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Three pending cases involving application of Philip Morris v. Williams 

In Bullock, the court of appeal took the unusual step of inviting the parties to submit names of amici who might be interested in submitting briefs. After receiving lists from both parties, the court invited and received a wide range of amicus briefs on the effect of Williams. Copies of the briefing can be found at this link.

In the interests of full disclosure, we should mention that the authors of this blog are counsel of record for Unocal in the Holdgrafer appeal and we have an attorney-client relationship with Philip Morris.

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Docket (Register of Actions): Bullock et al. v. Philip Morris USA Inc.  

12/27/2007 Filed letter from: Letter response (dtd 12/20/07) of Philip Morris USA Inc. in response to plaintiff's letter of 12/14/07. (Filed with permission of the Court.) PK

01/30/2008 Opinion filed. (Signed Published)

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• BULLOCK v. PHILIP MORRIS (PDF) 

We conclude that Philip Morris has shown no error with respect to its liability for fraud and products liability, but that the refusal of Philip Morris’s proposed instruction not to impose punishment for harm caused to nonparties to the litigation was error. We therefore affirm the judgment as to the finding of liability, the award of compensatory damages, and the finding that Philip Morris was guilty of oppression, fraud, or malice, and reverse the judgment as to the amount of punitive damages, with directions to conduct a new trial limited to determining that issue. We also hold that the court had no authority to award attorney fees as a sanction against Piuze and reverse the sanctions order.

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Rationale of Oregon Supreme Court decision in Williams should not apply in California 

The Oregon Supreme Court concluded that the trial court had an adequate basis under state law for refusing to instruct the jury that "you are not to punish the defendant for the impact of its alleged misconduct on other persons." The U.S. Supreme Court had held that a defendant is entitled to due process protections such as are reflected in this sort of instruction upon request, but the Oregon Supreme Court said the trial court properly refused the proposed instruction in this case because it included other language, some of which was erroneous under Oregon state law. Apparently, under Oregon law, a trial court can refuse a party's request for an instruction that correctly sets forth relevant principles of law - even principles essential to ensuring constitutional rights - if the proposed instruction is bundled with other language that is incorrect. The same reasoning would not apply in California. California courts have held that, even when a proposed jury instruction is flawed, if the subject matter of the instruction is "vital" or "material" to the case and not covered by other instructions, the trial court is required to give a proper instruction that captures the substance of the law.

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• Case Information: Bullock v. PM USA, Inc. 

After the Williams case was decided, the California Supreme Court remanded the case for further proceedings in light of Williams. (Click here to read briefing and articles related to the : Philip Morris USA v. Mayola Williams case decided by the United States Supreme Court on February 20, 2007.) The Court of Appeal then ordered supplemental briefing, which was followed by an order inviting answers from the parties and assorted amici curiae to three questions regarding implementation of the Williams decision. All briefing is completed, and oral argument took place on December 12, 2007. The Court of Appeal issued its opinion on January 30, 2008. (Click here to read the opinion.)

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• Bullock v. Philip Morris - - California Court of Appeal reverses $28 million punitive damages award 

We blogged here about this pending appeal involving the intersection of California law and the U.S. Supreme Court's decision in Philip Morris v. Williams. This afternoon, the Court of Appeal (the Second Appellate District, Division Three) issued a published opinion reversing the $28 million punitive damages award and remanding the case for a new trial on the amount of punitive damages. The same court had previously approved the $28 million award, but the U.S. Supreme Court vacated that decision and remanded for reconsideration in light of Williams. . . .

here's the Court of Appeal's summary of its disposition:

"We conclude that Philip Morris has shown no error with respect to its liability for fraud and products liability, but that the refusal of Philip Morris's proposed instruction not to impose punishment for harm caused to nonparties to the litigation was error. We therefore affirm the judgment as to the finding of liability, the award of compensatory damages, and the finding that Philip Morris was guilty of oppression, fraud, or malice, and reverse the judgment as to the amount of punitive damages, with directions to conduct a new trial limited to determining that issue."

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• Calif. Supremes Wait for Smoke to Clear Over Punitive Damages ($$) 

If the U.S. Supreme Court can provide guidance, why not let it?

On Wednesday, at the urging of tobacco giant Philip Morris USA Inc., the California Supreme Court put on hold a major punitive damages case to await a ruling by the nation's highest court on identical issues.

The state court's 6-0 vote freezes for now an April 21 appellate court ruling that OK'd a $28 million punitive damages award against Virginia-based Philip Morris -- an amount 33 times greater than the compensatory damages in the case. . . .

Philip Morris' attorneys at Arnold & Porter want the punitive damages reduced or dismissed, but asked the California Supreme Court to await the findings of the federal court in Philip Morris USA Inc. v. Williams, 05-1256.

The higher court granted certiorari on May 30 to decide whether the Oregon Supreme Court was justified in affirming an award of $79.5 million in punitive damages to a longtime smoker, which was about 100 times the compensatory damages. . . .

Both the Oregon court and Los Angeles' 2nd District Court of Appeal in the California case had found the tobacco manufacturer's conduct so reprehensible that it justified punitive damages in excess of a single-digit ratio.

In both cases, 45-year smokers Jesse Williams of Oregon and Betty Bullock of California died of lung cancer.

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Appellate Court Case Information - Trial Court Detail: Bullock et al. v. Philip Morris USA Inc.  

Trial Court Name: Los Angeles County Superior Court

County: Los Angeles

Trial Court Case Number: BC249171

Trial Court Judge: Ettinger, Joan

Trial Court Judgment Date: 01/06/2003

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Appellate Court Case Information - Party and Attorney Detail: Bullock et al. v. Philip Morris USA Inc.  

Bullock, Betty : Plaintiff-respondent-x/appellant

Michael J. Piuze . . .

Philip Morris USA Inc. : Defendant-appellant-x/respondent

Maurice A. Leiter

Arnold & Porter

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Appellate Court Case Information - Disposition Details: Bullock et al. v. Philip Morris USA Inc. 

Description: Affirmed in part and reversed in part

Date: 04/21/2006

Status: Final

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Appellate Court Case Information - Briefing Summary: Bullock et al. v. Philip Morris USA Inc. 

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Appellate Court Case Information - Docket Entries 

02/10/2006 Filed letter from: atty. Garnick dtd. 2-10-06 in response to ltr of plaintiff Bullock (by permission of the court) (C)

04/21/2006 Opinion filed. The judgment is affirmed, and the sanctions order is reversed. Bullock and Piuze are entitled t recover their costs on appeal. C,K PK-Dissent 68pgs. Dissent-10pgs. cfp

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Case Summary: Bullock et al. v. Philip Morris USA Inc.  

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• BULLOCK v. PHILIP MORRIS Appeal (PDF) 

We conclude that the refusal of Philip Morris’s proposed jury instructions on punitive damages was proper and hold that the extreme reprehensibility of Philip Morris’s conduct justifies a ratio of punitive damages to compensatory damages significantly greater than a single-digit. . . .

There was more than sufficient evidence to demonstrate that Philip Morris knew that the consensus among scientific and medical professionals was that cigarette smoking caused lung cancer and other serious diseases and that smokers suffered lung cancer and other diseases at rates far greater than nonsmokers. Philip Morris knew that cigarettes contained many carcinogens. Despite that knowledge, Philip Morris and other cigarette manufacturers for many years conducted a public campaign designed to obscure and deny the truth. Philip Morris falsely asserted that there was no consensus in the scientific and medical community concerning the adverse health effects of smoking and that the relationship between smoking and health was unknown. Philip Morris assured its customers that if it learned that any cigarette ingredient caused cancer it would remove that ingredient, and falsely stated that it did not believe that smoking was hazardous. Philip Morris repeatedly asserted that more research was needed and that it was diligently pursuing that research, but avoided sponsoring any research that would reveal the hazards of smoking and went to great lengths to avoid disclosing its own toxicological data. Rather than remove nicotine from its cigarettes as it had the ability to do, Philip Morris added urea to its cigarettes to enhance the effect of nicotine so as to further exploit its customers’ addiction and gain new customers. Its customers included individuals such as Bullock who first began to smoke as youths before July 1, 1969, attracted in part by an aggressive advertising campaign in television and in print and other media that was particularly appealing to youths.

The harm caused by Philip Morris’s misconduct was physical rather than economic because the evidence tends to show that Bullock suffered a debilitating and terminal illness, lung cancer, as a result of Philip Morris’s fraudulent scheme. The first reprehensibility factor listed by the court in State Farm, supra, 538 U.S. at page 419, “whether: the harm caused was physical as opposed to economic,” therefore weighs in favor of high reprehensibility. The second factor, “whether . . . the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others” (ibid.), also weighs in favor of high reprehensibility because the evidence tends to show that Philip Morris knew that many smokers would suffer death or serious injury as a result of smoking but, for pecuniary gain, sought to convince its customers and the public in general that the health concerns were unfounded. . . .

Finally, Bullock was only one of many smokers affected by Philip Morris’s nationwide efforts to disseminate misleading information and create a false controversy concerning the adverse health effects of smoking. The evidence shows that Philip Morris earned over $5.2 billion in operating income from domestic sales of tobacco products in 2001 alone, and earned approximately $100 billion cumulatively, in 2001 dollars, in operating income from 1967 to 2001. Philip Morris acknowledged that it earned “billions of dollars in profits.” Those large figures presumably resulted in no small part from Philip Morris’s misconduct. We therefore conclude that the vast “scale and profitability” of the course of misconduct (Johnson, supra, 35 Cal.4th at p. 1206) weighs in favor of high reprehensibility. . . .

Because each of the four factors weighs in favor of high reprehensibility and in light of the vast “scale and profitability” of its actions, we conclude that Philip Morris’s misconduct was extremely reprehensible. . . .

California’s interests in punishment and deterrence are very strong in light of the extreme reprehensibility of Philip Morris’s misconduct. Moreover, Philip Morris’s persistent efforts to mislead the public about the health hazards of smoking despite its understanding that smoking was hazardous show that “strong medicine is required to cure the defendant’s disrespect for the law.” . . .

Philip Morris contends its obligations under the MSA reduce the need for punishment and deterrence. Philip Morris contends its substantial and continuing payment obligations under the agreement and the MSA’s prohibition of some of the same types of conduct on which its liability in this case is based are deterrent measures, and argues that “there is little, if anything, left to deter.” We disagree. . . .

With respect to the MSA, we conclude that Philip Morris’s agreement not to engage in certain conduct is neither punishment nor an effective deterrent and does not reduce the need for punishment and deterrence, as we have stated. . . .

In summary, we conclude that Philip Morris’s conduct was extremely reprehensible, that the approximately 33-to-1 ratio of punitive damages to compensatory damages is not constitutionally excessive in light of the extreme reprehensibility of the misconduct, including the vast “scale and profitability” of the course of misconduct, and that those considerations together with Philip Morris’s financial condition justify the $28 million punitive damages award for purposes of the due process clause. We therefore reject Philip Morris’s contention that the award is constitutionally excessive.

Appeals court upholds damages against Philip Morris 

A state appeals court today upheld $28 million in punitive damages against Philip Morris in a suit by a woman who smoked the company's cigarettes for 45 years and died of lung cancer in 2003.

A Los Angeles jury initially awarded a record $28 billion in punitive damages to Betty Bullock of Newport Beach, in addition to $850,000 in compensation for her economic losses and pain and suffering. The trial judge cut the punitive award to $28 million, but Philip Morris said the amount still exceeded limits on punitive damages established by the U.S. Supreme Court.

The high court, in a 2003 ruling, set out a 9-1 ceiling for punitive damages -- that is, nine times the amount of compensation that was awarded for the plaintiff's actual losses -- and said punitive awards significantly above that ratio would violate a defendant's property rights in most cases. But in today's 2-1 ruling, the Court of Appeal panel in Los Angeles said the punitive damages awarded to Bullock's family, 33 times the amount of compensation, were justified by Philip Morris' "extremely reprehensible" conduct.

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