Biomet Inc. v. Finnegan Henderson LLP
967 A.2d 662, 2009 WL 700612, 2009 D.C. App. LEXIS 49 (2009)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under the doctrine of judgmental immunity, an attorney is not liable for legal malpractice for an informed, good-faith exercise of professional judgment on an unsettled point of law, even if that judgment ultimately proves to be erroneous.
Facts:
- Dr. Raymond Tronzo sued Biomet Inc., a manufacturer of orthopedic devices, for patent infringement and misuse of confidential information.
- Following a jury verdict, a federal district court awarded Dr. Tronzo $7,134,000 in compensatory damages and $20 million in punitive damages against Biomet.
- Biomet hired the law firm Finnegan Henderson LLP to assist with post-trial motions and handle the appeal.
- At the time of the initial appeal, the ratio of punitive to compensatory damages was approximately 3:1.
- Finnegan made a strategic decision not to challenge the constitutionality of the $20 million punitive damage award in the initial appeal.
- Finnegan's strategy was to focus on reversing the more significant patent infringement finding, believing a challenge to the 3:1 punitive damages ratio was weak under existing precedent and would dilute their stronger arguments.
- Finnegan also believed that the constitutional challenge to the punitive damages would only become 'ripe' for adjudication if they succeeded in reducing the compensatory damages, which would create a new, constitutionally excessive ratio.
Procedural Posture:
- Dr. Tronzo sued Biomet in the U.S. District Court for the Southern District of Florida, which is a federal trial court.
- After a jury verdict for Dr. Tronzo, the district court entered a judgment against Biomet for compensatory and punitive damages.
- Biomet, the appellant, represented by Finnegan, appealed the judgment to the U.S. Court of Appeals for the Federal Circuit.
- The Federal Circuit reversed the patent infringement finding and remanded the case to the district court for recalculation of damages.
- On remand, the district court reduced compensatory damages to $520. Upon Finnegan's motion, the court also reduced the punitive damages to $52,000.
- On a second appeal, the Federal Circuit held that Biomet had waived its challenge to the punitive damages by not raising it in the first appeal and reinstated the $20 million award.
- Biomet then sued Finnegan for legal malpractice in the Superior Court of the District of Columbia, a trial court.
- The D.C. trial court granted summary judgment in favor of Finnegan.
- Biomet, as appellant, appealed the grant of summary judgment to the District of Columbia Court of Appeals, the highest court in D.C.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a law firm commit legal malpractice when it makes a reasonable, tactical litigation decision not to raise a particular issue on appeal, where the relevant law on waiver was unsettled at the time of the decision?
Opinions:
Majority - Washington, Chief Judge
No. A law firm does not commit legal malpractice for making a reasonable, tactical litigation decision that involves an unsettled point of law. The court formally adopts the doctrine of 'judgmental immunity,' which protects an attorney from liability for an informed professional judgment made with reasonable care and skill, even if it is later proven to be erroneous. Finnegan's decision not to challenge the punitive damages in the initial appeal was a strategic exercise of professional judgment, not an oversight. The decision was reasonable at the time because the controlling Supreme Court precedent, BMW v. Gore, suggested that a 3:1 ratio of punitive to compensatory damages was not constitutionally excessive, making such a challenge weak. Furthermore, the law was unsettled as to whether Biomet would waive the constitutional challenge by failing to raise it before the compensatory damages were reduced. Finnegan reasonably believed the claim was not yet ripe for appeal. The fact that the Federal Circuit later disagreed and found waiver does not render Finnegan's initial judgment negligent, as attorneys are not required to predict how courts will resolve unsettled legal questions.
Analysis:
This decision formally establishes the 'judgmental immunity' doctrine as a defense to legal malpractice claims in the District of Columbia. It provides significant protection for attorneys by affirming that a strategic decision, especially one concerning an unsettled area of law, cannot be the basis for malpractice simply because it turned out to be wrong in hindsight. The ruling clarifies that the standard is the reasonableness of the attorney's judgment at the time it was made, not the ultimate outcome. This precedent makes it more difficult for clients to sue their attorneys for tactical choices that fail, requiring them to prove the attorney's judgment was uninformed or made without reasonable care, rather than just being an unsuccessful strategy.
