Technology & Science
Jun. 21, 2002
City of Hope Lawyer Suggests Punitives Range
LOS ANGELES - Jurors don't have to go for the jugular in calculating punitive damages against Genentech Inc., the lead attorney for City of Hope National Medical Center said Wednesday.
Rather, the Superior Court jury should award something that will sting the biotechnology giant for breaching its contract with the Duarte-based medical center, attorney Morgan Chu said during closing arguments in the punitive damages phase of the civil trial.
Chu of Irell & Manella suggested a range in which the panel of 10 men and two women might consider punitive damages: from $300 million to $580 million. That range, he said, would affect the company's operating results but not its financial position and cash flow.
A few hours later, the jury began deliberations in the Central Civil West courthouse in downtown Los Angeles.
Last week, the jury awarded City of Hope $300.2 million in compensatory damages in the first phase of the trial, which began in March.
Jurors found that Genentech failed to pay royalties on patents developed by the hospital's scientists that sparked the biotechnology revolution. City of Hope National Medical Center v. Genentech Inc., BC215152 (L.A. Super. Ct., filed Aug. 13, 1999).
The scientists, Arthur Riggs and Keiichi Itakura, found a way to trick bacteria into producing proteins. The discovery led to the development of life-saving drugs, including the human growth hormone and human insulin.
To demonstrate what Chu considers to be an excessive amount of punitive damages, he projected on-screen pictures of 7-foot-1 Lakers superstar Shaquille O'Neal and the 400-foot movie monster Godzilla.
"If Shaquille O'Neal is compensatory damages, we don't want Godzillalike [punitive] damages," he said Wednesday.
Chu also told the jury not to be swayed by Genentech's contentions that it has suffered enough from the compensatory damages awarded to City of Hope. That amount, he said, was what Genentech already owed the research facility.
The jury must award punitive damages because "the conduct that took place here over many years of fraud and malice is not acceptable," he said.
But Genentech attorney Susan Harriman argued that the $300.2 million award and the fact that the jury found the corporation acted with malice or fraud was enough punishment.
"It's painful," Harriman of San Francisco's Keker & Van Nest said of the compensatory damages. "It's not going away if you don't award punitive damages."
She asked jurors to focus not just on what Genentech did wrong but on what it did right, including the $305 million the San Francisco-based biotech company paid to City of Hope for research that led to the patents. Genentech also offered stock options to Riggs and Itakura and invented and developed medicines, Harriman said.
"I hope you will agree with me that Genentech's conduct was not reprehensible," Harriman said.
Leslie Simmons
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