1. Why Big Tobacco Should Pay Big Punitive Damages Sara D. Guardino Richard A. Daynard Tobacco Control Resource Center Northeastern University School of Law Boston, Massachusetts

2. What are “damages”? The money you get if you win a civil lawsuit Two kinds discussed today: (1) Compensatory damages (2) Punitive damages

3. Compensatory Damages Also called “actual” damages. In theory, they put the plaintiff back in the same position he or she was in before the defendant caused harm. Make the plaintiff “whole again.”

4. Punitive Damages Like criminal sanctions, punitive damages punish and deter. Proper amount?

5. Car Accident Damage to car:$2,000 Medical bills:$3,000 Lost wages:$5,000 _____________________________ TOTAL:= $10,000 in compensatory damages = ??? in punitive damages

6. What should the punitive damages award be? Calculating the proper amount of punitive damages is not straightforward at all. The answer really depends on the circumstances of the particular case at hand.

7. State Farm v. Campbell (U.S. Supreme Court) “The most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.”

8. Determining Reprehensibility Courts should consider the following factors. 1.Was the harm physical or economic? 2. Did the conduct show an indifference to or a reckless disregard of the health or safety of others? 3.Was the target of the conduct financially vulnerable? 4.Did the conduct involve repeated actions or was it an isolated incident? 5. Was the harm a result of intentional malice, trickery, or deceit, or was it mere accident?

9. 1.Was the harm physical or economic? “Here, the harm caused was... for [plaintiff], the most serious physical harm possible, his death.”

10. 2. Did the conduct show an indifference to or a reckless disregard of the health or safety of others? Philip Morris’s “conduct not only shows a reckless disregard of the safety of others, but [also shows] knowledge that others would be harmed by its actions.”

11. 3.Was the target of the conduct financially vulnerable? Although this depends on the individual plaintiff, in most cases the plaintiff’s resources are no match for those of the tobacco industry.

12. 4.Did the conduct involve repeated actions or was it an isolated incident? “Not only did defendant’s conduct involve repeated action, those actions were directed at [smokers] over a period of 40 years.”

13. 5.Was the harm the result of intentional malice, trickery, or deceit? “Here, defendant intentionally misled the... public regarding the results of its research and increased the nicotine in its products to make them more addictive and more dangerous.”

14. More from the courts… “Such conduct supports a substantial award sufficient to reflect the moral opprobrium in which defendant’s conduct can and should be held, and warrants something approaching the maximum punishment consistent with constitutional principles.” (Henley v. Philip Morris, Inc., Court of Appeal of California)

15. More from the courts… “Defendant sold a product that it knew would cause death or serious injury to its customers when they used it as defendant intended them to use it. Despite that knowledge, defendant, together with the rest of the tobacco industry, engaged in an extensive campaign to convince smokers that the issue of cigarette safety was unresolved.” (Williams v. Philip Morris, Inc., Oregon Court of Appeals)

16. State Farm v. Campbell (U.S. Supreme Court) “Few awards [of punitive damages] exceeding a single- digit ratio between punitive damages and compensatory damages, to a significant degree, will satisfy due process.”

17. State Farm v. Campbell (U.S. Supreme Court) In other words, the Court suggested that most punitive damages awards that are greater than nine times the compensatory damages amount will not be constitutional.

18. State Farm v. Campbell (U.S. Supreme Court) “Few awards exceeding a single- digit ratio between punitive damages and compensatory damages... will satisfy due process.”

19. “Scorched Earth” “Plus factor” exists when it comes to smoking and health litigation. Another form of reprehensibility: the litigation tactics the industry uses whenever it is sued. “Scorched earth” litigation tactics: leave no stone unturned, hunt for any piece of dirt that exists about plaintiff.

20. “Scorched Earth” Tobacco companies have “insist[ed] on a cradle-to-grave investigation of plaintiffs’ lives. Marriages, job histories, personal hygiene, eating habits and even church going practices come under scrutiny.” The companies “muck around in the past until they find something damaging” and “[t]hen they play on it until the suit is dropped.”

21. “Scorched Earth” “[T]he aggressive posture we have taken regarding depositions and discovery in general continues to make these cases extremely burdensome and expensive for plaintiffs’ lawyers, particularly sole practitioners. To paraphrase General Patton, the way we won these cases was not by spending all of Reynolds’ money, but by making that other son of a bitch spend all his.”

22. “Scorched Earth” Tobacco company defendant puts the plaintiff “on trial.” Conducts extensive interviews and depositions not only of the plaintiff, but also of all the plaintiff’s acquaintances who possibly could have a shred of information about the plaintiff or the case.

23. “Scorched Earth” Tobacco company document: The industry has a critical need to gather “information the plaintiffs do not [have]” and to “[i]ntimidate plaintiff’s experts who will not be effectively able to counteract the precise nature of our testimony.”

24. “Scorched Earth” Tobacco company document: Instructs investigators to interview the plaintiff’s co- workers, supervisors, neighbors, friends, relatives, schoolmates, teachers, and athletic coaches.

25. “Scorched Earth” Example: Widow deposed for days with questions about dating other men subsequent to her husband’s death, and the decedent’s daughter was questioned about information given to her psychiatrist.

26. “Scorched Earth” Example: Tobacco company sent subpoenas to all of the plaintiff’s former employers back to the time that he was a very young man, and demanded Christmas cards, family diaries, phone logs, and lists of attendees at the family’s weddings and birthdays.

27. Example 100 smoking & health plaintiffs: Plaintiffs #1-#99 go broke before trial or can’t withstand tobacco industry tactics 100 th plaintiff makes it to trial and is successful Tobacco company should have to pay punitive damages award sufficient to cover all 100 plaintiffs

28. In Summary… Tobacco industry makes it so difficult that most plaintiffs run out of money or give up before cases get to trial. Therefore, when a tobacco case actually does make it to trial and the plaintiff is successful, the punitive damages award should be especially high.

29. Upcoming Article: Punishing Tobacco Industry Misconduct: The Case for Exceeding a Single Digit Ratio Between Punitive and Compensatory Damages Sara D. Guardino and Richard A. Daynard University of Pittsburgh Law Review Volume 67, Issue 1 (forthcoming September 2005)

30. For more information… Sara D. Guardino Richard A. Daynard Tobacco Control Resource Center Northeastern University School of Law www.tplp.org 617-373-2026 sara@tplp.org