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The Bloom Is Off
the Rose for Tobacco Claims
Law.com
By Amanda Bronstad
9-21-09
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."
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