Products Liability Law Reporter

The Eleventh Circuit Court of Appeals held that a punitive damages award in a federal Engle progeny case that was more than three times the amount of the compensatory damages awarded to the plaintiff was not unconstitutionally excessive.

Judith Berger began smoking at age 13 and smoked more than a pack a day by the age of 20. Although she tried to quit smoking at various times in her life, she was unable to do so until she was diagnosed as having chronic obstructive pulmonary disease (COPD). Berger sued Philip Morris USA as an Engle class member, alleging strict liability, negligence, fraudulent concealment, and conspiracy to fraudulently conceal. At trial, the plaintiff presented extensive evidence of the defendant’s marketing to young people and the company’s engagement in a massive disinformation campaign designed to sow doubt about the link between smoking and fatal disease. The jury awarded the plaintiff $6.25 million in compensatory damages and held that the plaintiff was entitled to punitive damages on her intentional tort claims. The jury subsequently awarded the plaintiff $20.76 million in punitive damages.

The defendant moved for a new trial or for a reduction in damages based on the excessiveness of the punitive award. The defendant also moved for judgment as a matter of law on the plaintiff’s intentional tort claims. The district court granted judgment as a matter of law on the intentional tort claims and vacated the punitive damages award. The Eleventh Circuit reversed the district court’s order granting the defendant’s motion for judgment as a matter of law. On remand, the district court entered an amended judgment of $6.25 million in compensatory damages and approximately $20.7 million in punitive damages. The defendant filed a motion arguing for a reduction or voiding of the punitive damages award as unconstitutionally excessive in violation of due process. The district court denied the motion.
Affirming, the Eleventh Circuit noted that although punitive damages may be awarded to further the government’s interest in punishing and deterring unlawful conduct, a punitive damages award must comport with due process. The three factors used to determine whether a punitive damages award is excessive are the reprehensibility of the defendant’s conduct, the ratio of the punitive damages to the actual damages awarded, and the difference between the actual and punitive awards as compared to similar cases.

The court noted that the facts here indicate that the defendant had engaged in reprehensible conduct. Berger’s COPD resulted from her addiction to cigarettes, the court said, and the defendant had worked to suppress the link between cigarette smoking and deadly disease by engaging in a massive disinformation campaign. Moreover, the defendant deliberately targeted young people as part of its marketing strategy, the court found, adding that the defendants had engaged in this conduct repeatedly and not as part of an isolated incident. Thus, the court concluded that the defendant’s conduct was reprehensible.

Considering the ratio of punitive damages to the actual harm inflicted on the plaintiff, the court said that the U.S. Supreme Court has noted that hundreds of years of legislative history have allowed for sanctions of double, treble, or quadruple damages to punish and deter certain behavior. Berger’s punitive award, which is roughly a 3.3-to-1 ratio to her compensatory award, is a single-digit multiplier and less than four times the amount of punitive damages.

Accordingly, the court concluded that the punitive damages awarded to Berger were not excessive.

The court also found that the Florida Supreme Court has held that in comparable cases, the civil penalty awarded is often three times as much as the compensatory award. The ratio here, the court said, is remarkably close to this treble multiplier, supporting the validity of the punitive damages award.

Consequently, the court held that the award here was not excessive or a violation of due process.

Citation: Cote v. Philip Morris USA, Inc., 2021 WL 162022 (11th Cir. Jan. 19, 2021).

Plaintiff counsel: AAJ member Kenneth S. Byrd, Kathryn E. Barnett, AAJ member John T. Spragens, and AAJ member Andrew R. Kaufman, all of Nashville, Tenn.; AAJ member Robert J. Nelson, AAJ member Elizabeth J. Cabraser, AAJ member Richard M. Heimann, AAJ member Sarah R. London, Martin D. Quinones, and AAJ member Todd A. Walburg, all of San Francisco; AAJ member Frederick C. Baker, Sara O. Couch, Rebecca M. Deupree, AAJ member Robert T. Haefele, AAJ member James W. Ledlie, AAJ member Patrick G. Maiden, AAJ member Donald A. Migliori, AAJ member Lance V. Oliver, AAJ member Joseph F. Rice, AAJ member Lisa M. Saltzburg, AAJ member Elizabeth S. Smith, and Elizabeth C. Ward, all of Mount Pleasant, S.C.; AAJ member Steven L. Brannock, AAJ member Celene Harrell Humphries, and AAJ member Thomas J. Seider, all of Tampa; AAJ member Charles E. Farah Jr., Orange Park, Fla.; AAJ member Nathan D. Finch, Washington, D.C.; Stephanie J. Hartley, Richard Lantinberg, and Janna Blasingame McNicholas, all of Jacksonville, Fla.; AAJ members Mathew Jasinski and Michael J. Pendell, both of Hartford, Conn.; AAJ member Maegen P. Luka, Orlando, Fla.; and Samuel Issacharoff, New York City.