Thursday, October 28, 2004
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U.S. Supreme Court Allows Phillip Morris to Delay Payment of Damage Award Pending Writ Petition
By a MetNews Staff Writer
The U.S. Supreme Court yesterday agreed to allow Philip Morris USA to delay payment of a $10.5 million San Francisco Superior Court judgment in favor of a longtime smoker.
In a brief order, the court stayed the judgment until the company’s petition for writ of certiorari in Philip Morris Inc.v. Henley is ruled on.
The First District Court of Appeal last year upheld findings that lifelong smoker Patricia Henley was entitled to compensatory and punitive damages. But it ruled that Henley must choose between a reduction of the total award from $26.5 million to $10.5 million or a new trial on damages.
The case has been to the Court of Appeal three times. Philip Morris sought relief from the nation’s highest court after the California Supreme Court denied review of the latest ruling.
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.
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.
Last year, 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, 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.
Philip Morris again sought review, and the high court again sent the case back, this time with instructions to determine the effect of the ruling on punitive damages in State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 123 S.Ct. 1513.
In the panel’s most recent opinion, it said it was appropriate under Campbell to limit the award to six times the compensatory damages.
The high court, Justice Patricia Sepulveda 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.”
Copyright 2004, Metropolitan News Company