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September 22, 2004

Boeken: Campbell equals win for MO

Yesterday, Philip Morris won its appeal before the Los Angeles 2nd District Court of Appeal, Division 4, which held that the company's punitive damages in the case of Richard Boeken could not exceed $50 million. The court based its ruling on the Supreme Court's decision in State Farm v. Campbell, 538 U.S. 408 (2003), which held that "few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." Id. at 425.

Boeken had been awarded $5.5 million in compensatory damages; hence, the Los Angeles court reasoned, $50 million in punitives -- nine times the compensatory award -- would be permitted under State Farm, but $100 million would not.

Those who have followed the Boeken case will recall that the original verdict was a major headline-grabber in that it gave the plaintiff $3 billion in punitives, or $5,133.47 per cigarette he'd ever smoked. Boeken had begun smoking in 1957 at age 14 and then smoked for 43 years before contracting lung cancer. Implausibly, Boeken claimed that he had "never heard or read about the health risks of smoking until congressional hearings were held in 1994."

The court was certainly not friendly toward the tobacco companies: it called the companies' conduct "reprehensible" and "repeated over a period of almost 50 years with an indifference to the health or safety of Boeken, a physically and psychologically vulnerable target." The court also gave a hat-tip to the most recent anti-tobacco theory by noting that Philip Morris "intentionally took advantage of the consumer expectation that 'light' cigarettes were safer."

But its anti-tobacco statements aside, the court's decision gives hope that the Supreme Court's decisions in Campbell may prevent the most extreme abuses of the litigation lottery. As Leah Lorber noted here last month, the Kentucky Supreme Court also recently relied on Campbell in vacating a $15 million punitive award against Ford. In contrast, as I noted in June, the Oregon Court of Appeals let stand a $79.5 million punitive judgment against Philip Morris, in a decision that essentially thumbed its nose at the highest Court in the land. We'll see how that progresses...

Meanwhile, in other tobacco-suit news, the government's case against the tobacco companies, which I mentioned yesterday, has now begun. For more commentary and links, see our editor's posting on Overlawyered.

Posted by James R. Copland at 10:56 AM | TrackBack (2)

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