Smith v. Brown & Williamson Tobacco Corp.

• Decision Date: 29 October 2013
• Docket Number: No. SC 92961.,SC 92961.
• Citation: 410 S.W.3d 623
• Parties: Lincoln SMITH, et al., Appellants–Respondents, v. BROWN & WILLIAMSON TOBACCO CORPORATION, Respondent–Appellant.
• Court: Missouri Supreme Court

410 S.W.3d 623

Lincoln SMITH, et al., Appellants–Respondents,

v.BROWN & WILLIAMSON TOBACCO CORPORATION, Respondent–Appellant.

No. SC 92961.

Supreme Court of Missouri,

En Banc.

Sept. 10, 2013.

Rehearing Denied Oct. 29, 2013.

Kenneth B. McClain and Scott B. Hall of Humphrey, Farrington & McClain in Independence, and Susan Ford Robertson and J. Zachary Bickel of The Robertson Law Group, Kansas City, for The Smith.

Jeffrey S. Bucholtz of King & Spalding, Washington, D.C., Bruce D. Ryder of Thompson Coburn LLP, St. Louis, and William L. Durham II of King & Spalding, Atlanta, for Brown & Williamson.

ZEL M. FISCHER, Judge.

The survivors of Barbara Smith (“the Smiths”) appeal from a judgment, entered following remand from the court of appeals for retrial solely on the issue of punitive damages,¹ finding Brown & Williamson TobaccoCorporation (“B & W”) liable for punitive damages and awarding the Smiths $1.5 million. The Smiths contend that certain evidence admitted by the circuit court was outside the scope of the court of appeals' prior mandate, and the circuit court erred in overruling their motion for new trial on the grounds of juror nondisclosure. B & W cross-appeals contending that the Smiths failed to make a submissible case for punitive damages. This Court ordered transfer after opinion of the court of appeals and, therefore, has jurisdiction. Mo. Const. art. V, sec. 10. The judgment of the circuit court is affirmed.

Factual Background

Mrs. Smith was born May 13, 1927. In 1944, Mrs. Smith began smoking Kool cigarettes, which were manufactured by B & W. In the early 1980s, Mrs. Smith developed angina. In 1990, a physician informed Mrs. Smith that she had “respiratory trouble” that was the beginning stage of emphysema. After the doctor told her that she was “going to have to quit smoking because it was going to kill her if she didn't,” Mrs. Smith quit smoking within the year. Mrs. Smith was diagnosed with lung cancer in 1992. Part of one lung was removed, and Mrs. Smith was apparently cancer free thereafter. On May 12, 2000, Mrs. Smith died from a heart attack at age 73.

In March 2003, Mrs. Smith's survivors sued B & W in Jackson County under the Missouri wrongful death act, § 537.080, RSMo 2000. They asserted claims for negligent design, negligent failure to warn, strict liability product defect, fraudulent concealment, and conspiracy.

Because the Smiths sought an award of punitive damages, trial was bifurcated pursuant to § 510.263, RSMo Supp.2012. In the first stage of trial, the jury returned a verdict for B & W on the fraudulent concealment and conspiracy claims but returned a verdict in favor of the Smiths on the negligent design, negligent failure to warn, and strict liability product defect claims, awarding $2 million in compensatory damages. The jury further found that Mrs. Smith was 75% at fault; accordingly, the trial court reduced the compensatory damages to $500,000. Also in the first stage of trial, the jury found B & W liable for damages for “aggravating circumstances.” In the second stage of trial, the jury assessed $20 million in punitive damages. B & W timely appealed from that judgment.

On appeal, the court of appeals affirmed the compensatory damages awarded against B & W on the Smiths' claims for negligent design, negligent failure to warn, and strict product liability. However, it held that, of the three claims upon which the jury returned a verdict in favor of the Smiths, the plaintiffs made a submissible case for punitive damages only on the strict liability product defect claim. Smith v. Brown & Williamson Tobacco Corp., 275 S.W.3d 748, 823 (Mo.App.2008) [hereinafter Smith I ]. Because the verdict did not reflect what portion of the punitive damages were related to that claim, the court of appeals reversed the $20 million punitive damages award against B & W and remanded the case for a new jury trial “on the punitive damages as to the strict liability product defect claim only.” Id.

On remand, the circuit court determined that the issue of punitive damages on the strict liability product defect claim again would be bifurcated. In the first stage, the jury was to determine if punitive damages were warranted on that claim and, if so, in the second stage, they would assess the amount of the award. The circuit court ruled that the evidence in the first stage of the retrial would be limited to that presented in the original trial. Neither party raises any issue on appeal concerning this evidentiary ruling. However, the circuit court ruled that the parties could present new evidence during the second stage of retrial.

The case was retried, and in the first stage, the jury found B & W liable for punitive damages on the strict liability product defect claim. During the second stage, B & W presented evidence that any punitive damages award would be paid by R.J. Reynolds Tobacco Company, which had acquired the right to manufacture Kools subsequent to the filing of the suit, and argued that R.J. Reynolds did not deserve to be punished with punitive damages. Following the second stage, the jury returned a verdict awarding the Smiths $1.5 million in punitive damages.

B & W Cross–Appeal

Both of B & W's claims on cross-appeal challenge the circuit court's overruling of its motion for judgment notwithstanding the verdict. B & W claims that the Smiths failed to make a submissible case for punitive damages for strict liability product defect and that the Smiths failed to make a submissible case because their claims are preempted by federal law.

Standard of Review

When reviewing a circuit court's denial of a judgment notwithstanding the verdict, “[t]his Court must determine whether the plaintiff presented a submissible case by offering evidence to support every element necessary for liability.” Fleshner v. Pepose Vision Institute, P.C., 304 S.W.3d 81, 95 (Mo. banc 2010). “Evidence is viewed in the light most favorable to the jury's verdict, giving the plaintiff all reasonable inferences and disregarding all conflicting evidence and inferences.” Id. “This Court will reverse the jury's verdict for insufficient evidence only where there is a complete absence of probative fact to support the jury's conclusion.” Dhyne v. State Farm Fire & Cas. Co., 188 S.W.3d 454, 457 (Mo. banc 2006).

Submissible Case for Punitive Damages for Strict Liability

In its first point on cross-appeal, B & W contends that the circuit court erred in failing to grant a judgment notwithstanding the verdict because the Smiths failed to make a submissible case for punitive damages for strict liability product defect. B & W claims that the Smiths failed to present clear and convincing evidence of aggravating circumstances related to the conduct for which the jury in the original trial found B & W liable for compensatory damages.²

“A submissible case for punitive damages requires clear and convincing proof that the defendant intentionally acted either by a wanton, willful or outrageous act, or reckless disregard for an act's consequences (from which evil motive is inferred).” Howard v. City of Kansas City, 332 S.W.3d 772, 788 (Mo. banc 2011)(internal quotation marks omitted). Specific to their claim for punitive damages on their strict liability product defect claim, the Smiths had to present clear and convincing evidence that B & W “knew of the defect and danger of the product and, by selling the product, showed complete indifference to or conscious disregard for the safety of others.” Kansas City v. Keene Corp., 855 S.W.2d 360, 374 (Mo. banc 1993); see also Howard, 332 S.W.3d at 786–88;Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 109–11 (Mo. banc 1996).

In the appeal from the original trial, the court of appeals examined the evidence “to determine whether, as a matter of law, it was sufficient to submit the claim for punitive damages.” Smith I at 811. It held that the evidence presented at the original trial was sufficient to support a punitive damages award on the strict liability product defect claim. Id. at 823. Accordingly, there was “sufficient evidence of conduct tantamount to intentional wrongdoing to submit the issue [of punitive damages] to the jury.” Id.

B & W has failed to indicate how the evidence presented in the first stage of the trial on remand differed significantly from that presented in the original trial. On remand, the circuit court limited the evidence presented in the first stage of the retrial to evidence that had been presented in the original trial, and the evidence admitted at retrial was almost identical to the original trial. In both trials, Dr. David Burns and Dr. Jeffrey Wigand testified extensively about the defects and dangers inherent in Kool cigarettes.

Dr. Burns testified about B & W's knowledge and conduct regarding the design, manufacture, advertising, and public position it took on the denial that its cigarettes are addictive or cause disease. He explained to the jury that B & W's knowledge of the dangerous and addictive qualities of its cigarettes, and its conduct in light of that knowledge, was “one of the largest public health frauds that occurred in the last half century.” Dr. Burns stated that B & W's conduct:

is a very clear example of a tobacco company attempting to sell its products to someone who is already sick, and that product is going to add further harm to that individual who is already sick. So it's a conscious and deliberate effort to increase profits at the expense and injury of the individual who responds to this message.

Dr. Wigand testified that, while he worked at B & W, the company president's favorite saying was “hook'em young, hook'em for life” in reference to nicotine addiction. Dr. Wigand stated that B & W trained him not to write anything down that potentially could be used in litigation, and that an attorney followed him around so that his conversations could be considered privileged. He said that minutes from meetings were changed to remove any...