Henley v. Philip Morris Inc.
(Personal Injury US Sup. Ct. 1999 Pltf Paid) Citation: 113 Cal.Rptr.2d 494, 93 Cal.App.4th 824 (2001); 114 Cal.App.4th 1429, 9 Cal.Rptr.3d 29 (2004)This individual personal injury suit was brought by Patricia Henley against Philip Morris on May 5, 1999.
The plaintiff alleged that her lung cancer was caused by smoking cigarettes. She began smoking at age 15 in 1961 or 1962. She smoked 1 1/2 packs of Marlboro Reds a day until 1989 and Marlboro Lights after that. After she switched, her consumption increased to 3 1/2 packs per day. In a relatively short amount of time the plaintiff had become addicted to smoking. She was diagnosed with small-cell carcinoma of the lung in February 1998. By the time the plaintiff began smoking, the defendant and other cigarette manufacturers had agreed to act together in concealing the health risks of smoking. The defendant targeted advertising at teenage audiences to draw in "replacement" smokers. The plaintiff claimed product liability, failure to warn, negligence, breach of express warranty, intentional and negligent misrepresentation, fraudulent concealment and fraudulent promise.
The defendant asserted that Federal Cigarette Labeling and Advertising Act (FCLAA) preemption, and preemption based on California safe harbor laws in effect from 1988 to 1998.
The case was heard in the Superior Court of the State of California in and for the County of San Francisco (No. 995172), before the Honorable John Munter. The jury returned a verdict for the plaintiff on February 16, 1999 consisting of $1.5 million in compensatory damages and $50 million in punitive damages. The judge reduced the punitive damages to $25 million. The defendant appealed.
The Court of Appeal of the State of California, First Appellate District, Division Four(93 Cal.App.4th 824), initially affirmed the judgement (Henley I) on November 7, 2001. The suggestion of preemption under the FCLAA was too vague for the court to consider in regard to the admissibility of evidence. The defendant waived much of its objection to the jury instructions regarding the issue by giving stipulated consent to the instructions used except as to conspiracy to conceal after 1969. Barring the conspiracy instruction would not have had an impact on the outcome of the case, since the jury found for the plaintiff on all of its legal theories. The plaintiff's claims based on consumer expectation were not barred by the presence of a federally mandated warning, by the plaintiff's failure to heed those warnings, or by presenting expert witnesses. The Restatement of Torts' reference to unreasonably dangerous products was not a complete bar to the plaintiff's claim, and the defendant did not raise it with sufficient specificity for the court to deal with it any other way. Matters of opinion were actionable under a fraudulent misrepresentation claim because the defendant was in a position of superior knowledge and the plaintiff reasonably relied on its statements, which were issued to the general public. The evidence was sufficient to show an express warranty that Lights contained less tar and nicotine. The defendant failed to overcome the jury finding that neither the plaintiff, nor the public, adequately appreciated the health risks of smoking. Evidence that the defendant targeted teenagers was sufficient to warrant punitive damages. The 17:1 ratio between punitive and compensatory damages was not grossly excessive, given the severity of the conduct and statutory fines for selling tobacco to children.
The California Supreme Court granted review and retransferred the case with an order to vacate the decision and reconsider in light of Myers v. Philip Morris and Naegele v. R.J. Reynolds.
On March 19, 2003, The Court of Appeals again affirmed on the basis that the defendant's objections had not been preserved for appeal. The California statute, passed in 1988, granted immunity to cigarette manufactures until it was repealed, effective the beginning of January 1, 1998. In Myers, the court determined that this repeal was not retroactive, and did not impose liability for conduct that occurred during the protected period. The defendant first raised this issue in its motion for a new trial, which was not sufficient to preserve the matter for an appeal. Also, because the plaintiff's injuries were due to conduct both in and outside of the immunity period, it does not provide a complete defense to the claims. The defendant failed to preserve any appeal to the time-limited immunity as well, by failing to indicate that the statute might restrict admissibility of evidence concerning conduct during the immunity period. The trial judge's denial of the statute's use as a total defense did not prohibit the defendant from using it in objections to evidence, or requesting appropriate jury instructions. The court then reiterated their previous ruling.
The California Supreme Court granted review a second time and remanded for reconsideration in light of State Farm v. Campbell. This time, the Court of Appeal (5 Cal.Rptr.3d 42) affirmed in part, but vacated the punitive damages award and ordered a new trial unless plaintiff would accept an award of $9 million. The plaintiff agreed to the reduction. The California Supreme Court granted a third review and again retransferred the case.
The California Court of Appeal, First District, Division 4 (114 Cal.App.4th 1429) affirmed the case as modified on September 25, 2003. It found that statutory immunity during an effective period was not sufficient to excuse the defendant's conduct from being offered in support of the plaintiff's case. The defendant failed to show any impactful error in the jury instructions regarding concealment after the enactment of the Federal Public Health Cigarette Smoking Act. The mandatory warnings on cigarettes did not preclude failure of the California consumer expectations test. The defendant acted both in concert and individually to issue false denials of the dangers of smoking such that the plaintiff was unaffected by reports of adverse health effects. The defendant expressly assured the plaintiff that "Lights" cigarettes reduced smoking risks. A 6-to-1 ratio ($9 million) of punitive damages was justified.
The California Court of Appeals denied the defendant's motion for rehearing on February 13, 2004.
The California Supreme Court affirmed the judgment on September 16, 2004.
The United States Supreme Court denied certiorari on March 21, 2005.
Philip Morris paid $16.7 million including interest to the plaintiff.