Biomet Inc. v. Finnegan Henderson Llp

967 A.2d 662 (2009)

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Nature of the Case

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Facts

Tronzo brought a suit against P alleging that P infringed and misused his patent and other confidential information. Following a jury verdict, the district court awarded $7,134,000 in compensatory damages and $20 million in punitive damages against P for patent infringement, fraud, and violation of a confidential relationship. The district court also enjoined P from manufacturing the device that used the infringed patent. D was hired by P to assist with the post-trial motions in the district court and to handle P's appeal to the Federal Circuit, if necessary. The court rejected P's post-trial motions for relief. D handled P's appeal. D did not appeal the punitive damage award as unconstitutional at that time because the ratio of punitive to compensatory damages after the initial trial was only 3:1, and the jury had found P's conduct to be particularly reprehensible making such an argument extremely difficult. D successfully obtained reversal of the patent infringement finding and the injunction. The Federal Circuit then remanded the case for recalculation of damages in light of its ruling. The district court determined that P was liable for only $520 in compensatory damages. D moved for a reduction of the $20 million punitive damage award in light of the Supreme Court's ruling in BMW of North America, Inc. v. Gore, which held that excessive punitive damages can violate constitutional due process. The district court agreed that the new 38,000:1 ratio of punitive to compensatory damages was unconstitutionally excessive and reduced the punitive damages to $ 52,000. On appeal, the Federal Circuit held that punitive damage relief was precluded because punitive damages were not challenged in the initial appeal. P had waived its right to seek relief from the punitive damage award while the case was on remand. The Federal Circuit reinstated the $20 million punitive damage award. P sued D for malpractice. The trial court found D’s decision protected as a valid exercise of legal judgment. P appealed.