Last month, a Los Angeles jury awarded $13.8 million in punitive damages to the daughter of Betty Bullock, a smoker who had sued Philip Morris USA Inc. before she died of cancer. It was a huge loss — for the plaintiff.
Just seven years before, a different jury in the same case had awarded a record $28 billion in punitives. Philip Morris appealed that blow, and eventually a California appellate court ordered a retrial, leading to the much diminished result of Aug. 24.
What happened between 2002 and last month? Bullock’s lawyer, Los Angeles solo practitioner Michael Piuze, did not return calls seeking comment. But Charles Tauman, president of the plaintiff-friendly Tobacco Trial Lawyers’ Association, said he had spoken to Piuze, who “felt that the jury that he had was of a different character than the one … in the original Bullock case. He felt they were harsher and less willing to be sympathetic.”
Lawyers on both sides of smoker cases say Piuze’s experience is unique only in the magnitude of the lost award. Hard statistics on recent personal injury lawsuits against tobacco companies are difficult to come by, but the anecdotal evidence about punitive damages is growing. Jurors today are less willing to impose severe punishment than jurors just a decade ago.
Lawyers point to changed practices and fading memories, as well as limits on punitives imposed by the U.S. Supreme Court. The major tobacco companies altered their marketing practices following the 1998 master settlement agreement with most states. Younger jurors never knew or retain only dim memories of an era when cigarette packages didn’t feature dire health warnings and tobacco executives played down the dangers of their products.
“They’re not the evil empire anymore,” said Madelyn Chaber, a solo practitioner in Alameda, Calif., who in 1999 obtained the first jury verdict against Philip Morris.
‘AN ENTIRELY DIFFERENT WORLD’
Jurors in the late 1990s and very early 2000s came to court fresh off a decade of harsh headlines against the tobacco industry. Among the sharpest were the revelations of internal corporate documents showing that tobacco companies had known about the addictive nature of nicotine for decades.
In 2001, one year before the $28 billion verdict, Piuze obtained a then-record $3 billion in punitive damages in a different case in Los Angeles. Although that award was later reduced to $50 million, his success caught the attention of other lawyers suing tobacco companies. “He upped the ante,” Chaber said.
In her first case against Philip Morris, Chaber asked for punitive damages of $15 million, but a San Francisco jury awarded $50 million.
“The jury was outraged,” Chaber said. “It had less to do with the plaintiffs than it did with how immoral the companies had acted.”
In her second case the following year, another San Francisco jury awarded $20 million in punitives against Philip Morris and R.J. Reynolds Tobacco Co. A state appeals court reversed the verdict because of state restrictions on smoker lawsuits between 1988 and 1998. By the time Chaber retried that case in 2007, she found herself in what she called “an entirely different world.” Jurors voted for just $250,000 in punitive damages against R.J. Reynolds and rejected punitives against Philip Morris.
“The jury was basically: ‘This is old news — we’ve heard this and everybody knows it’s dangerous,’ ” Chaber said.
Also, Philip Morris (now part of Altria Group Inc.) is a “changed company,” said Murray Garnick, senior vice president for litigation and associate general counsel for Altria Client Services Inc., a division of Altria Group. In particular, it has revised its practices to comply with the master settlement agreement. That agreement, which banned many forms of tobacco marketing, has made it less likely that juries will assess punitive damages, Garnick said.
The record appears to bear that out. On Aug. 19, just days before Piuze’s setback, a jury in Independence, Mo., awarded $1.5 million in punitive damages to the family of the late Barbara Smith. The award came in another retrial. In 2005, a different jury gave Smith $20 million in punitives against Brown & Williamson Tobacco Corp. (now part of Reynolds American Inc.). Lawyers for both sides did not return calls for comment.
SHIFTING BLAME
Jurors these days often blame the smoker for taking up a dangerous habit. “Millions of people have quit smoking, and that’s why personal responsibility plays such a significant role in these cases,” Garnick said.
In Florida, one plaintiffs lawyer addressed that challenge head-on. “We basically from the beginning acknowledged we do share a portion of the blame,” said Steven Hammer of the Law Offices of Sheldon J. Schlesinger in Fort Lauderdale, Fla. Hammer represents the husband of Shirley Barbanell, who died of lung cancer after smoking two packs a day for almost 50 years.
On Aug. 13, a Florida jury awarded more than $5.3 million to Barbanell’s husband but found her 63.5 percent liable, which left Philip Morris on the hook for only $1.9 million, Hammer said. He had asked for $20 million in punitives.
He even brought in a historian to educate the jury about the days when cigarettes lacked warning labels. Jurors today can’t relate to those times, he said. “Especially if you have a younger jury panel. It used to be years ago that it wasn’t so far off that you were allowed to smoke everywhere.”
The Barbanell case is one of more than half a dozen tried since the Florida Supreme Court in 2006 refused to reinstate a $145 billion punitives award in a class action against the tobacco companies. The court ruled that individuals’ claim had to be tried separately.
Of the five Florida cases that have gone to trial this year against R.J. Reynolds (now part of Reynolds American), one was declared a mistrial and three ended without punitive damages, said David Howard, a spokesman for R.J. Reynolds. In the only case that resulted in punitives, he said, the jury awarded $30 million and found the tobacco company 66 percent liable.
ASKING FOR LESS
Although jurors may not realize it, their verdicts are also being shaped by U.S. Supreme Court rulings limiting punitive damages. In State Farm Mutual Auto. Ins. Co. v. Campbell (2003), the Court said that a $145 million punitives award on top of a mere $1 million compensatory verdict violated the due process clause of the 14th Amendment. In Philip Morris USA v. Williams (2007), the Court concluded that a punitives award based on the jury’s desire to punish nonparties also violated due process.
Those decisions have “cast a shadow over punitive damages litigation,” said Robert Rabin, a professor at Stanford Law School who tracks tobacco litigation. Pointing to their effect on trial strategy, he said that the inclination of plaintiffs’ lawyers is “to ask for really large awards and hope to get really large awards. But a plaintiffs’ lawyer doesn’t want to see the award overturned on appeal.”
Tauman, the Tobacco Trial Lawyers’ Association president, agreed and also noted that smaller damages awards give plaintiffs attorneys less incentive to mount a case. A Portland, Ore., solo practitioner, he represented Mayola Williams, a widow of a smoker, in the 2007 case.
Tauman’s group once boasted as many as 70 members bringing smoker cases, he said. Now, some 15 plaintiffs lawyers regularly bring such cases, most of which end in defense verdicts or dismissals. “A lawyer contemplating taking a case like this has to be especially motivated and well-financed,” Tauman said. He observed that Piuze, the plaintiff’s lawyer in Bullock, “had a lot wrapped up financially” in that case.
Garnick, speaking for Philip Morris, said that the company was considering whether to appeal the latest Bullock outcome. “Compared to $28 billion, obviously, the award was a great improvement,” he said. “But we believe the award was still unconstitutionally excessive.”
