$28 Billion Smoker Award Could Be Cut
A Los Angeles jury's $28 billion award shows that Californians are willing to hit cigarette makers in the pocketbook -- but don't expect the award to stand, attorneys and academics who monitor tobacco litigation say.
"A judge would have no trouble knocking off a zero," said David Levine, who teaches civil procedure and remedies at Hastings College of the Law. "I see no prospect at all that this $28 billion award is going to hold up."
Levine made his assessment Friday after a jury returned the record punitive damages award for Betty Bullock, a Newport Beach, Calif., woman suffering from lung cancer that has spread to her liver. Jurors earlier had awarded her $850,000 in compensatory damages. The case, Bullock v. Philip Morris Inc., 249171, was heard before Los Angeles County Superior Court Judge Warren Ettinger.
Levine cited Henley v. Philip Morris, Inc., 93 Cal.App.4th 824 (2001), which upheld a lower court's reduction of a big punitive damage award as one reason why the amount could be reduced.
San Francisco attorney Madelyn Chaber won a jury award of compensatory and punitive damages of $51.5 million for Patricia Henley in 1999. San Francisco Superior Court Judge John Munter cut it to $26.5 million. The 1st District Court of Appeal upheld that amount, which has been appealed to the California Supreme Court.
Levine said the amount the appellate court upheld in Henley could also be "a bit of stretch" and may be reduced by the high court.
However, justices in August exposed tobacco manufacturers to potentially big liability by giving smokers greater opportunity to sue for illnesses that might have begun decades earlier.
While holding that a statutory immunity granted by the state Legislature protects manufacturers from suits stemming from their conduct between 1988 and 1998, the high court held that suits for conduct before and after those years could proceed. And in a companion ruling, it held that the 10-year immunity period doesn't protect companies from suits alleging that additives, such as ammonia, produced an adulterated form of tobacco that made it unreasonably dangerous.
The statutory issues wouldn't have applied anyway in the Bullock case because she started smoking prior to 1988.
Paul Fogel, an attorney with Crosby, Heafey, Roach & May in San Francisco who handles punitive damages awards on appeal, said the 33,000-to-1 ratio of punitive to compensatory damages in the Los Angeles case would by itself probably bring a reduction.
"Punitive damages are supposed to sting, but not put them out of business," said Fogel. "It's a factor that courts consider."
Attorney Ellis Horvitz of Encino, Calif., a defense attorney in punitive damage cases, said the verdict indicates juror susceptibility to emotional arguments. "I don't know the facts [of this case], but the tobacco industry does appear vulnerable to pleas to juries by able plaintiffs counsel," Horvitz said. "It's just an enormous amount.
"I think there is a vast body of law that can be used to eliminate this punitive damage award," he added.
The verdict Friday was the second win for Los Angeles solo Michael Piuze, who also won a $3 billion tobacco case in 2001. That award was later reduced to $100 million and is on appeal.
Philip Morris said its first act would be to ask the trial judge to set aside the latest verdict and order a new trial. Failing that, the cigarette maker will ask the judge to reduce the award.
"This jury should have focused on what the plaintiff knew about the health risks of smoking and whether anything the company ever said or did improperly influenced her decision to smoke or not to quit," said William Ohlemeyer, Philip Morris' vice president and general counsel, in a statement.
During the trial, Philip Morris did not attempt to defend its marketing, but instead emphasized Bullock's decision to keep smoking even after warnings.
"If she had stopped smoking ... even in the 1980s, she would not have lung cancer today," said Peter Bleakley, Philip Morris' trial attorney, after the verdict.
Chaber, who won the award in the Henley case and also won a $21.7 million award in another case against Philip Morris and R.J. Reynolds Tobacco Co., contends the Los Angeles jury's $28 billion punitive damage award to a dying smoker was warranted.
"I think it's what Philip Morris deserved," said Chaber, who has twice sued the cigarette maker and won big awards. "They put on no defense."
Chaber, who monitored the case, said Philip Morris called only one witness to discuss cigarette design. "I think they'll be rethinking that strategy," she said. Chaber also said the company only conceded that it made some mistakes in the past and those have been remedied.
"They tell this jury, 'We're not saying we did not do bad things in the past, but we'll do good things from now on,'" Chaber said. "I think the jury said, 'Why should we believe you?'"
She also agreed the judge will probably reduce the $28 billion award, yet the size of the award adds to the cigarette maker's reputation.
"Philip Morris has zero credibility and [the award] was within the reach of the evidence that was put on to show how much money they make killing people," Chaber said. "They don't provide a service."