Monday, September 29, 2003
C.A. Cuts Punitive Damage Award in Tobacco Case to $9 Million
By a MetNews Staff Writer
The First District Court of Appeal Friday ordered that a $26.5 million jury verdict in a lifelong smoker’s suit against a tobacco company be reduced to $10.5 million unless the plaintiff agrees to a new trial on damages.
Div. Four, for the third time, upheld a San Francisco Superior Court jury’s award of $1.5 million in compensatory damages to Patricia Henley, and again agreed that Henley presented sufficient evidence of malice, fraud, or oppression to support a punitive damage award.
Henley, who is now 57 and suffers from lung cancer, sued after having smoked Marlboro brand cigarettes for more than three decades.
The jury heard evidence that Philip Morris and other tobacco companies had acted in concert to suppress proof of the link between smoking and cancer. There was also testimony about how Marlboro, the brand favored by plaintiff, was marketed in a way that targeted teenage smokers.
Started at 15
Henley said she started smoking when she was 15, primarily because her friends smoked and she wanted to be “cool” and feel “grown up” at a time when the dangers of tobacco were not publicized, there was no anti-smoking education in schools, and no one said that smoking was addictive. She said that she continued to smoke “Marlboro Red” until 1989, then switched to “Marlboro Light” after she called the company and was assured that it was “low-tar.”
As a result of that phone call, she said, she doubled her consumption, to three-and-a-half packs per day.
Jurors awarded $1.5 million in compensatory damages and $50 million in punitive damages. San Francisco Superior Court Judge John Munter granted remittitur as to the punitive damages, cutting them in half, which Henley accepted.
Friday, however, the same appellate justices who had twice upheld the $25 million award said new standards established by the U.S. Supreme Court require another substantial reduction.
Philip Morris originally contended the suit was barred by former Civil Code Sec. 1714.45. The legislation, which barred products liability suits against makers of tobacco and other “common” products for personal consumption, was enacted in 1987, took effect Jan. 1, 1988, and was repealed as to tobacco products in 1997.
In its first opinion, Henley v. Philip Morris (2001) 93 Cal.App.4th 824, the court said the immunity did not apply to plaintiffs such as Henley, who did not discover their symptoms until after it was repealed. Later, the California Supreme Court held that the immunity may be applied in such cases, but only as to conduct which occurred during the years the statute was in effect, and sent Henley’s case back to the Court of Appeal for reconsideration.
Philip Morris then argued that it was entitled to a new trial because the jury had heard evidence of its conduct over the entire time period in which Henley had been a smoker, including the decade the immunity statute was in effect. But the appellate court again affirmed, holding in an unpublished opinion that the company waived that argument by not specifically objecting in the trial court.
High Court Ruling
Philip Morris again sought review, and the high court again sent the case back, this time with instructions to determine the effect of last term’s ruling on punitive damages in State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 123 S.Ct. 1513.
The appellate panel Friday again said the company had waived its arguments based on the immunity statute.
“[A]t no time prior to the verdict did defendant so much as hint to the trial court that section 1714.45 might operate to restrict the admissibility of such evidence [of conduct occurring during the period the statute was in effect] or the purposes for which it could be considered by the jury,” Justice Patricia Sepulveda wrote.
Nor, she added, was it impossible for the company’s counsel to anticipate the Supreme Court’s ruling. She noted that the defense raised the issue in the memorandum accompanying its new trial motion.
This showed that “five weeks after the jury returned its verdict, defendant was fully cognizant of the possibility of an immunity window,” Sepulveda said, adding that there was no showing that this was a new realization or that the failure to make the argument earlier was excusable.
Turning to punitive damages, Sepulveda said it was appropriate under Campbell to limit the award to six times the compensatory damages.
The high court, she acknowledged, said that an award of more than four times compensatory damages may cross “the line of constitutional impropriety.”
But the 6 to 1 ratio set by the panel, she concluded, “is justified here by the extraordinarily reprehensible conduct of which plaintiff was a direct victim.” She cited in particular the marketing of cigarettes in a manner designed to entice teenagers to smoke and the suppression of evidence, known to the defendant and others in the industry even before Henley started smoking, of scientific studies suggesting that smoking carried health risks.
The case is Henley v. Philip Morris Inc., 03 S.O.S. 5165.
Copyright 2003, Metropolitan News Company