Products Liability Law Daily References to tobacco settlement agreements admissible in individual Engle-progeny trials
Friday, July 23, 2021

References to tobacco settlement agreements admissible in individual Engle-progeny trials

By Pamela C. Maloney, J.D.

Damages paid to states under tobacco-litigation settlements were admissible as evidence of mitigation in individual Engle-progeny punitive damages trials.

Mitigation evidence consisting of the multi-billion dolor amounts that R.J. Reynolds had paid and continues to pay to the states under the terms of two tobacco-litigation settlement agreements was admissible as relevant to the issue of punitive damages in an Engle- progeny wrongful death action, a Florida District Court of Appeal ruled, denying a request for a new trial on punitive damages filed by a smoker’s estate (Blundell v. R.J. Reynolds Tobacco Co., July 21, 2021, Osterhaus, T.).

The personal representative of the estate of a deceased smoker filed an Engle-progeny wrongful death action against R.J. Reynolds Tobacco Co. and Philip Morris USA Inc. and was awarded $500,000 in compensatory damages on negligence and strict liability claims. The estate appealed the final judgment, arguing that it should have been allowed to seek punitive damages in addition to the compensatory damages. The appellate court agreed based on existing Engle-related law and, at the ensuing trial on punitive damages, Reynold’s introduced mitigation evidence regarding the obligations it had incurred under two litigation settlement agreements with various states. Testimony regarding these agreements referenced the fact that under these agreements, Reynolds had paid about $61 billion since 1998, with payments continuing indefinitely. The jury found that punitive damages were not warranted, and the estate appealed, arguing that the trial court abused its discretion in allowing the tobacco company to introduce the settlement agreements as mitigation evidence.

Mitigating evidence. The mitigation evidence regarding the sums paid by the tobacco company to settle Engle-progeny claims was relevant to the punishment and deterrence factors the jury must consider in assessing punitive damages. According to the appellate court, the heavy financial obligations and binding deterrent measures imposed by the settlement agreements applied to the same conduct for which the estate was seeking punitive damages and, therefore, the tobacco company was entitled to have the jury consider the settlements as potential mitigating factors in determining the need for further punishment and deterrence.

In addition, the settlements demonstrated the tobacco company’s attitude and conduct in response to Engle-progeny claims, as well as the tobacco company’s awareness of the problem, financial condition, and the jury’s total punishment calculation. The tobacco company was entitled to argue that the settlement payments and other sanctions imposed by the settlements had meted out a stiff punishment and effective deterrence that should be considered as part of the jury’s resolution of the appropriate degree of sanctions to be imposed during individual Engle-progeny trials.

Finally, basic due process considerations supported the tobacco company’s right to present this evidence, the appellate court opined. Forbidding the tobacco company from presenting this evidence and arguing that the settlement agreements-with their massive multi-billion-dollar payouts-materially punished and deterred their Engle-related conduct would undermine the due process clause’s prohibition against punishing a defendant without first providing an opportunity to present every available defense.

The case is No. 1D20-232.

Attorneys: Angelo M. Patacca (Terrell Hogan Yegelwel, P.A) for Teresa Starr Blundell. Chad A. Peterson (King & Spalding LLP) for R. J. Reynolds Tobacco Co.

Companies: R. J. Reynolds Tobacco Co.

MainStory: TopStory EvidentiaryNews DamagesNews TobaccoProductsNews FloridaNews

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