ATLANTA (Legal Newsline) - A federal appeals court last week approved a $20.7 million punitive damages award against cigarette maker Philip Morris, saying even though it was just one of thousands of similar cases over the same corporate behavior, the judgment fell well within constitutional limits set by the U.S. Supreme Court.
Smoker Judith Berger claimed she became addicted to cigarettes at an early age and sued Philip Morris after she developed fatal chronic obstructive pulmonary disease from smoking. Her case was among the so-called Engle progeny run of lawsuits in Florida, in which plaintiffs can use the findings of liability from a single class action to pursue individual damages against tobacco companies.
Philip Morris argued the punitive damages award was unnecessary and excessive, because the company has already been punished repeatedly for decades-old behavior including downplaying the risks of smoking and promoting research that cast doubt upon the cancer-smoking link. The company, a unit of Altria Corp., also took the lead in negotiating a $260 billion global settlement with state attorneys general in the late 1990s that included more than $10 billion in fees for private plaintiff lawyers.
Berger died during her long-running legal fight with Philip Morris, which made two trips up to the 11th Circuit under the name of her representative Bernard Cote. In a 2018 decision, the court rejected Philip Morris’s appeal to overturn the verdict on the grounds it shouldn’t be held to the liability findings of the original Engle court and Berger hadn’t proved she relied upon the company’s marketing when she began smoking.
The company was equally unsuccessful in its second round before the 11th Circuit. The appeals court agreed with Philip Morris that nothing in its 2018 decision addressed whether the punitive damages award was unconstitutionally excessive. But even examining it anew, the 11th Circuit said it fell within constitutional limits.
“It is well-established that punitive damages can be imposed in order to further the government’s legitimate interest in punishing and deterring unlawful conduct,” the court noted, but because it is considered an exercise of government power a punitive damages award must comply with constitutional notions of due process.
The U.S. Supreme Court has weighed in on the subject several times, most notably in the 2003 decision State Farm v. Campbell, which reaffirmed a maximum single-digit ratio of punitive to actual damages.
Berger won $20.7 million in punitives and $6.25 million in compensatory damages, a 3.3:1 ratio. The court accepted that as constitutional, even though other courts have declared similar ratios to be excessive.
The company also argued punitive damages should be examined across all the Engle cases for constitutionality, an approach the 11th Circuit already rejected.
The 11th Circuit decision illustrates how Philip Morris is exposed to a wide range of punishment in state and federal courts as it works through the thousands of Engle progeny cases. Florida courts have rejected punitives in some cases and approved them in others. And even egregious courtroom behavior, such as comparing the company to the Nazi regime, has failed to rescue the company from expensive verdicts.