$3b

How liability can snowball

defect cases against big companies have been resolved in this way. “You see it a lot with drug cases,” says attorney Bob Langdon, who represents dozens of plaintiffs in ignition-switch lawsuits against GM but isn’t involved in the Spain-barthelemy case. “You get a $100 million verdict, and you don’t see another trial,” he says.

Japan’s Takeda Pharmaceutical faced more than 3,000 lawsuits over its Actos diabetes drug. The company lost three of the first four test cases that went to trial claiming the drug increased users’ risk of bladder cancer. Takeda suffered a blow in 2014 when a federal jury in Lafayette, La., delivered a $9 billion damages verdict. A judge later ruled the award was excessive and cut it to $36.8 million. Takeda lost a few more cases before reaching a $2.4 billion settlement in 2015 to resolve all litigation.

Plaintiffs’ lawyers say there’s a disincentive in auto-product-defect suits. Each case costs $300,000 to $500,000 to try, according to Langdon. Pursuing small or risky claims can be unprofitable for lawyers, who don’t get paid unless their clients win. They won’t take on a case with limited prospects for damages or a big settlement.

State court cases can also encourage parties to settle. In the Toyota sudden-acceleration litigation, in which plaintiffs claimed flaws caused vehicles to speed out of control, hundreds of suits were combined before a federal judge in California. They never went to trial because the company lost a jury trial in state court in Oklahoma in 2013, spurring Toyota to settle everywhere.

GM is keeping up its fight, especially on the early cases. “Just because a claim is filed, it doesn’t mean it’s valid,” GM’S Cain says. “At least 37 other drivers were involved in accidents that night on the same bridge due to unexpectedly icy conditions and inclement weather,” Cain says of Spain and Barthelemy’s

Johnson & Johnson ASR artificial hip Plaintiffs alleged the implants were defective. In 2013 jurors ordered J&J to pay $8.3 million in the first case to go to trial. Later the company settled other cases for $2.5 billion; it raised the total to about $3 billion in 2015. The bottom line GM is relying on test cases in state and federal court to set settlement values for hundreds of faulty-ignition-switch claims.