Private: Guest Blogger: Punitive Damages Serve the Public Health Interest

By Mark Gottlieb, Tobacco Control Resource Center, on behalf of the Tobacco Control Legal Consortium
editor's note:the following is the fourth in a five part series on Philip Morris v. Williams.
Punitive damages can serve an important public health purpose by punishing tortuous conduct that harms many people only if such damages are sufficient to induce behavioral change by the defendant or deter similar conduct by others. The United States Supreme Court was "reluctant to identify concrete constitutional limits on the ratio between harm, or potential harm, to the plaintiff and the punitive damages award," when it last ruled on the constitutional limits of punitive damages. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 424-25 (2003). As a result, in very limited circumstances, where a defendant's conduct is extremely reprehensible and causes significant physical injury or death, a greater than single digit ratio of punitive to compensatory damages may be permissible.

Verdicts involving cigarette manufacturers are leading candidates to be that rare exception where such higher ratios are permissible because: a) the conduct underlying the tort will have been found to be extremely reprehensible; b) the conduct will have resulted in significant physical harm; and c) the defendants have long engaged in a campaign of extremely aggressive litigation tactics designed to deter plaintiffs from ever reaching the courtroom. Such conduct can be regarded as "secondary reprehensibility." It prevents non-parties suffering nearly identical injuries arising out of the same primarily reprehensible conduct that triggered the award of punitive damages from utilizing the civil justice system. See Sara D. Guardino & Richard A. Daynard, Punishing Tobacco Industry Misconduct: The Case for Exceeding a Single Digit Ratio Between Punitive and Compensatory Damages, 67 U. Pitt. L. Rev. 1 (2005). Secondary reprehensibility is not a factor that would contribute to the jury's determination of compensatory damages or even help to determine whether punitive damages are appropriate. A secondary reprehensibility analysis should be an essential part of the review of a punitive damages award in those instances where the defendant's wealth has been used strategically to deter litigation
In a post-State Farm Seventh Circuit decision, Mathias v. Accor Econ. Lodging, Inc. ("Mathias"), noted judge Richard A. Posner authored a decision holding that a defendant who uses wealth to make litigating a case against it extraordinarily difficult, if not impossible, may warrant a punitive damages award exceeding a single-digit ratio between punitive and compensatory damages. Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672 (7th Cir. 2003). It is precisely this sort of defendant behavior that is contemplated in the secondary reprehensibility framework. Based on Judge Posner's ruling in Mathias, whether and how the defendant used its wealth to prevent potential plaintiffs' claims from ever reaching a jury should be a factor in determining whether a particular punitive damages award threatens a defendant's constitutional rights.
Documents produced in cigarette litigation demonstrate that cigarette manufacturers engage systematically in "scorched earth" litigation tactics and use their enormous financial advantage over plaintiffs to game the civil justice system to their advantage. Such behavior effectively denies access to the courts for the overwhelming majority of potential plaintiffs.
Hallmarks of the cigarette manufacturers' scorched earth strategy include: 1) never settling cases involving injured smokers; 2) extreme investigation tactics designed to intimidate; 3) destruction of documents and other discovery abuses; and 4) filing of an unusually high number of motions to attain a tactical advantage. For each of these strategies, there exists strong evidence in internal company documents that explains what these tactics are, how they are done, and why they are an important part of an overall litigation strategy.
Such aggressive litigation tactics should be a factor for consideration in any analysis of the amount of punitive damages awarded. Secondary reprehensibility is important for courts to recognize because it permits punitive damages to achieve the dual goals of punishment and deterrence for defendants that not only exhibit extremely reprehensible behavior that causes bodily injury and death, but also take advantage of their vast wealth to use the civil justice system in such a way as to prevent potential plaintiffs from ever reaching the courtroom. When such parties are finally held liable, a high punitive damages award is needed to punish and deter both primarily and secondarily reprehensible conduct adequately. The harm to these deterred potential plaintiff non-parties should be considered when reviewing the appropriateness of punitive damages awards involving defendants that have utilized such tactics.