A New York judge reduced a $193 million verdict that a
jury had ordered a subsidiary of Pentair Inc. to pay to
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
?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
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
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.