December 16, 2008

Missouri Court of Appeals Reverses $20 Million Punitive Damages Award Against Tobacco Company

The Kansas City Business Journal reports that the Missouri Court of Appeals has reversed a $20 million punitive damages award against Brown & Williamson Tobacco Corp. Click here to view the opinion. The plaintiffs, family members of a deceased smoker, brought a wrongful death action under Missouri law and obtained a jury award of $500,000 in compensatory damages and $20 million in punitive damages, a ratio of 40 to 1. The Court of Appeal reversed, ordering a new trial on punitive damages, on the ground that only one of the plaintiffs' three liability theories was supported by substantial evidence. (Note: in California, punitive damages are not permitted at all in wrongful death actions.)

This case comes on the heels of yesterday's much less favorable decision for the tobacco industry in Altria Group Inc. v. Good, in which the U.S. Supreme Court ruled that federal law does not preempt suits by smokers who claimed they were mislead about the dangers of "light" cigarettes. As reported by Bloomberg, the ruling paves the way for smokers in various states to proceed with lawsuits seeking punitive damages.