have had to put up with certainly should.
At minimum, something to watch, and perhaps plead as a defense.