Henry W. Boerner v. Brown & Williamson ( 2005 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 03-3557
___________
Henry W. Boerner, Individually *
and as Administrator of the Estate of *
Mary Jane Boerner, Deceased, *
*
Appellee, * Appeal from the United States
* District Court for the
v. * Eastern District of Arkansas.
*
Brown & Williamson Tobacco *
Company, *
*
Appellant. *
___________
Submitted: April 12, 2004
Filed: January 7, 2005
___________
Before WOLLMAN, HANSEN, and BYE, Circuit Judges.
___________
WOLLMAN, Circuit Judge.
Brown & Williamson Tobacco Company (B&W) appeals from the judgment
entered by the district court1 on the jury’s verdict in favor of Henry W. Boerner
(Boerner) on his design defect claim. We affirm, conditioned on Boerner’s
1
The Honorable James M. Moody, United States District Judge for the Eastern
District of Arkansas.
acceptance of the remittitur ordered on the punitive damages portion of the jury’s
award.
I.
Lung cancer was identified in the 1930s and its incidence rose sharply in that
same decade. In 1941, Drs. Alton Oschner and Michael DeBakey published
“Carcinoma of the Lung” in Archives of Surgery. The article noted the parallel rise
in smoking and lung cancer, concluding that the latter was due mostly to the former,
and included a lengthy bibliography of sources from multiple countries. In response,
Edward Harlow, a chemist at the American Tobacco Company, circulated an internal
memorandum. Referring to research funded or conducted by American Tobacco,
Harlow predicted that impartial research would vindicate cigarettes but that “this
would never be suspected by reading the extensive medical literature on tobacco.”
He also noted that the “medical profession is the group which it is most desired to
reach and convince” and that the “tobacco industry is very much in need of some
friendly research in this field.” Plaintiff-Appellee’s Ex. 19 at E-1 to E-2.
Ernest Wynder, while in his second year of medical school, began conducting
surveys of cancer patients in 1947. Dr. Evarts Graham, the head of the surgery
department at Washington University School of Medicine in St. Louis and the first
person to successfully remove a whole lung from a human being, granted Wynder
access to his wards in order to gather more data the following year. The Journal of
the American Medical Association published Wynder’s survey data in 1950.
Wynder’s compilations of case after case among a variety of groups showed that lung
cancer was extremely rare in non or minimal smokers. He had also begun laboratory
studies on mice that tended to support the linkage.
Wynder continued his research at the Sloan-Kettering Institute, a leading
private center for cancer research in New York. American Tobacco, also based in
New York, contributed funds to Sloan-Kettering through the Damon Runyan fund
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and sought to intervene. Recalling the events at a meeting of these two groups, Mr.
Hiram Hanmer, the Research Director at American Tobacco, explained how he “told
them we were disturbed about some of the activities” of Drs. Wynder and Graham.
Dr. Rhoads of Sloan-Kettering replied that Dr. Wynder’s work and publications could
be controlled, but not his activities outside of work.
In the early 1950s, numerous studies agreed on the linkage and were widely
disseminated in the press. A forward-looking study by Dr. E. Cuyler Hammond of
the American Cancer Society surveyed the smoking habits of 187,000 people and
then monitored their health. It obtained similar results in 1954 and 1957: the
incidence of lung cancer was approximately 2000% higher among two-plus pack a
day smokers as compared to nonsmokers. Critics alleged researcher bias, arguing that
a linkage could be shown only by taking two groups of people and forcing one to
smoke and the other to abstain. Dr. Wynder replied as follows: “There are fields of
human endeavor in which facts can be suppressed and at times submerged forever.
Not so, however, in science . . . If one negates the value of statistics as part of
scientific proof . . . and sets a goal for acceptable proof that is based upon impossible
conditions, the very aim to resolve a given issue is paralyzed.” An Appraisal of the
Smoking-Lung-Cancer Issue, New Eng. J. Med. 1235 (June 15, 1961). In 1962,
President Kennedy inquired into the linkage, leading to a finding by the Surgeon
General that smoking was related to lung cancer, at least in men. In 1965, the
Federal Cigarette Labeling and Advertising Act was passed, branding cigarette boxes
with the words “Caution: Cigarette Smoking May be Hazardous to Your Health.”
Pub. L. No. 89-92, 79 Stat. 282, at § 4 (codified as amended at 15 U.S.C. §§
133–1340 (2004)).
Mary Jane Boerner (Mrs. Boerner) began smoking in 1945 at the age of 15.
But for a short initial period during which she smoked Lucky Strike cigarettes, she
smoked only Pall Mall brand cigarettes until she quit smoking in 1981. In 1996, she
developed lung cancer. In June of 1998, she and Boerner, her husband, filed this
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lawsuit against B&W—the successor entity of American Tobacco, which was the
manufacturer of the Pall Mall brand—alleging claims of failure to warn, design
defect, violation of a voluntarily undertaken duty, fraud, and conspiracy to commit
fraud. Following Mrs. Boerner’s death in August 1999, the complaint was amended
to include a wrongful death claim.
The district court granted B&W’s motion for summary judgment as to all of the
claims. On appeal, we affirmed in part, reversed in part, and remanded the design
defect and pre-1969 failure to warn claims for trial. Boerner v. Brown & Williamson
Tobacco Co., 260 F.3d 837 (8th Cir. 2001). On remand, B&W moved for judgment
as a matter of law at the close of Boerner’s case in chief. The district court denied the
motion with respect to the failure to warn claim and reserved its decision on the
design defect claim pending the jury’s verdict. The jury found that the defective
condition of Pall Mall cigarettes proximately caused Mrs. Boerner’s illness and death,
as well as the resulting injuries to Henry Boerner, and awarded $4,025,000 in
compensatory damages and $15 million in punitive damages. The jury found for
B&W on the pre-1969 failure to warn claim. The district court initially granted
B&W’s motion for judgment as a matter of law on the award of punitive damages, but
reversed itself on reconsideration and reinstated the full jury award. B&W now raises
four issues for our review on appeal.
II.
We consider first B&W’s contention that the district court improperly refused
to grant its motions for judgment as a matter of law and for new trial. We review de
novo the district court’s denial of a motion for judgment as a matter of law, viewing
the evidence in the light most favorable to the prevailing party and making all
reasonable inferences in favor of the jury’s verdict. Douglas County Bank & Trust
Co. v. United Financial Inc., 207 F.3d 473, 477 (8th Cir. 2000). We review for abuse
of discretion the denial of a motion for new trial. Id.
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To succeed on a design defect claim under Arkansas law, the plaintiff must
establish that the product was in a defective condition, that the defective condition
rendered the product unreasonably dangerous, and that the defect proximately caused
the complained-of injury. Ark. Code Ann. § 4-86-102; Boerner I, 260 F.3d at 841.
A product is unreasonably dangerous when it is dangerous “to an extent beyond that
which would be contemplated by the ordinary and reasonable buyer, consumer, or
user.” Ark. Code. Ann. § 16-116-102(7); Boerner I, 260 F.3d at 841.
B&W offers two bases for reversal of the district court’s denial of its motions.
First, B&W contends that it was entitled to judgment as a matter of law because
Boerner failed to present any evidence establishing the defective condition of Pall
Mall cigarettes specifically, making instead only a categorical attack on cigarettes
generally.
We conclude that there was sufficient evidence adduced at trial to support the
jury’s verdict on the design defect claim. Some evidence not specific to Pall Mall
was indeed presented: cigarettes contain nicotine, which is addictive; cigarettes
contain carcinogens; carcinogens are the causal link between smoking and cancer;
and historically the average smoker did not fully appreciate the nature or severity of
the health risks associated with smoking. There was also significant expert
testimony, however, that related specifically to Mrs. Boerner’s case and the Pall Mall
brand. Dr. Peter Marvin, Mrs. Boerner’s treating physician, testified that she died
from the effects of cigarette smoke, and Dr. Marvin Blinder testified that she was
addicted to Pall Mall cigarettes because of their nicotine content, which resulted in
her cancer. Additionally, other evidence indicated that Pall Mall cigarettes had higher
levels of carcinogenic tar than any other brand and that reduction of tar intake by
smoking low tar cigarettes could have reduced the health risks associated with
smoking. Similarly, the evidence indicated that Pall Mall cigarettes lacked effective
filter technology, which would have reduced the level of carcinogenic tar inhaled into
the lungs. Indeed, there was evidence that Pall Mall cigarettes utilized a “tobacco
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filter” that actually increased the amount of tar taken into the body. Finally, Mrs.
Boerner stated in her deposition testimony that she did not fully appreciate the extent
of the potential health risks associated with smoking. This evidence was sufficient
to provide a reasonable basis for the following findings by the jury: Pall Mall
cigarettes were in a defective condition due to faulty design; the faulty design resulted
in excessively high levels of carcinogens being introduced into Mrs. Boerner’s lungs;
the defective condition yielded the Paul Mall cigarettes unreasonably dangerous; and
the defective condition proximately caused Mrs. Boerner’s illness and death.
Accordingly, we reject B&W’s contention that Boerner’s evidence constituted only
a non-specific, categorical attack on cigarettes.
Next, B&W argues that it is entitled to judgment because, as a matter of law,
Pall Mall cigarettes could not be unreasonably dangerous following the 1969
enactment of the Federal Cigarette Labeling and Advertising Act (Labeling Act), 15
U.S.C. § 1331 et seq. (as currently codified). B&W contends that the Labeling Act
established the standard for notice to consumers of the dangerousness of cigarettes,
with the result that any finding that a cigarette’s dangerousness exceeded the required
warning would be preempted by the Act. Once Congress has regulated aspects of the
design, manufacture, or sale of a product, the doctrine of conflict preemption,
including implied preemption, forecloses claims premised on such regulated aspects.
Where there is an actual conflict between a state law cause of action and Congress’s
express policy, state law must give way under the Supremacy Clause. Geier v.
American Honda Motor Car, Inc., 529 U.S. 861 (2000) (holding that a design defect
claim based solely on a car’s lack of an air bag was preempted because Congress
provided manufacturers with the option of installing air bags or other passive safety
devices). Boerner argues that the doctrine is inapplicable here because Congress has
expressed an intent through the Labeling Act to preempt only those state law claims
related to advertising or promotion and not those based upon design defects.
Cipollone v. Liggett Group, Inc., 505 U.S. 502 (1992).
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“We do not lightly deem state law to be superseded by federal law due to our
solicitude for the states’ exercise of their traditional police powers.” Jones v. Vilsack,
272 F.3d 1030, 1033 (8th Cir. 2001) (citing Cipollone, 505 U.S. at 516).
Congressional intent is the “ultimate touchstone” of the preemption inquiry. Id.
(quoting Cipollone, 505 U.S. at 516). The clearest expression of congressional intent
applicable here is a preemption clause included in the Labeling Act. 15 U.S.C. §
1334(b);2 Jones, 272 F.3d at 1034. The language of the Labeling Act makes it clear
that Congress intended to preempt only smoking-related laws “concerning the
advertising or promotion of cigarettes.” Jones, 272 F.3d at 1034. The statute is silent
on the question of preemption of other state law causes of action. Because
“Congress’ enactment of a provision defining the preemptive reach of a statute
implies that matters beyond that reach are not pre-empted,” Cipollone, 505 U.S. at
517, we conclude that the doctrine of conflict preemption is inapposite in this case
and that Boerner’s claims are not foreclosed. Cf. Nat’l Bank of Commerce v. Dow
Chemical Co., 165 F.3d 602 (8th Cir. 1999) (holding that federal labeling legislation
does not preclude the possibility that a defect may occur in a particular product
resulting in liability).
III.
We turn next to B&W’s contention that the district court erroneously admitted
four reports of the Surgeon General pursuant to the public records exception to the
hearsay rule, Fed. R. Evid. 803(8).3 B&W maintains that the reports were
2
Section 1334(b) provides, in pertinent part, that “[n]o requirement or
prohibition based on smoking and health shall be imposed under State law with
respect to the advertising or promotion of any cigarettes the packages of which are
labeled in conformity with the provisions of this chapter.”
3
The reports in question are: Smoking and Health, a Report of the Surgeon
General, DHEW Pub. No. (PHS) 79-50066 (1979); The Health Consequences of
Smoking, Nicotine Addiction, a Report of the Surgeon General, DHHS Pub. No.
(CDC) 88-8406 (1988); Reducing the Health Consequences of Smoking, 25 Years of
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inadmissible because their conclusions were not based on the independent
investigation of a federal agency. In the alternative, B&W contends that the reports
should have been ruled inadmissible under Fed. R. Evid. 403 because they were based
on information that was not specific to the Pall Mall brand or to Mrs. Boerner’s
particular illness, and because B&W had no opportunity to cross-examine the reports’
authors.
We review for abuse of discretion a district court’s decision to admit evidence,
Bergfeld v. Unimin Corp., 319 F.3d 350, 355 (8th Cir. 2003), and we conclude that
the reports were properly admitted under the public records exception, inasmuch as
they were prepared pursuant to a legal obligation. For instance, the 1989 Report was
prepared in response to Congress’s charge in Public Law 91-222 “to report new and
current information on smoking and health to the U.S. Congress.” The reports also
include factual findings, although these were made by independent scientists and not
on the basis of independent research by the Surgeon General. We have held,
however, that similar reports based on non-agency research were properly admitted
under the public records exception. See, e.g., Kehm v. Proctor & Gamble Mfg. Co.,
724 F.2d 613 (8th Cir. 1983); see also Jones, 272 F.3d at 1035 (assuming the
admissibility of a Report of the Surgeon General entitled “Preventing Tobacco Use
Amongst Young People”). Once the evaluative report is shown to have been required
by law and to have included factual findings, the burden is on the party opposing
admission to demonstrate untrustworthiness. Kehm, 724 F.2d at 618. As to
trustworthiness, we noted in Kehm that the author’s unavailability for cross-
examination does not render the report inadmissable, for the fact that a report was
prepared by a disinterested governmental agency pursuant to a legal obligation
constitutes a badge of trustworthiness. Id. B&W has made no affirmative showing
Progress, a Report of the Surgeon General, DHHS Pub. No. (CDC) 89-8411 (1989);
and Women and Smoking, a Report of the Surgeon General, DHHS Pub. No. (CDC)
01-6817 (2001).
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that the reports are untrustworthy. The reports are final and thus are distinguishable
from those at issue in a number of cases cited by B&W. See, e.g., Brown v. Sierra
Nevada Memorial Miners Hospital, 849 F.2d 1186 (9th Cir. 1988).
IV.
We turn to B&W’s challenge to the district court’s award of punitive damages.
B&W proposes four bases for reversal of the award. First, B&W challenges the
sufficiency of the evidence to warrant a punitive damages charge. We review de
novo the district court’s decision to instruct the jury on punitive damages. Carpenter
v. Auto. Club Interinsurance Exch., 58 F.3d 1296, 1304 (8th Cir. 1995). Such a
charge should not be submitted to the jury unless there is “substantial evidence”
supporting the claim that the conduct was “malicious or done with the deliberate
intent to injure another,” Ellis v. Price, 990 S.W.2d 543, 548 (Ark. 1999), or was
done with a “wanton and conscious disregard for the rights and safety of others.”
Dalrymple v. Fields, 633 S.W.2d 362, 363 (Ark. 1982). There was ample evidence
adduced at trial to show that American Tobacco was aware, as early as the 1950s and
1960s, that cigarette smoke contained carcinogens, that cigarette smoke contained
nicotine, that the risk of cancer increased with the amount exposure to carcinogens,
that the risk of cancer could be reduced by the use of effective filter technology, and
that nicotine addiction increased the likelihood of increased exposure to carcinogens.
Despite this knowledge, the evidence indicates that American Tobacco
manufactured, marketed, and sold Pall Mall cigarettes containing excessively high
levels of carcinogenic tar and lacking effective filter technology, for and in the state
of Arkansas; untruthfully represented that Pall Mall cigarettes were not unhealthy;
untruthfully represented that cigarette smoking did not cause cancer; and actively
attempted to suppress research into the harmful health consequences of cigarette
smoking. The jury could reasonably have determined, based on this evidence and all
reasonable inferences drawn therefrom, that American Tobacco acted with a
conscious disregard for the safety of others. Accordingly, the district court did not
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err in finding that the evidence justified submitting the punitive damages claim to the
jury.
Second, B&W argues that it should not be liable for American Tobacco’s
conduct. Arkansas law, however, provides that the successor entity after a merger
takes on all the liabilities of the predecessor companies. Ark. Code Ann. § 4-26-
1005(b)(6).
Third, B&W contends that a punitive damages award in this case would not
advance the policy objectives underlying the rule allowing for punitive damages and
is therefore inappropriate. To support this contention, B&W argues as follows: the
purpose of punitive damages is to punish the wrongdoer; the wrongdoer no longer
exists in this case and no individuals who were in leadership positions at American
Tobacco are in similar positions at B&W; and, accordingly, that there is no
wrongdoer to punish. We are not persuaded. Punishment is only one of the policies
underlying punitive damages. Deterrence is another. See State Farm Mut. Auto. Ins.
Co. v. Campbell, 538 U.S. 408, 416 (2003) (“[P]unitive damages serve a broader
function [than compensatory damages]; they are aimed at deterrence and
retribution”); BMW of North America, Inc. v. Gore, 517 U.S. 559, 568 (1996)
(“Punitive damages may properly be imposed to further a State’s legitimate interests
in punishing unlawful conduct and deterring its repetition”). Under Arkansas law,
a punitive damages award serves not only to “‘deter similar conduct on the part of the
particular tortfeasor,’” but also “‘others who might be inclined to engage in such
conduct.’” Robertson Oil Co. v. Phillips Petroleum Co., 14 F.3d 373, 378 (8th
Cir.1993) (en banc) (quoting Ray Dodge, Inc. v. Moore, 479 S.W.2d 518, 523 (Ark.
1972)). Because B&W and other companies similar to it are still in the business of
making and selling cigarettes, there is deterrent value in the punitive damages award.
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Fourth, B&W argues that the amount of the award is excessive and therefore
violative of state law and federal due process guarantees. Under Arkansas law, the
question is whether the award “is so great as to shock the conscience of this court or
to demonstrate passion or prejudice on the part of the trier of fact.” Routh Wrecker
Service, Inc. v. Washington, 980 S.W.2d 240, 244 (Ark. 1998). Because the
Arkansas courts employ the United States Supreme Court’s due process analysis, we
conflate both state and federal review. Stogsdill v. Healthmark Partners, L.L.C., 377
F.3d 827, 832 (8th Cir. 2004).
The Supreme Court has provided three guideposts for due process review of
the amount of a punitive damages award: (1) the degree of reprehensibility of the
defendant’s conduct; (2) the disparity between actual or potential harm suffered and
the punitive damages award (often stated as a ratio between the amount of the
compensatory damages award and the punitive damages award); and (3) the
difference between the punitive damages award and the civil penalties authorized in
comparable cases. Gore, 517 U.S. at 574-75. B&W argues that there is no evidence
of reprehensibility, that the award does not bear a reasonable relationship to the
compensatory damages, and that the $15 million award is vastly greater than the
possible $10,000 penalty for a violation of the Labeling Act. Boerner responds that
B&W’s conduct was particularly reprehensible: it resulted in physical harm; evinced
indifference to the health and safety of others; involved repeated incidents; and was
the result of deceit (illustrated by American Tobacco’s efforts to stifle anti-tobacco
research and publication as well as its officers’ practice of making public statements
contending that smoking was not a health risk). Second, he argues that the ratio–less
than 4 to 1–is well within the acceptable range established by the Supreme Court.
Third, Boerner argues that the Labeling Act’s penalty provision is inapplicable
because the jury did not base its award on a failure to warn. He instead cites as a
more apt comparison the potential financial consequences of an injunction barring
further sale of the defective product.
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The degree of reprehensibility is the “‘most important indicium of the
reasonableness of a punitive damages award.’” State Farm, 538 U.S. at 419 (quoting
Gore, 517 U.S. at 575). The evidence at trial indicated that American Tobacco’s
conduct was highly reprehensible: Pall Mall cigarettes were extremely carcinogenic
and extremely addictive—substantially more so than other types of cigarettes; the sale
of this defective product occurred repeatedly over the course of many years despite
American Tobacco’s knowledge that the product was dangerous to the user’s health;
and American Tobacco actively misled consumers about the health risks associated
with smoking. Moreover, the reprehensible conduct was shown to relate directly to
the harm suffered by Mrs. Boerner: a most painful, lingering death following
extensive surgery.
In light of the second Gore guidepost, however, we conclude that the punitive
damages award is excessive when measured against the substantial compensatory
damages award. Though the Supreme Court has been “reluctant to identify concrete
constitutional limits on the ratio between harm . . . to the plaintiff and the punitive
damages award,” id. at 424, it has identified a circumstance in which caution is
required: “When compensatory damages are substantial, then a lesser ratio, perhaps
only equal to compensatory damages, can reach the outermost limit of the due process
guarantee.” Id. at 425. As the Supreme Court noted in Gore, there is no “simple
mathematical formula” that marks the constitutional line. 517 U.S. at 582. See also
State Farm, 538 U.S. at 425 (“[W]e decline again to impose a bright-line ratio which
a punitive damages award cannot exceed”). Notwithstanding the absence of a simple
formula or bright-line ratio, the general contours of our past decisions lead to the
conclusion that a low ratio is called for here. See Williams v. ConAgra Poultry Co.,
378 F.3d 790 (8th Cir. 2004) (remitting the punitive damages award to an amount
equal to the compensatory damages award of $600,000); Stogsdill, 377 F.3d at 834
(approving a ratio of 1:4 compensatory damages to punitive damages as an upper
limit where the compensatory award was $500,000); Morse v. Southern Union Co.,
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174 F.3d 917, 925-26 (8th Cir. 1999) (upholding close to a 1:6 ratio where the
compensatory award was only $70,000).
Factors that justify a higher ratio, such as the presence of an “injury that is hard
to detect” or a “particularly egregious act [that] has resulted in only a small amount
of economic damages,” are absent here. See Gore, 517 U.S. at 582. We also note
that, despite evidence that American Tobacco exhibited a callous disregard for the
adverse health consequences of smoking, there is no evidence that anyone at
American Tobacco intended to victimize its customers. Cf. Eden Electrical, Ltd. v.
Amana Co., 370 F.3d 824, 829 (8th Cir. 2004) (affirming an award of punitive
damages approximately 4.5 times greater than the compensatory damages award
where the defendant had devised a scheme of fraud and evinced an intent to “f***”
and “kill” the plaintiff’s business).
Accordingly, given the $4,025,000 compensatory damages award in this case,
we conclude that a ratio of approximately 1:1 would comport with the requirements
of due process. Thus, we conclude that the punitive damages award must be remitted
from $15 million to $5 million.
V.
Finally, we consider B&W’s argument that the district court’s jury instructions
were erroneous. We review a district court’s decisions on jury instructions for abuse
of discretion, looking to the instructions as a whole to determine whether they fairly
submitted the issues to the jury. Brown v. Sandals Resorts Intern., 284 F.3d 949, 953
(8th Cir. 2002). B&W argues that by failing to instruct the jury that it could consider
only the harm to Mrs. Boerner and B&W’s conduct in Arkansas, the district court
violated the Supreme Court’s requirement in State Farm that a “jury must be
instructed . . . that it may not use evidence of out-of-state conduct to punish a
defendant for action that was lawful in the jurisdiction where it occurred.” 538 U.S.
at 422. We conclude that the district court’s instructions properly limited the jury’s
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inquiry to only those facts relevant to Boerner’s claimed injuries, which had the
practical effect of preventing the jury from punishing B&W for conduct unrelated to
his claims.4 Additionally, there is no indication in the record that B&W’s conduct
would have been lawful elsewhere, so we need not be concerned with the possibility
that B&W was punished for conduct that would have been legal where it occurred.
VI.
We conditionally affirm the judgment entered on the verdict, subject to
Boerner’s acceptance of a remittitur judgment on the punitive damages award in the
amount of $5 million. Absent his acceptance of the remittitur, we reverse and remand
for a new trial on the claim for punitive damages.
BYE, Circuit Judge, concurring in the result.
I concur in affirming the district court with the condition Mr. Boerner accept
a remittitur on the punitive damage award. Because I reach such result on different
grounds, I write separately to explain my position.
I
I disagree with the Court's analysis regarding the excessiveness of this punitive
damage award. In Eden Electrical, Ltd. v. Amana Co., 370 F.3d 824, 829 (8th Cir.
4
Cf. State Farm, 538 U.S. at 422 (“For a more fundamental reason, however,
the Utah courts erred . . . : The Courts awarded punitive damages to punish and deter
conduct that bore no relation to the Campbells’ harm”); ConAgra Poultry, 378 F.3d
790 (concluding that due process had been violated where the district court upheld
a punitive damages award on the basis of evidence of misconduct unrelated to the
particular claim at issue). “In assessing responsibility. . . it is crucial that a court
focus on the conduct related to the plaintiff’s claim rather than the conduct of the
defendant in general.” Id. at 797.
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2004), we affirmed a punitive damage award approximately 4.5 times greater than the
compensatory damage award, despite the substantiality of the latter. To be sure,
Eden's 4.5:1 ratio may crowd constitutional limits. See State Farm Mut. Auto. Ins.
Co. v. Campbell, 538 U.S. 408, 425 (2003) ("When compensatory damages are
substantial, then a lesser ratio, perhaps only equal to compensatory damages, can
reach the outermost limit of the due process guarantee."). But it does not exceed the
single-digit ratio the Supreme Court has intimated as setting the constitutional limit
for all cases, id., save those where "'a particularly egregious act has resulted in only
a small amount of economic damages [or where] the injury is hard to detect or the
monetary value of noneconomic harm may have been difficult to determine,'" id.
(quoting BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 582 (1996)), and we justified
the 4.5:1 ratio in Eden because the case involved an "extraordinarily reprehensible
scheme to defraud." Eden, 370 F.3d at 829.
Here, the ratio between compensatory and punitive damages is less than four
to one, and I have trouble reconciling a reduction in this award with our affirmance
in Eden. The Court distinguishes Eden on the grounds Amana "intended to
victimize" Eden, while American Tobacco merely "exhibited a callous disregard for
the adverse health consequences of smoking." Ante at 13. I find the rationale less
than satisfying. Eden involved purely economic harm. This case not only involves
personal injury rather than economic harm, but personal injury of a very serious
nature – a wrongful death. Thus, while American Tobacco's level of intent may not
be quite as egregious as Amana's (and even that is arguable), the consequence of its
conduct far outweighs any considerations tied to its marginally less culpable state of
mind. We have more reason to be outraged by American Tobacco's callous disregard
for Mary Jane Boerner's life than we would, for example, if it had intentionally
pilfered all her money.
In addition, I am troubled by the Court's incomplete discussion of the factors
justifying a higher ratio between punitive and compensatory damages. It notes the
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absence of two factors – the presence of an injury which is hard to detect, or a
particularly egregious act resulting in only a small amount of economic damages.
Ante at 13. But it fails to discuss the presence of a third, that is, where the monetary
value of noneconomic harm is difficult to determine. Such a factor clearly applies to
suits involving personal injury and wrongful death. See, e.g., Stafford v.
Neurological Med., Inc., 811 F.2d 470, 475 (8th Cir. 1987) (noting deceased's suicide
resulting from misdiagnosis was "an injury not easily calculable in economic terms").
I suggest the presence of this one factor alone brings this award within the
constitutional limits of due process. See Bielicki v. Terminix Int'l Co., 225 F.3d
1159, 1165 (10th Cir. 2000) (approving a 12:1 ratio between punitive and
compensatory damages in a personal injury case); Deters v. Equifax Credit Info.
Servs., Inc., 202 F.3d 1262, 1273 (10th Cir. 2000) (approving a 59:1 ratio between
punitive and compensatory damages in a personal injury case); Burton v. R.J.
Reynolds Tobacco Co., 205 F. Supp. 2d 1253, 1263-65 (D. Kan. 2002) (approving
a 75:1 ratio between punitive and compensatory damages in a personal injury suit
against tobacco company).
Even if this case did not fall within the specific exception the Supreme Court
carved out for cases involving difficult-to-determine noneconomic harm, the mere
fact this case involves physical injury rather than economic harm makes it difficult
to reconcile our remittitur here with our affirmance in Eden. The Supreme Court
listed five factors for the courts to consider when judging the degree of
reprehensibility of a defendant's conduct: 1) whether it caused physical rather than
economic harm; 2) whether it evinced an indifference to or a reckless disregard of the
health or safety of others; 3) whether its target was financially vulnerable; 4) whether
it involved repeated actions rather than an isolated incident; and 5) whether its harm
resulted from intentional malice, trickery or deceit, rather than mere accident. State
Farm, 538 U.S. at 419 (citing Gore, 517 U.S. at 576-77).
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In affirming the 4.5:1 ratio in Eden, we discussed the presence of just one of
those five factors – intentional malice. See Eden, 370 F.3d at 829. Yet despite the
presence of several of the five factors in this case – physical harm, callous disregard
to the health and safety of others, repeated incidents of wrongful conduct spanning
decades, and calculated deceit – we remit. In sum, I find no principled basis for
concluding this award is excessive when compared with our affirmance of the
punitive damage award in Eden.
II
Despite my reluctance to agree with the Court's application of State Farm and
Gore, and its distinction of Eden, I find myself agreeing with the result it reached for
another reason. Ironically, I reach the same result because of a second disagreement
I have with the majority's analysis, that is, its rejection of B&W's argument on
instructional error.
In State Farm, the Supreme Court said: "Due process does not permit courts,
in the calculation of punitive damages, to adjudicate the merits of other parties'
hypothetical claims against a defendant [because punishment] on these bases creates
the possibility of multiple punitive damages awards for the same conduct; for in the
usual case nonparties are not bound by the judgment some other plaintiff obtains."
538 U.S. at 410. Pursuant to State Farm, B&W asked the district court to instruct the
jury it could "only award punitive damage based upon conduct . . . which had some
connection to the harm claimed by the plaintiff."
The district court refused to give that portion of B&W's requested instruction,
instead using the Arkansas Model Instruction on punitive damages. B&W argued
the district court violated its due process rights when it failed to limit the punitive
damage instruction per State Farm because the evidence at trial referred to conduct
other than what was directed at Mrs. Boerner. For example, Boerner 1) emphasized
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the harm smoking causes nationwide, specifically referring to 450,000 deaths
annually, 2) indicated cigarettes are the number one preventable killer in the United
States, and 3) introduced the Surgeon General's Reports which described other
patients' cancer diagnoses and tobacco-related diseases.
I believe B&W has a valid point. This case is quite similar to State Farm,
which also involved evidence of the harm State Farm's wrongful conduct caused on
a nationwide basis. To be sure, such evidence is relevant to prove the reprehensibility
of a defendant's conduct, and in this case Mr. Boerner undoubtedly offered the
evidence to prove just that about American Tobacco's conduct, as well as to establish
the causal relationship between cigarettes and Mrs. Boerner's cancer. But State Farm
clearly indicates such evidence can not be considered when determining the amount
of punitive damages for the specific harm suffered by a plaintiff. I do not believe the
punitive damages instruction given by the district court sufficiently limited the jury's
consideration to the damages suffered by Mrs. Boerner.
III
I acknowledge a remittitur normally should not be used to cure an instructional
error. See Werbungs Und Commerz Union Austalt v. Collectors' Guild, Ltd., 930
F.2d 1021, 1027-28 (2d Cir. 1991) ("Remittitur is appropriate to reduce verdicts only
in cases in which a properly instructed jury hearing properly admitted evidence
nevertheless makes an excessive award [and] is not designed to compensate for
excessive verdicts in cases where [instructional] error has infected the jury's entire
consideration of the evidence on damages.") (internal citation and quotations
omitted). The proper remedy for instructional error is a new trial on damages. See
Jacoby v. Johnson, 120 F. 487, 488 (3d Cir. 1903).
As a result, I would normally be reluctant to agree with the Court's remittitur
(based on excessiveness) as a means to reduce the award for amounts not specifically
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attributable to the harm suffered by Mrs. Boerner (based on instructional error). In
this case, however, the instructional error would have only affected the amount of
punitive damages awarded. So, if a remittitur was ever appropriate to cure an
instructional error, this would be the case.
Moreover, a defendant can consent to a remittitur in lieu of a new trial to cure
an instructional error. See id. ("The defendant is entitled to have the damages
assessed by a jury under proper instructions by the court. Of this right the defendant
cannot be deprived without his own consent.") (emphasis added). At oral argument,
B&W's counsel agreed, when asked, that the court could grant a remittitur to cure the
instructional error discussed above. Based on B&W's acquiescence, therefore, I
believe a remittitur is appropriate in this case, and agree with the amount of remittitur
ordered by the Court.
IV
Because of the reasons discussed, I concur in the result.
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