KANSAS CITY, Mo. — In a groundbreaking decision Tuesday, a Missouri appeals court found evidence of intentional wrongdoing by a tobacco company but ordered the case retried on the issue of punitive damages.
In setting aside a $20 million punitive verdict — the largest ever awarded in Missouri in a smoking case — a three-judge panel of the Missouri Court of Appeals in Kansas City nonetheless found that evidence of Brown & Williamson's wrongful conduct was sufficient to submit to a jury.
The lengthy opinion written by Judge Robert G. Ulrich noted that Brown & Williamson "had an active process of creating controversy regarding the health risks of smoking and planned to dispute every surgeon general's report, regardless of what it was based upon."
"Further," Ulrich wrote, "B&W had policies of preventing harmful information from becoming available to the public and established procedures to ensure negative information did not reach the public."
Those facts, Ulrich said, rose to the level of "clear and convincing" evidence "tantamount to intentional wrongdoing."
The decision was noteworthy in two respects. First, the court found evidence of deliberate wrongdoing by a tobacco company. And second, the court ruled for the first time that the surviving families of tort victims can sue even if the victims had previously brought suit themselves.
Even so, the court sent the case back for a new trial on punitive damages because the basis of the jury's award was unclear.
Whether that will actually occur is somewhat uncertain because Judge James M. Smart dissented from Ulrich's opinion and exercised his prerogative to transfer the case to the Missouri Supreme Court. The high court could reach a different result from that of the Missouri Court of Appeals.
Despite the mixed outcome, the lead attorney for the plaintiffs, lawyer Ken McClain, hailed Tuesday's decision as a major victory for the plaintiffs.
"We get to retry punitive damages against a tobacco company? That's like the biggest gift you could ever get," he said.
Brown & Williamson did not return calls seeking comment.
The decision came in a case brought by the family of Barbara Smith, who had smoked Kool cigarettes for nearly 50 years and died of a heart attack in May 2000 at the age of 73.
Smith stopped smoking in 1990 after her physician told her that smoking would kill her unless she quit. She was diagnosed with lung cancer in 1992.
Smith sued Brown & Williamson in 1996. A federal judge ruled in favor of Brown & Williamson on some of her claims, but she died before the remaining claims went to trial, and the case was dismissed.
Her husband and children then brought their own lawsuit under Missouri's wrongful-death statute. In February 2005, a Jackson County jury awarded the family $2 million in compensatory damages (later reduced to $500,000 after Smith was found 75 percent at fault) and $20 million in punitive damages based on "aggravating circumstances."
Brown & Williamson appealed on multiple grounds. Among other things, it argued that the claims brought by Smith's family were fully decided in Smith's earlier, dismissed lawsuit.
In a lengthy, footnote-filled discussion of that point, Ulrich concluded that the dismissed lawsuit did not prevent the Smith family from bringing its own lawsuit under Missouri law.
The "manifest purpose" of Missouri's wrongful-death statute, he wrote, is to provide compensation to bereaved plaintiffs. The trial court's decision that the family's lawsuit was not barred by Smith's lawsuit was consistent with that purpose, he concluded.
In his dissent, Smart attacked that conclusion.
Why, he asked, would a company voluntarily settle a tort claim with a tort victim if it knew another case could be filed down the road by the victim's survivors?
Smart then transferred the case to the Missouri Supreme Court and said the majority decision was at odds with the plain language of Missouri's wrongful-death statute. Such transfers are authorized under the Missouri Constitution.
Much of the rest of the majority opinion concerned the jury's award of punitive damages, which in large part was based on the testimony of famed tobacco insider Jeffrey Wigand, Brown & Williamson's one-time director of research and now a fierce anti-tobacco crusader.
Wigand, who was the subject of a 1999 Hollywood movie, "The Insider," testified at the trial that, while he worked at the company, the president had a favorite saying: "Hook `em young; hook `em for life" — a reference to nicotine addiction.
He also testified that Kool cigarettes were noted for their harsh and irritating smoke and that Brown & Williamson added menthol to the cigarettes so that smokers could breathe the smoke more deeply into their lungs.
In other testimony, Wigand stated that he was trained not to write anything down that could be used in litigation and that minutes from meetings were sanitized before they were distributed.
"This is sufficient evidence of conduct tantamount to intentional wrongdoing to submit the issue to the jury," Ulrich wrote.
The jury found Brown & Williamson liable for negligence in failing to give adequate warning of the dangers of its products before July 1, 1969, when cigarette makers were required to post the following warning on all cigarette packages: "The Surgeon General Has Determined That Cigarette Smoking Is Dangerous To Your Health." The jury also found Brown & Williamson liable for negligence in designing a harmful product and found it strictly liable for designing a defective product.
Although the appeals court found insufficient evidence of intentional wrongdoing sufficient to warrant punitive damages on the first two claims, it found sufficient evidence to do so on the defective product claim. But because all three claims were submitted to the jury on a single form, which made it impossible for the appeals court to determine the basis of the punitive award, it sent the case back to the jury to retry the last claim alone.
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