Today in 2002: California jury awards $28 billion in damages against Philip Morris

October 4, 2013

Today in Legal HistoryOn October 4, 2002, a Los Angeles jury awarded $28 billion in punitive damages against tobacco maker Philip Morris – the largest tobacco damages award that had ever been issued in an individual case.

The individual plaintiff – Betty Bullock – was a 64-year-old woman with inoperable lung cancer who sued the tobacco giant for negligence, strict product liability, and fraud.

Eight days earlier, on September 26th, the same jury awarded $850,000 in compensatory damages to Bullock, making the punitive damages to compensatory damages ratio a whopping 33,000 to 1.

This award is historically significant for several reasons.

First, as already stated, the $28 billion in damages was the largest ever awarded to an individual plaintiff (in 2000, $145 billion in punitive damages was awarded by a Florida jury, but the case was a class-action with over 500,000 plaintiffs).

Second, the timing of this award is important: the late 1990’s and early 2000’s saw the bucking of a previous trend of virtually universal success by tobacco companies in fending off lawsuits – a trend that started in the 1950’s.

The trend’s reversal was due in part to increased public awareness of the health risks posed by tobacco use, but, more notably, was thanks to increased access to tobacco companies’ internal operations and communications.  

As stated by the trial judge in Bullock’s case, this included evidence that demonstrated tobacco company executives’ knowledge since the 1950’s that cigarette smoke caused lung cancer, and that nicotine was a highly addictive drug.  Furthermore, evidence also demonstrated that tobacco companies destroyed any research results showing an adverse health impact from tobacco use, and further went to great lengths to convince the public that smoking was not harmful or addictive.  Finally, evidence showed that tobacco companies actively marketed their products to children.

Not coincidentally, it was this evidence that outraged the jury so to slap Philip Morris with a staggering 11-figure punitive damages award.

As would be expected, Philip Morris vowed to appeal the decision, which it promptly did following the denial of its motion for judgment notwithstanding the verdict and its motion for new trial.

The appeal process then dragged on for nine years, with the final decision in the matter being made on August 17, 2011.

The good news for Bullock was her damages award survived until the end.

The bad news for Bullock was that her punitive damages award was reduced to one-tenth of a percent by the reviewing court to $28 million – not to mention the fact that she never lived to enjoy that money, since she died in February 2003.

Jury verdicts of the magnitude of Bullock’s original award against tobacco companies are far rarer today than ten years ago, thanks in no small part to many court decisions such as the one in Bullock that slashed the jury award to a thousandth of its original size.

The U.S. Supreme Court even weighed in on the issue of punitive damages against tobacco companies in 2007’s Philip Morris USA v. Williams, which ruled that punitive damages to punish defendant for harming nonparties of the case amounted to a government taking without due process, and was thus unconstitutional.

The sheer amount of tobacco litigation case law developed in this short period of time greatly overshadows the amount of case law generated at any time previous, with even state attorneys general getting involved in suing tobacco giants.

The sad reality is, however, that despite how many millions of dollars some of these plaintiffs had recovered in damages, most don’t live long enough to enjoy it because of the damage wrought by lifelong tobacco use.