Universal Health says post-trial motions may reduce Pavilion punitive damages

In a regulatory filing after the close on Friday, Universal Health disclosed a court-ordered remittitur, dated October 10, of Pavilion litigation-related punitive damages from $475M to $120M following post-trial motions. The filing stated: “As previously disclosed on Forms 8-K on April 1, 2024 and September 30, 2024, and Forms 10-Q for the quarterly periods ended March 31, 2024 and June 30, 2024, the Pavilion Behavioral Health System, an indirect subsidiary of Universal Health Services, Inc., is a defendant in a lawsuit filed in Champaign County, Illinois, relating to the sexual assault of one minor patient by another minor patient in 2020. The case went to trial in March of 2024, and on March 28, 2024, a jury returned a verdict for ordinary negligence and awarded compensatory damages of $60 million and punitive damages of $475 million, and a related judgment was entered against the Pavilion. The Pavilion filed post-trial motions, among other items, contesting the excessiveness of the damage awards. In an order dated October 10, 2024, the trial court ordered a remittitur of punitive damages from $475 million to $120 million. The court denied the Pavilion’s request for reduction of compensatory damages. Pursuant to Illinois law and procedure, plaintiff has 21 days from the date of the order to either accept the remittitur of the punitive damages or refuse the remittitur, which would result in further legal proceedings. The Pavilion intends to appeal the remaining judgment after plaintiff makes an election regarding the circuit court’s remittitur. Although we can make no assurances regarding the ultimate outcome of this matter, or what damages will ultimately be awarded, its final resolution could have a material adverse effect on the Company.”