Bullock v. Philip Morris USA, Inc.
198 Cal. App. 4th 543
| Cal. Ct. App. | 2011Background
- Bullock sued Philip Morris for personal injuries from long-term smoking; compensatory damages were $850,000 and punitive damages $28 billion were later reduced post-trial.
- The action arises from decades-long conduct by Philip Morris to mislead the public about smoking risks and to conceal nicotine addiction and carcinogenic aspects of cigarettes.
- A 1998 Consent Decree (MSA-linked settlements with multiple states) resolved related state actions but did not crown liability in Bullock’s case.
- The California AG action alleged deceit about health harms, targeting minors, false claims, and unfair competition; it preceded the Bullock suit but involved different claims.
- Bullock’s trial in 2009–2010 yielded $13.8 million in punitive damages; prejudgment interest was awarded on that amount from the verdict date.
- Philip Morris appealed, contending res judicata, excessiveness of punitive damages, and prejudgment interest; the court held all challenges meritless.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Res judicata applicability | Bullock’s action is a separate injury, not barred by prior consent decree. | Consent Decree bars punitive damages due to privity/relitigation of the same conduct. | Res judicata does not apply; different primary rights exist. |
| Constitutional excessiveness of punitive damages | Punitive damages necessary to punish extreme conduct and deter future harm. | 13.8 million is excessive given compensatory damages and the MSA. | Punitive award not unconstitutional; ratio and factors justify the amount given extreme reprehensibility and wealth. |
| Impact of financial condition on punitive damages | Wealth should support a high punitive award. | Wealth may cap punitive risk; excessive given large profits. | Wealth is a factor but does not override due process; the award is not grossly excessive relative to wealth and conduct. |
| Prejudgment interest on punitive damages | Interest should accrue only on compensatory damages to avoid punitive windfall. | Interest should run from verdict on all damages. | Prejudgment interest on punitive damages from verdict date proper under Civil Code 3287(a). |
Key Cases Cited
- BMW of North America, Inc. v. Gore, 517 U.S. 559 (U.S. Supreme Court, 1996) (established guideposts for punitive damages under due process)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. Supreme Court, 2003) (reaffirmed three guideposts and no rigid ratio; discusses single-digit norms)
- Exxon Shipping Co. v. Baker, 554 U.S. 471 (U.S. Supreme Court, 2008) (fixed ratio in maritime context; discusses limits of punitive damages)
- Simon v. San Paolo U.S. Holding Co., Inc., 35 Cal.4th 1159 (Cal. 2005) (California view on presumptive single-digit ratio and exceptions)
- Boeken v. Philip Morris, Inc., 127 Cal.App.4th 1640 (Cal. Ct. App. 2005) (applies single-digit ratio limit to punitive damages; cites State Farm/Simon)
- Diamond Woodworks, Inc. v. Argonaut Ins. Co., 109 Cal.App.4th 1020 (Cal. Ct. App. 2003) (earlier, higher allowances for ratio; later disapproved by Simon)
- Planned Parenthood v. Coalition for Life Activists, 422 F.3d 949 (9th Cir. 2005) (discusses small compensatory damages and reprehensibility in ratio analysis)
- Johnson v. Ford Motor Co., 35 Cal.4th 1191 (Cal. 2005) (reprehensibility and ratio considerations in California punitive damages analysis)