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Eleventh Circuit Court of Appeals affirms $20.7 punitive damages award against Philip Morris, USA, Inc., in Engle-progeny tobacco case

On January 19, 2021, in Cote v. Philip Morris USA, Inc., No. 19-14074, the Eleventh Circuit Court of Appeals ruled that a $20.7 million punitive damages award in an Engle-progeny tobacco case against the defendant, Philip Morris, USA, Inc., was not constitutionally excessive under the due process clause.  Citing Action Marine, Inc. v. Continental Carbon Inc., 481 F.3d 1302, 1318 (11th Cir. 2007). the Eleventh Circuit noted that it considers three “guideposts” in determining whether a punitive damages award is unconstitutionally excessive: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the ratio of the punitive damages award to the actual or potential harm suffered by the plaintiff; and (3) the difference between the punitive damages award and the civil penalties authorized or imposed in comparable cases.  Regarding the “reprehensibility” guidepost, the Court observed that it looks to five factors: (1) whether the harm caused was physical as opposed to economic; (2) whether the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; (3) whether the target of the conduct had financial vulnerability; (4) whether “the conduct involved repeated actions or was an isolated incident; and (5) whether the harm was the result of intentional malice, trickery, or deceit, or mere accident.  The Court found that all but the third of the five factors were present in this case.  Regarding the ratio of the damages award to the actual or potential harm suffered by the plaintiff, the Court noted that the $20.7 million punitive damages award was only 3.3 times larger than the $6.26 compensatory damages award and this was well within the range of ratios that have been considered constitutionally permissible in previous cases (“single-digit multipliers are more likely to comport with due process”).    Regarding the final guidepost, the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases, the Court cited the Florida Supreme Court’s decision in another Engle-progeny tobacco case, Schoeff v. R.J. Reynolds Tobacco Co., 232 So. 3d 294, 308 (Fla. 2017), which recognized that in “comparable cases, the civil penalty is often three times the compensatory award.”

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