Products Liability Law Daily $16M punitive damages award against R.J. Reynolds for smoker’s death deemed excessive
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Monday, October 26, 2020

$16M punitive damages award against R.J. Reynolds for smoker’s death deemed excessive

By Kathleen Bianco, J.D.

Review of the award was necessitated by the huge disparity between the compensatory and punitive damages awards.

A Florida jury’s $16 million punitive damages award against cigarette manufacturer R.J. Reynolds Tobacco Co. in an action brought by the estate of a smoker who died from lung cancer caused by smoking cigarettes was found to have been excessive by a Florida court of appeals. The appellate court reviewed the punitive damages under both state and federal due-process concerns and concluded that the award, which exceeded the compensatory damages award by a ratio of 106.7 to 1 (based upon actual damages received after apportionment of fault), was unsustainable (R.J. Reynolds Tobacco Co. v. CoatesOctober 23, 2020, Orfinger, R.).

A woman, acting as the representative of her sister’s estate, sought damages following her sister’s death from a cigarette-related illness which she alleged was caused by her sister’s addiction to cigarettes containing nicotine. The complaint alleged that the manufacturer’s cigarette products were addictive, habituating, habit-forming, and, once used, caused physical and psychological dependence. Moreover, the complaint alleged that, among other things, the manufacturer’s product was unsafe because it failed to reduce the inhalation of tar and other carcinogens through filtration, provided excessive nicotine, and did not include product information data sheets or accurately or legibly list the ingredients contained within the cigarettes.

Following a trial, a Florida jury awarded $300,000 ($100,000 to each surviving child) for the loss of parental companionship, instruction, and guidance, and for the children’s mental pain and suffering resulting from their mother’s illness and death, but reduced that award 50 percent based on the apportionment of fault to the smoker [see Products Liability LawDaily’s April 2, 2019 analysis]. The jury further assessed punitive damages in the amount of $16 million against R.J. Reynolds. R.J. Reynolds challenged the punitive damages award as excessive when considered in relation to the $150,000 net compensatory damages award and asserted that the trial court erred in denying its motion for a new trial or remittitur.

Excessiveness under state law. Florida law limits punitive damages to no more than three times the amount of compensatory damages, unless it can be shown by clear and convincing evidence that the award is not excessive based upon the circumstances presented to the trier of fact. After determining that the evidence supported an award in excess of the presumptive 3 to 1 ratio, the appellate panel evaluated whether the evidence supported the $16 million punitive damages award. State statute sets out five criteria for assessing whether an award is excessive. The manufacturer argued that two of the stated criteria required that the award be reversed. First, the manufacturer claimed that the award was "self-evidently" excessive and that the jury was impermissibly influenced by prejudice or passion. The appellate panel rejected this assertion, finding that, based upon a review of similar cases, the award was not indicative of passion or prejudice. Next, the manufacturer argued that the punitive damages award, which was 106.7 times greater than the $150,000 net compensatory award, bore no reasonable relation to the injury suffered. Although the panel found that an award greater than the 3 to 1 ratio was appropriate, it concluded that the enormity of the disparity between the punitive and compensatory damages in this case was not warranted. Thus, the punitive damages award was deemed excessive and unsustainable under state law.

Federal due process. While states possess broad discretion with respect to the imposition of punitive damages, that discretion is constrained by the Eighth Amendment’s prohibition against excessive fines pursuant to the Fourteenth Amendment. In order to ensure that the due process limits on punitive damages are not exceeded, courts must find a reasonable relationship between the punitive and compensatory damages awarded. The U.S. Supreme Court identified three factors to consider when evaluating whether a punitive damages award is unconstitutionally excessive. These factors include: (1) the degree of reprehensibility of the misconduct; (2) the disparity between the actual or potential harm suffered by the injured party and the punitive damages award; and (3) the difference between the punitive damages awarded and the civil penalties authorized or imposed in comparable cases. While the appellate court agreed that reprehensibility was established, the evidence of reprehensibility was not so great that it negated consideration of the other factors, both of which supported a finding that the award in a ratio of 106.7 to 1 (or even 53.3 to 1) was excessive under federal due process. Accordingly, the punitive damages award was reversed and remanded for entry of an order of remittitur or, if remittitur is rejected by either party, a new trial on the issue of the amount of the punitive damages.

The case is No. 5D19-2549.

Attorneys: Marie A. Borland (Hill, Ward & Henderson, P.A.) and Charles R.A. Morse (Jones Day) for R.J. Reynolds Tobacco Co. John S. Mills (Bishop & Mills, PLLC) and Andrew B. Greenlee (Andrew B. Greenlee, P.A.) for Brinda Coates.

Companies: R.J. Reynolds Tobacco Co.

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