Massachusetts high court sounds sympathetic to massive tobacco verdict

BOSTON (CN) — The Massachusetts Supreme Court sounded likely to uphold a huge punitive damages award against cigarette maker Philip Morris when it heard oral arguments Wednesday.

“I don’t understand how your argument holds together, with all due respect,” Justice Gabrielle Wolohojian told Philip Morris’ lawyer, Scott Chesin of Shook, Hardy & Bacon in New York.

Armand Fontaine’s wife, Barbara, died of lung cancer at age 60 after decades of smoking Marlboros and Parliaments, both made by Philip Morris. A jury awarded $8 million in compensatory damages and a whopping $1 billion in punitive damages, which the trial judge later reduced to $56 million.

Billion-dollar jury verdicts are rare but not unheard of. A study by the U.S. Chamber of Commerce found that there was an average of about one a year in the U.S. between 2011 and 2019.

On appeal, Philip Morris argued the court should wipe out the verdict entirely and give it a new trial because the jury was obviously motivated by passion and prejudice. But Wolohojian countered, “So we should overrule the compensatory damages because the punitive damages were too high?”

Chesin acknowledged a new trial would be a “rare remedy,” but “the jury wrote one check,” and the total amount was grossly disproportionate.

“The compensatory damages weren’t grossly disproportionate,” Wolohojian shot back.

“There’s never been another case where a judge reduced an award by 95% and didn’t say there was passion and prejudice,” Chesin argued.

But Wolohojian replied, “There’s no necessary conflict between finding that a jury wasn’t motivated by passion and yet the verdict is too high.”

Fontaine’s lawyer, Celene Humphries of Spring City, Tennessee, said the amount of the punitives was the only evidence of passion or prejudice, so “it’s really a remittitur argument.”

And Justice Dalila Wendlandt seemed to agree. “The judge here looked at multiple factors and said this was a very attentive jury, very discerning, and I reject Philip Morris’ argument that they were just operating on passion. And I don’t see a response to that.”

Chesin also argued the court should adopt safeguards to prevent runaway jury verdicts, including requiring punitive damages to be supported by clear and convincing evidence and bifurcating trials so the jury doesn’t hear about the defendant’s wealth before deciding on liability.

In this case, the jury was told that Philip Morris had a value of $3 billion and took in $20 million in profits daily.

But the justices seemed unimpressed. Justice Scott Kafker noted that U.S. Supreme Court precedent generally limits punitive awards to a single-digit multiplier of the compensatory damages — which happened here because the $56 remitted award was seven times the compensatory damages.

“Isn’t the single-digit rule the best protection you’ve got, much better than clear and convincing evidence and bifurcated trials?” Kafker asked Chesin.

Justice Elizabeth Dewar did probe Humphries, asking what would happen if the jury had awarded $800 trillion in punitives. “Wouldn’t there be some question of passion and prejudice?” she asked.

“The critical fact is resources,” Humphries said. “Trillions doesn’t match up to their resources. But this was 17 days of revenue for them — that’s shorter than the trial.”

She added, “Sometimes a jury returns $100,000 in punitives, and that’s not even a traffic ticket to Philip Morris.”

If the court does approve the award, it would make history — to date, the largest punitive award ever upheld on appeal in Massachusetts was only $18 million.