Mass. Top Court Upholds $56 Million Damages Award Against Philip Morris
The Massachusetts Supreme Judicial Court has dealt tobacco company Phillip Morris USA a blow by unanimously upholding a $56 million punitive damages award in a wrongful death case.
A lower court had previously reduced the punitive damages award from $1 billion but the tobacco firm wanted a new trial or the amount further reduced. The company argued that such awards should be subject to a higher “clear and convincing” evidence standard rather than the “preponderance of the evidence” standard. The firm also alleged that the jury was “inflamed by passion and prejudice” and thus damages should be decided in a separate trial from liability.
However, the state’s high court, citing what Justice Gabrielle Wolohojian wrote was Philip Morris’s “reprehensible conduct over decades” in targeting minors and engaging in fraud, said the big award was justified and within constitutional limits.
A trial jury had awarded $8 million in compensatory damages and $1 billion in punitive damages. The trial judge reduced the punitive damages to $56 million, about seven times the compensatory amount.
Single Digit Ratio
The high court noted that the $56 million amount is in keeping with the rule advanced by the U.S. Supreme Court (BMW v. Gore) that punitive damages should fall within a “single digit” ratio (less than 10 times) of the compensatory damages.
“The body of evidence concerning the company’s reprehensible conduct over decades provided a robust basis upon which the jury could conclude without resort to passion or prejudice that the company had engaged in malicious, willful, wanton, or reckless conduct, and was grossly negligent, such that an award of punitive damages of significant magnitude was appropriate,” the high court concluded in its unanimous opinion.
The state court further commented that a large award is appropriate for the company since it was making $20 million in daily profits.
The high court found that a higher standard of evidence is not appropriate because the matter involves a financial penalty and not a basic liberty. As for bifurcated trials on liability and damages, the high court affirmed whether to do that is a matter of discretion for a judge and not mandatory.
Plaintiffs
The lawsuit was brought by the husband and two children of Barbara Fontaine, who began smoking as a teenager and died of lung cancer in 2017 at age 60. After a four-week trial, a jury found that Philip Morris USA breached the implied warranty of merchantability by failing to offer reasonable safer alternative types of cigarettes; negligently designed its cigarettes; negligently marketed its cigarettes to Fontaine when she was a minor; engaged in fraud; and entered into a concerted action conspiracy with other tobacco companies and organizations.
The jury concluded that each of these actions caused Fontaine’s lung cancer and death.
Jurors were told that from 1989 to 2015, Fontaine resorted to a variety of methods to quit smoking, including nicotine patches, nicotine gum, electronic cigarettes, prescription medication, tapering her cigarette use, and going “cold turkey.” She also went to the “Mad Russian,” a former Moscow artist who emigrated to Brookline and offered an alternative healing method he called “bioenergetics” to help quit smoking and other addictions.
Past Awards
This is not the first time Philip Morris has been hit with a large damage award in Massachusetts over its tobacco sales. The state’s high court has previously upheld judgments of $36 million and $21 million against Philip Morris.
In 2024, a Massachusetts jury awarded $150 million in punitive damages against another tobacco company, R.J. Reynolds. The trial judge reduced that to $50 million.
The high court noted that juries in other jurisdiction have awarded higher punitive damages against large corporations including Exxon, Monsanto and Johnson & Johnson. In those cases, the courts decided that reducing the award, rather than a new trial, was sufficient to cure any excess in the verdict.