Bullock v. Philip Morris U.S. Inc.

• Citation: 2011 Daily Journal D.A.R. 12485,131 Cal.Rptr.3d 382,11 Cal. Daily Op. Serv. 10492,198 Cal.App.4th 543
• Decision Date: 17 August 2011
• Docket Number: No. B222596.,B222596.
• Court: California Court of Appeals
• Parties: Jodie BULLOCK, Plaintiff and Respondent,v.PHILIP MORRIS USA, INC., Defendant and Appellant.

198 Cal.App.4th 543
131 Cal.Rptr.3d 382
11 Cal. Daily Op. Serv. 10,492
2011 Daily Journal D.A.R. 12,485

Jodie BULLOCK, Plaintiff and Respondent,
v.
PHILIP MORRIS USA, INC., Defendant and Appellant.

No. B222596.

Court of Appeal, Second District, Division 3, California.

Aug. 17, 2011.

[131 Cal.Rptr.3d 386]

Shook, Hardy & Bacon, Frank P. Kelly, San Francisco; Mayer Brown, Lauren R. Goldman; Arnold & Porter, Ronald C. Redcay and E. Alex Beroukhim, Los Angeles, for Defendant and Appellant.Fred J. Hiestand, Sacramento, for Civil Justice Association of California as Amicus Curiae on behalf of Defendant and Appellant.Law Offices of Michael J. Piuze, Michael J. Piuze, Los Angeles; and Kenneth Chesebro for Plaintiff and Respondent.CROSKEY, J.

[198 Cal.App.4th 550] Philip Morris USA, Inc. (Philip Morris), appeals a judgment awarding Jodie Bullock $13.8 million in punitive damages after a jury trial. A jury previously had awarded $850,000 in compensatory damages. Philip Morris contends the punitive damages award is barred by res judicata as a result of the settlement of an action by the California Attorney General against Philip Morris and other cigarette manufacturers, and the award is unconstitutionally excessive. Philip Morris also challenges the award of prejudgment interest from the date of the verdict. We conclude that each of these contentions is without merit.

This action involves a different cause of action from the prior action by the Attorney General so res judicata is inapplicable. In addition, Philip Morris's conduct in intentionally deceiving smokers and the public in general for several decades concerning the adverse health effects of cigarette smoking, while formulating its cigarettes so as to make them more addictive, and

[131 Cal.Rptr.3d 387]

aggressively advertising to youths and others before July 1, 1969, was extremely reprehensible. In light of such extreme reprehensibility, including the vast scale and profitability of Philip Morris's misconduct, and its strong financial condition, the $13.8 million in punitive damages, approximately 16 times the compensatory damages award, is not unconstitutionally excessive. Finally, the trial court properly awarded prejudgment interest from the date of the verdict pursuant to Civil Code section 3287, subdivision (a) and rule 3.1802 of the California Rules of Court. In light of these conclusions, we will affirm the judgment and the order awarding prejudgment interest.FACTUAL AND PROCEDURAL BACKGROUND 1. Factual Background ¹

Betty Bullock smoked cigarettes manufactured by Philip Morris for 45 years from 1956, when she was 17 years old, until she was diagnosed with lung cancer in 2001. She smoked Philip Morris's Marlboro brand of cigarettes until 1966, and then switched to its Benson & Hedges brand. She died in February 2003.

Scientific and medical professionals in the United States and worldwide generally agreed by the late 1950's that cigarette smoking caused lung cancer, after several epidemiological studies reached that conclusion. Philip Morris [198 Cal.App.4th 551] and other cigarette manufacturers sought to cast doubt on the increasing body of knowledge supporting the conclusion that smoking caused lung cancer and sought to assuage smokers' concerns. To that end, Philip Morris and other cigarette manufacturers issued a full-page announcement in newspapers throughout the United States in January 1954 entitled “A Frank Statement to Cigarette Smokers.” The announcement stated, “Recent reports on experiments with mice have given wide publicity to a theory that cigarette smoking is in some way linked with lung cancer in human beings,” and stated that “[d]istinguished authorities point[ed] out” that there was no proof that cigarette smoking caused cancer and that “numerous scientists” questioned “the validity of the statistics themselves.”

The Frank Statement stated, “We accept an interest in people's health as a basic responsibility, paramount to every other consideration in our business. [¶] We believe the products we make are not injurious to health. [¶] We always have and always will cooperate closely with those whose task it is to safeguard the public health.” It announced the formation of the Tobacco Industry Research Committee and stated, “We are pledging aid and assistance to the research effort into all phases of tobacco use and health. This joint financial aid will of course be in addition to what is already being contributed by individual companies. [¶] ... [¶] In charge of the research activities of the Committee will be a scientist of unimpeachable integrity and national repute. In addition there will be an Advisory Board of scientists disinterested in the cigarette industry. A group of distinguished men from medicine, science, and education will be invited to serve on this Board. These scientists will advise the Committee on its research activities.” In the years that followed, the Tobacco Industry Research Committee and its publicists disseminated the message that there was no proof that cigarette smoking was a cause of lung cancer and other diseases through

[131 Cal.Rptr.3d 388]

news releases, distribution of research and editorial materials favorable to the tobacco industry, personal contacts with editors, journalists, and producers, and other means.

Philip Morris for many years publicly continued to insist that there was no consensus in the scientific community that cigarette smoking was a cause of lung cancer and that Philip Morris was actively pursuing scientific research to resolve the purported controversy, while privately acknowledging that there was no true controversy, that its true goal was to discredit reports that linked smoking with lung cancer, and that it had no intention of funding research that would reveal the health hazards of smoking. The Tobacco Institute, a trade organization funded by Philip Morris and other cigarette manufacturers, issued a press release in 1961 discrediting a recent article and stating that the views that smoking caused cancer “are a subject of much disagreement in the scientific world” and “the cause or causes of lung cancer continue to be unknown.” The Tobacco Institute stated in a press release in 1963 that the tobacco industry was “vitally interested in getting the facts that will provide [198 Cal.App.4th 552] answers to questions about smoking and health,” and described the industry's research efforts as a “crusade for research—in the agricultural stations, the scientific laboratories, and the great hospitals and medical centers of the nation.” It stated, “the industry does not know the causes of the diseases in question.”

A cigarette company executive appearing before Congress in 1965 on behalf of several cigarette manufacturers, including Philip Morris, stated that “[n]early everyone familiar with these difficult problems will agree ... that there is a very high degree of uncertainty” whether “smoking causes cancer or any other disease.” Later that year, the Tobacco Institute issued a press release stating, “Research to date has not established whether smoking is or is not causally involved in such diseases as lung cancer and heart disease, despite efforts to make it seem otherwise. The matter remains an open question-for resolution by scientists.” The press release stated, “we are earnestly trying to find the answers,” and, “If there is something in tobacco that is causally related to cancer or any other disease, the tobacco industry wants to find out what it is, and the sooner the better. If it is something in tobacco or the smoke, I am sure this can be remedied by the scientists.”

Philip Morris's chief executive officer and chairman of the Executive Committee of the Tobacco Institute, Joseph Cullman III, stated on the television news program Face the Nation (CBS, Jan. 3, 1971), “if any ingredient in cigarette smoke is identified as being injurious to human health, we are confident that we can eliminate that ingredient.” He stated further, “We do not believe that cigarettes are hazardous; we don't accept that.” The Tobacco Institute issued a report in 1979 entitled Smoking and Health 1969–1979: the Continuing Controversy, stating, “Scientists have not proven that cigarette smoke or any of the thousands of its constituents as found in cigarette smoke cause human disease.” The Tobacco Institute issued a report in 1984 entitled The Cigarette Controversy: Why More Research is Needed, and emphasized that “ it is not known whether smoking has a role in the development of various diseases ... a great deal more research is needed to uncover the causes and the mechanisms involved in their onset.” The 1984 report stated that the theory that cigarette smoking causes various diseases “is just that, a theory” and stated, “There were basic flaws in the methods used in the major epidemiological surveys that cast doubts on the accuracy of the claimed correlations.”

[131 Cal.Rptr.3d 389]

Contrary to its repeated public pronouncements, Philip Morris privately acknowledged the link between cigarette smoking and lung cancer and other diseases and sought to avoid promoting any research that would reveal that link. An internal document prepared by Philip Morris in 1961 for purposes of [198 Cal.App.4th 553] research and development stated, “Carcinogens are found in practically every class of compounds in smoke,” and provided a “partial list” of 40 “carcinogens” in cigarette smoke.

A 1970 memorandum from a Philip Morris research scientist to its president stated of the Council for Tobacco Research, the successor of the Tobacco Industry Research Committee, “It has been stated that CTR is a program to find out ‘the truth about smoking and health.’ What is truth to one is false to another. CTR and the Industry have publicly and frequently denied what others find as ‘truth.’ Let's face it. We are interested in evidence which we believe denies the allegation that cigarette smoking causes disease.” Notes from a 1978...