Tuesday, August 6, 2002
High Court Upholds, but Limits, Immunity From Tobacco Suits
From Staff and Wire Service Reports
A statute repealing the immunity that California once gave tobacco manufacturers from products liability claims isn’t retroactive, so smokers with illnesses cannot recover for industry conduct covered by the immunity while it was in effect, the state Supreme Court ruled yesterday.
But the justices limited the immunity to conduct occurring during the 10 years that the repealed law was on the books. And in a companion case, the court limited the types of claims to which the immunity can be applied.
The mixed set of rulings deal with Civil Code Sec. 1714.45. As originally enacted, effective Jan. 1, 1998, the law designated tobacco products as one of several classes of inherently dangerous products whose manufacturers and distributors were immune from actions by those injured as a result of use.
It was a product of the “napkin deal,” a compromise between supporters and opponents of “tort reform” that was brokered by powerful legislators Willie L. Brown Jr.—now mayor of San Francisco—and Bill Lockyer, now the state attorney general.
As political support for the tobacco industry withered, calls for repeal of the immunity grew, and repeal legislation was enacted and took effect on Jan. 1, 1998.
Attorneys for smokers have argued that the repeal precludes the immunity from being raised as a defense, at least as to those whose illnesses were first manifested prior to 1988. The tobacco companies have contended that they cannot be sued for anything they are alleged to have done or failed to do prior to 1998.
The lead case, Myers v. Phillip Morris Companies, Inc.; 02 S.O.S. 4048, came to the high court from the Ninth U.S. Circuit Court of Appeals on a certified question after a former smoker with lung cancer appealed a district judge’s dismissal of her products liability suit.
The judge ruled that Betty Jean Myers, allegedly a 40-year smoker, had no claim because she quit before the immunity statute was repealed. The Ninth Circuit asked the state’s highest court to decide whether the tobacco companies could be held responsible for any of their pre-repeal conduct.
In a 6-1 decision, authored by Justice Joyce L. Kennard, the high court said the Legislature did not intend to retroactively repeal the immunity. Kennard explained that there was no express retroactivity language in the law, no legislative history indicating retroactive intent, and a strong presumption against giving retroactive effect to legislation when doing so would subject a defendant to huge damages that it would otherwise avoid.
On the other hand, the justice said, those considerations do not apply to conduct occurring before the immunity became law.
Repeal, she explained, did not “change the legal consequences” of conduct that occurred before the immunity became law. “Nor could defendants reasonably have relied upon the Immunity Statute before its enactment,” the jurist wrote.
Justice Carlos Moreno, the lone dissenter, argued that the Legislature intended to make the repeal retroactive. The immunity statute, he insisted, did not intend to create a vested right that the Legislature was powerless to take away.
In the second case, the justices held, contrary to the ruling of the First District Court of Appeal, that the immunity statute “does not extend to allegations that tobacco companies, in the manufacture of cigarettes, used additives that exposed smokers to dangers beyond those commonly known to be associated with cigarette smoking.”
But nicotine, the court said, is not such an additive.
That case is Naegele v. R.J. Reynolds Tobacco Company, 02 S.O.S. 4059.
Spokesmen for the industry said three California awards totaling $148.2 million will have to be retried because jurors considered evidence about industry wrongdoing between 1988 and 1998.
Tobacco companies and their investors cheered the rulings.
Shares in two of the tobacco companies involved in the rulings closed higher Monday in trading on the New York Stock Exchange. Shares of R.J. Reynolds Tobacco Co. rose $1.54, or 3 percent, to $56.14. Philip Morris Cos. stock closed up $2.29, or 5 percent, to $47.50.
But smokers’ attorneys and anti-tobacco activists said the rulings clear the way for more lawsuits to be filed. Many lawyers were awaiting the Supreme Court’s rulings before deciding to file suits.
In many cases, lawyers say they have enough evidence of corporate wrongdoing before 1988 and after 1998 to proceed.
“The problem for the companies is that their wrongdoing spans many decades and the ruling applies to only one decade,” said Edward Sweda, a lawyer with the Tobacco Products Liability Project at Northeastern University in Boston. “There is still plenty of evidence available that will be very damning to the companies.”
Copyright 2002, Metropolitan News Company