Litigation
Jun. 20, 2002
Genentech Lawyer Urges Jury to Forgo Punitives
LOS ANGELES - Attorney Susan Harriman is upset about a $300 million verdict a Los Angeles jury made last week against her client, Genentech Inc., in a royalties case brought by City of Hope National Medical Center.
And she wasn't afraid to tell the jurors her feelings during opening statements in the punitive damages phase of the case.
"I'm not happy about the verdict," Harriman said Monday in a Central Civil West courtroom. "Nobody at Genentech is."
Harriman asked the jurors if Genentech deserves more punishment and told them there is nothing in the jury instructions that says they have to award punitive damages.
Lawyers for Genentech returned to court this week to urge jurors to listen to both sides before rendering a decision.
"I ask you to please, please keep an open mind on the issue of punitive damages," Harriman of San Francisco's Keker & Van Nest said.
"Your verdict has already sent a very, very strong message to Genentech," she told the jurors.
On June 10, the panel of 10 men and two women awarded City of Hope $300.2 million in compensatory damages after finding that the South San Francisco-based Genentech had breached a 1976 contract to pay royalties to City of Hope for technology the research center's scientists developed and which sparked the biotech 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. That discovery led to the production of such valuable drugs as human insulin and human growth hormone.
The jury, by a vote of 9-3, decided that Genentech breached its contract and, by a vote of 10-2, that it breached its fiduciary duty with "malice or fraud."
The $300.2 million award is an estimate of what City of Hope lost over the years. Of that amount, Riggs and Itakura will receive 10 percent each.
Now, jurors must decide on an amount that is enough to punish Genentech for its breach of fiduciary duty, City of Hope's lead attorney Morgan Chu said during his opening statement.
"It should be something that hurts, but does not destroy," he said.
Chu asked the jurors to consider three categories of evidence when determining punitive damages:
The first, he said, was the reprehensibility of Genentech's actions and motives and whether there was harm done to City of Hope by these actions.
Secondly, Chu asked the jury to consider what amount would "deter any future wrongdoing" by Genentech.
For this, the jury may look at evidence of Genentech's financial condition and wealth, which he said is $5.8 billion.
Finally, Chu asked the jury to look at the compensatory damages they awarded City of Hope and determine punitive damages that are reasonably related to the $300.2 million.
"We're not asking for an amount in punitive that is 100 times the amount awarded in compensatory damages," Chu said.
He also told jurors that he may only call one witness, an expert who will testify about Genentech's financial condition.
Harriman said Genentech is a financially and scientifically successful company, but it shouldn't be punished for its accomplishments.
"You and only you are the persons who decide whether any amount of money should be awarded in punitive damages," she said. "And you and only you will decide what that amount is."
The jury is expected to begin deliberations by the end of the week.
Leslie Simmons
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