A New York judge reduced a $193 million verdict that a jury had ordered a subsidiary of Pentair Inc. to pay to Celebrity Cruises.
The judge overturned $135 million of the original judgment, and agreed with the defendant?s request for a new trial in regard to the remaining $47.6 million.
?We are gratified that our concerns about the jury verdict have been addressed by the court,? said Randall J. Hogan, Pentair CEO/chairman.
The 1994 lawsuit came in the wake of an outbreak of Legionnaires? disease that took place on a cruise ship. Several passengers fell ill from the bacterium, and one died.
The Centers for Disease Control and Prevention said that the Legionnella pneumophila bacteria was bred in a defective spa pump produced by Essef Corp., now owned by Sanford, N.C.-based Pentair Water Pool and Spa. According to the CDC, the filter didn?t backwash correctly, allowing the bacteria to breed and be protected from sanitized water. Celebrity terminated a trip halfway, anchoring in Bermuda and making other arrangements to send the passengers back to New York.
Celebrity Cruises, now owned by Royal Caribbean Cruises Ltd. of Miami, sued Essef Corp. for damages. Celebrity claimed that the extensive press coverage stigmatized the company, hurt profits and even caused the firm to lose value when it was sold in 1997.
Last year, a jury awarded Celebrity $193 million $10.4 million for out-of-pocket expenses; $47.6 million for lost profits; and $135 million in lost enterprise value. The judgment was the seventh largest in the United States last year, according to Bloomberg, a financial news outlet.
Pentair contested all of the awards except the out-of-pocket expenses. The manufacturer?s argument rested largely on the reliability of Celebrity?s expert witness, who predicted how much the cruise line would have made, and sold for, if not for the outbreak. Pentair also said that Celebrity did not sufficiently prove losses after 1995, noting that the original Celebrity stockholders, who would have suffered the loss in profits and enterprise value, weren?t even named on the lawsuit.
Legionnaires? disease primarily affects people over age 50, causing fever, chills, cough, headache, diarrhea and kidney malfunction. The disease can be treated with antibiotics, but the death rate can reach 15 percent among those ill enough to be hospitalized.