American Lawyer, May 20, 2010 – Novartis and Its Lawyers Just Don’t Get It

As appeared in American Lawyer

Susan Beck

What was Novartis thinking?

On Wednesday a Manhattan federal district court jury came back with a stunning award of $250 million in punitive damages against the U.S. subsidiary of the Swiss pharmaceutical giant for discriminating against women in its sales force–the largest verdict ever in a gender discrimination case. As the Litigation Daily noted on Monday when the jury found Novartis liable for discriminating against a class of 5,600 current and former female sales representatives, Novartis’s decision to throw the dice in a jury trial had a lot of people scratching their heads, particularly because of the ugly accusations Novartis knew the name plaintiffs would make.

But as I’ve come to understand after reading the entire closing argument of Novartis’s lead defense counsel, Richard Schnadig of Vedder Price, this was a company–and a lawyer–that simply didn’t know how to deal with the plaintiffs’ accusations. Their response to the women’s testimony was beyond tone deaf. It was, to put it bluntly, insulting and stupid.

The plaintiffs–led by David Sanford and Katherine Kimpel of Sanford, Wittels & Heisler–accused Novartis of discriminating against women in pay and promotions, of gender hostility, of fostering a hostile work environment, of pregnancy discrimination, of sexual harassment, and of retaliation. The pay and promotions and pregnancy allegations made it to trial. (Here’s the amended complaint. The Litigation Daily’s earlier reports about the month-long trial before federal district court judge Colleen McMahon are here, here, here, and here.) During the trial, women testified about a hostile workplace rife with male workers’ sexual jokes, comments about female employees’ bodies, and inappropriate touching. One named plaintiff claimed that her manager pressured her to have an abortion. Another testified that after she reported she’d been raped by a doctor at a Novartis event, the company responded by attacking her work performance.

And how did Novartis respond to these explosive allegations? In one of the most bizarre, jaw-dropping trial strategies I’ve seen, the company trotted out offensive stereotypes about women to try to discredit the plaintiffs. In Schnadig’s closing argument for the defense, he dismissed the plaintiffs’ sworn testimony as the rantings of a bunch of overly emotional, lying, hysterical women. If the five men and four women on the jury weren’t convinced by this point that Novartis didn’t respect women, Schnadig’s closing would have erased any doubt.

Take, for instance, the Vedder Price lawyer’s characterization of the testimony of plaintiff Lara Blum. Blum told the jury that her manager pressured her not to have children. She also testified that after she reported being groped by a doctor, her manager told her to avoid the doctor. He didn’t report the incident, which upset her. The Vedder lawyer dismissed Blum as hysterical. “I’ve never seen anybody cry so much on the witness stand in my life,” Schnadig said. “She didn’t have very much to cry about….It’s like she had been knifed. Honestly. What was wrong with this woman? She was so fragile.” Schnadig pointed out that Blum’s boss, who took the stand to deny pressuring her not to have children, was much more believable because, in Schnadig’s words, he was a “nice Southern guy.”

Schnadig labeled Blum “a troubled person” frustrated by a bad marriage. She was unhappy, he claimed, because “she was really unwilling to have children with a husband who evidently didn’t pay her much attention for one reason or another.”

And Blum was just one of several “troubled, troubled” plaintiffs, the Vedder partner asserted. Plaintiff Kelly Corbett, who claimed unfair treatment in her performance reviews, was also a “troubled” liar, whose testimony was “highly emotional” and “ridiculous.” And even when Schnadig wasn’t accusing women of being deceitful, he managed to belittle them. He called one female witness “that little blond that came up here from Texas.”

Some of the most disturbing testimony in the case came from Marjorie Salame, who reported being raped by a doctor at an event intended to encourage physicians to prescribe Novartis drugs. Even though Salame filed a criminal complaint, Schnadig refused to accept her account, instead labeling it a simple assault. He then tried to impugn Salame’s judgment by questioning why, after she was raped, she went to the doctor’s office and confronted his wife. “That’s the last thing I would do if I were a woman,” he said.

Jurors didn’t buy the argument that the women were a bunch of crazy hysterics. As their jury form shows, they awarded each of the 12 name plaintiffs compensatory damages for pain and suffering, with awards ranging from $80,000 to $598,5000. (Jurors declined to comment to reporters after the trial, according to The Wall Street Journal.) And that doesn’t even include lost wages, which will be determined for the entire class by Judge McMahon. The pain and suffering claims of other class members will eventually be heard by a magistrate.

Novartis Pharmaceuticals Corporation said in a press release that the company is disappointed in the verdict, believes the plaintiffs’ claims are unfounded, and plans to appeal. It noted that that company has been recognized for ten years in a row by Working Mother magazine as one of the top 100 companies for working mothers.

I suggest the editors of Working Mother read Schnadig’s closing argument before compiling their next list. Trying to discredit an opponent’s witnesses is a common and acceptable strategy–within bounds. In this case, not only was Novartis’s approach offensive, it was a tactical disaster. Could there be a worse defense to accusations of insensitivity to women than firing back with the most demeaning and insulting stereotypes in the book? One Manhattan jury sure didn’t think so.

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