In a little over a month, Philip Morris has been handed two stunning losses on appeals involving punitive damage awards in California totaling $78 million.
Only last month, the U.S. Supreme Court has denied the Petition forÃ‚Â a Writ of Certiorari on behalf of tobacco giant Philip Morris USA Inc. from a final disposition of the Court of Appeal of California, Second Appellate District.
In that case, brought by a man (Richard Boeken) who died of cancer in 2002, there had originally been a $3 billion punitive damage award in 2001 that was based on a jury finding that Philip Morris was liable for negligence, misrepresentation, fraud, and the sale of a defective product.
Boeken, who was 57 when he died, had been a two-pack-a-day smoker. The state court action had resulted in two post-trial reductions in the damage award. The first was to $100 million and the second to $50 million where it remained pending the Petition for Certiorari.
Philip Morris had based its argument to the Supreme Court on the Ã¢â‚¬Å“excessivenessÃ¢â‚¬Â of the award and a claim that some of the plaintiffÃ¢â‚¬â„¢s claims should have been dismissed.
Court records indicate that the Petition was filed on November 8, 2005. Before the response to the Petition was filed on February 13, 2006 ( after two extensions of time were granted), the Court permitted amicus curiae briefs to be filed by the Chamber of Commerce of the United States of America and the Washington Legal Foundation.
Boeken had been a smoker since the age of 13, who had tried numerous ways to quit his addiction to smoking including hypnosis, stop-smoking classes, and nicotine gum.
Unable to quit, he switched to Marlboro Lights in the belief they were safer. Philip Morris claimed that it had never concealed information about so-called low-tar cigarettes. The jury did not agree.
While the refusal by the Supreme Court to hear the case was neither the equivalent of an affirmance of the determination of the California Court of Appeal nor an endorsement of the reasoning behind the punitive damage award that was permitted to remain, the denial of the Petition has the effect of allowing the California decision to stand.
Philip Morris and the rest of the tobacco industry had hoped the Supreme Court would accept the case in order to clarify the standard for calculating punitive damages and thereby greatly reduce that particular award and any others that may follow.
Now, another huge punitive damage award against Philip Morris has been permitted to stand after an appeal to the California Court of Appeal.
This time, the case involved a woman (Betty Bullock), who had smoked various Philip Morris cigarette brands between 1956 and 2001. Bullock, who was 17 when she began smoking, died of lung cancer in 2003 at the age of 64.
The original jury award was for $850,000 in compensatory damages and $28 billion in punitive damages. The trial judge reduced the punitive damage portion of the award to $28 million.
On Friday, the Court of Appeal affirmed the punitive damage award as reduced rejecting the tobacco giantÃ¢â‚¬â„¢s argument that the $28 million exceeded permissible limits on such awards set by the U.S. Supreme Court.
Although it remains to be seen whether Philip Morris intends to seek Certiorari from the Supreme Court, last monthÃ¢â‚¬â„¢s denial of the petition in the Boeken case, where the punitive damage award was almost twice as large, would seem to indicate that such a move would be little more than a delaying tactic with no likelihood of success.