Laramie v. Philip Morris USA Inc.

• Decision Date: 15 September 2021
• Docket Number: SJC-13070
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Pamela LARAMIE v. PHILIP MORRIS USA INC.

488 Mass. 399

173 N.E.3d 731

Pamela LARAMIE¹

v.PHILIP MORRIS USA INC.

SJC-13070

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 3, 2021.

Decided September 15, 2021.

The following submitted briefs for amici curiae:

William J. Trach, for the defendant.

Celene H. Humphries, of Florida, for the plaintiff.

Maura Healey, Attorney General, & William W. Porter, Assistant Attorney General, for the Attorney General.

Traci L. Lovitt, Christopher M. Morrison, & Kate Wallace, Boston, for R.J. Reynolds Tobacco Co.

Holly M. Polglase & Peter C. Netburn, Boston, for Product Liability Advisory Council, Inc., & another.

Andrew Rainer, Boston, & Meredith Lever, for Public Health Advocacy Institute.

Douglas S. Brooks, Boston, for Washington Legal Foundation.

Present: Budd, C.J., Gaziano, Lowy, Cypher, Kafker, & Wendlandt, JJ.

WENDLANDT, J.

In this case, we consider whether a 1998 settlement agreement between Philip Morris USA Inc. (Philip Morris) and the Attorney General precludes recovery of punitive damages against Philip Morris under the wrongful death statute, G. L. c. 229, § 2, for claims brought by the widow of a smoker who died from lung cancer

after decades of smoking Philip Morris cigarettes. In 1995, the Attorney General filed a complaint against Philip Morris and other manufacturers of tobacco products and tobacco research institutes in the Superior Court, alleging, inter alia, that the companies had engaged in a conspiracy to mislead the Commonwealth and its citizens concerning the health risks of smoking. The Attorney General sought to recover the Commonwealth's costs for providing smoking-related medical assistance to Massachusetts residents under the Commonwealth's Medicaid and CommonHealth programs, see G. L. c. 118E, as well as injunctive relief, civil penalties, and punitive damages pursuant to the consumer protection act, G. L. c. 93A. The Attorney General asked that the companies be ordered to pay restitution and fund smoking cessation programs and public information campaigns. The parties settled the case in 1998, as part of a nationwide settlement.

Nearly two decades later, in 2017, the plaintiff sued Philip Morris, pursuant to the wrongful death statute, G. L. c. 229, § 2 ; the plaintiff claimed that Philip Morris caused her husband's death in 2016 by, inter alia, selling defective and unreasonably dangerous cigarettes to him beginning in 1970. A jury awarded the plaintiff $11 million in compensatory damages and $10 million in punitive damages. On appeal, Philip Morris argues that while the 1998 settlement had no effect on the plaintiff's wrongful death claim insofar as it sought compensatory damages, the settlement precluded the plaintiff's recovery of punitive damages.

As the doctrine of claim preclusion does not apply in these circumstances, we disagree. Because Philip Morris was not prejudiced by the other asserted errors at trial, we affirm the judgment.²

1. Background. We recite the relevant facts in the light most favorable to the plaintiff. See Linkage Corp. v. Trustees of Boston Univ., 425 Mass. 1, 4, 679 N.E.2d 191, cert. denied, 522 U.S. 1015, 118 S.Ct. 599, 139 L.Ed.2d 488 (1997) (facts are recited in light most favorable to party for whom jury found).

In the summer of 1970, when Fred Laramie was thirteen years old, he smoked his first cigarette; a salesman had handed him a free sample pack of Marlboro cigarettes, a Philip Morris brand. Within a year, Laramie was smoking every day. One or two years later, he was smoking a pack per day. Laramie smoked Marlboro cigarettes for much of the rest of his life. In December 2016, when he was fifty-nine years old, he died of lung cancer

.

In July 2017, the plaintiff, Laramie's wife, brought a civil action against Philip Morris³ pursuant to the wrongful death statute, G. L. c. 229, § 2. She alleged, among other things, that Philip Morris had committed a breach of the implied warranty of merchantability by manufacturing, selling, and distributing defectively designed cigarettes, and thereby causing Laramie's death.⁴

At trial, the plaintiff demonstrated that Marlboro cigarettes were defective and unreasonably dangerous to a person who was not yet addicted to smoking. The plaintiff's expert testified that Marlboro cigarettes were "highly engineered" to deliver nicotine and sustain addiction, that repeatedly smoking Marlboro cigarettes caused lung cancer

, and that it would have been feasible for Philip Morris to create a safer, nonaddictive alternative.

The same expert testified that at the time Laramie began smoking in 1970, the public perceived smoking to be "desirable, socially acceptable, [and] pleasurable." This perception, according to the expert, was attributable largely to "pervasive" advertising by Philip Morris and the cigarette industry. Through testimony and documentary evidence, the plaintiff showed that Philip Morris had engaged in a sophisticated public relations campaign to foster doubt about the reported risks of smoking, and to assure the public that smoking was safe, while, internally, it understood the dangerousness and addictiveness of its cigarettes.

The evidence showed that Laramie was addicted to the nicotine in Marlboro cigarettes, and that once he was addicted, smoking became a "need" rather than a "choice." Although Laramie tried to quit smoking many times, he was unable to do so, until he was diagnosed with lung cancer

in 2016. He died less than seven months thereafter.

In its defense, Philip Morris introduced evidence that there was no adequate, safer alternative design for Marlboro cigarettes. An expert for Philip Morris testified that all cigarettes are dangerous, and that any proposed alternative design was not safer, not acceptable to consumers, or not technologically feasible. Philip Morris maintained that Marlboro cigarettes were not unreasonably dangerous to Laramie because Laramie understood the risks of smoking. Reports linking smoking to cancer

had been published in the 1950s and 1960s, and people had recognized that tobacco was addictive "going back almost [one hundred] years." Moreover, there was testimony that every pack of Marlboro cigarettes sold between 1970 and 1984 contained a warning label from the Surgeon General that "cigarette smoking is dangerous to your health," and that every pack sold thereafter contained one of four warning labels that are still in use. Cigarette advertisements also were banned from television and radio beginning in January 1971, when Laramie was thirteen or fourteen years old. In addition, since January 1972, every print advertisement for cigarettes has been required to include a warning label similar to those on cigarette packs. In sum, based on this evidence, Philip Morris argued that Laramie caused his own death because, despite being adequately informed of the health risks of smoking, Laramie chose to smoke, and then chose not to quit smoking.

The jury found for the plaintiff on the breach of warranty claim and awarded her $11 million in compensatory damages and $10 million in punitive damages. After Philip Morris's motion for a new trial was denied, it appealed to the Appeals Court, and we transferred the case to this court on our own motion.

2. Discussion. Philip Morris argues that the plaintiff is barred from recovering punitive damages because of the prior action resulting in the 1998 settlement agreement between it and the Attorney General. Philip Morris also contends that a new trial is required due to two evidentiary rulings, an asserted error in the jury instructions, and several alleged improper statements in the plaintiff's closing argument. We address each argument in turn.

a. The prior action and the 1998 settlement. In 1995, the Attorney General, "on behalf of the Commonwealth of Massachusetts including without limitation its Division of Medical Assistance," sued Philip Morris and other manufacturers of tobacco products, and certain tobacco research institutes. The Attorney General argued that the companies successfully had conspired to "mislead, deceive and confuse" the Commonwealth and its citizens regarding the health risks of smoking and the addictive qualities of nicotine. The Attorney General asserted multiple causes of action arising from this conspiracy, including fraud, breach of warranty, and violations of the consumer protection act, G. L. c. 93A. The Attorney General sought to recover the "millions of dollars" in costs the Commonwealth had to spend each year to "provide medical and related services for Massachusetts citizens suffering from diseases caused by cigarette smoking," and also sought declaratory and equitable relief, civil penalties under G. L. c. 93A, § 4, and treble damages under G. L. c. 93A, § 9. The complaint asserted that the Attorney General had reason to believe that proceedings under G. L. c. 93A, § 4, would be in the public interest.

Around the same time, all fifty States, the District of Columbia, and five territories brought similar claims against Philip Morris and other manufacturers of tobacco products. See Lopes v. Commonwealth, 442 Mass. 170, 174, 811 N.E.2d 501 (2004). In 1998, most of those jurisdictions, including the Commonwealth, entered into a master settlement agreement with the companies.

In exchange for monetary and injunctive relief,⁵ the settling States released the companies from liability for all "Released Claims" of "Releasing Parties." The agreement defined "Released Claims" as "Claims" for "past conduct ... in any way related ... to (A) the use, sale, distribution, manufacture, development, advertising, marketing or health effects of, (B) the exposure to, or (C) research, statements, or warnings regarding Tobacco Products." In turn, "Claims" was defined as "liabilities of any nature including civil penalties and punitive damages ... accrued or unaccrued, whether legal, equitable, or statutory." The agreement defined "Releasing Parties" to include "each Settling State" as well as, inter alia, "persons or entities acting in a...