TAHOE/TRUCKEE — If you have ever wondered whether the makers of Marlboros and Benson and Hedges knew or strongly suspected their cigarettes caused lung cancer, while they were telling smokers their cigarettes were safe, read Bullock v. Phillip Morris, a significant new Second District Court of Appeal ruling.45-year smokerBetty Bullock smoked cigarettes for 45 years starting in 1956 when she was 17. She smoked Marlboros until 1966, then switched to Benson and Hedges, both manufactured by Phillip Morris. Betty was diagnosed with lung cancer in 2001 and died in February of 2003. Her family sued Phillip Morris. A jury awarded compensatory damages of $850,000 for her quantifiable losses, plus $13.8 million in punitive damages, reduced from an earlier punitive damage award of $28 million.Phillip Morris appealed, claiming the $13.8 million in punies, 16 times the compensatory damage award, was “unconstitutionally excessive.”The cigarette manufacturer also argued that because the California Attorney General and 45 other states had reached a global settlement in 1998 with Phillip Morris, Betty Bullock’s award was improper.Marlboro’s campaign of deceptionThe Court of Appeal reviewed the history of Phillip Morris’ cigarette advertising, public pronouncements, press releases and even company executive’s testimony before Congress.In a 1954 full-page announcement in newspapers entitled “A Frank Statement to Cigarette Smokers,” Phillip Morris stated there was “no proof that cigarette smoking caused cancer.” The industry’s Tobacco Industry Research Committee disseminated that message for years by every means possible with statements like “The industry does not know the causes of the diseases in question” and “The views that smoking causes cancer is a subject of much disagreement in the scientific world.” The Tobacco Institute issued a report in 1979 entitled “Smoking and Health 1969-1979: The Continuing Controversy,” stating, “Scientists have not proven that cigarette smoke or any of the thousands of its constituents as found in cigarette smoke cause human disease,” following that with a similar report in 1984 calling for more research.Phillip Morris knewContrary to its repeated public pronouncements, Phillip Morris privately acknowledged, as the evidence revealed, the link between cigarette smoking and lung cancer. One scientist testified at the trial that Phillip Morris knew cigarette smoking caused cancer and had a campaign of hiding its own test results, performed in secret in Germany.It did not help that some of their advertisements featured slogans such as “Loved for Gentleness” and “The gentlest cigarette you can smoke.” And most of us remember the Marlboro Man, the handsome cowboy — one of whom went on to fame going public against Marlboros as he was dying of lung cancer.Punitive damagesTwo of the considerations when determining whether punitive damages are excessive are (1) the degree of reprehensibility and (2) the financial position of the defendant. Phillip Morris scored high on both counts.As to the latter, Phillip Morris earned well over $100 billion in profits in 2009 dollars, from 1954-2002. Porter Simon doesn’t even make that kind of money.Reprehensible conductAs to Phillip Morris’ reprehensibility, read the Court’s blistering opinion: “Phillip Morris knew that the consensus among scientific and medical professionals was that cigarette smoking caused lung cancer and other serious diseases, that its cigarettes contained many carcinogens, and that smokers suffered lung cancer and other serious diseases at rates far greater than nonsmokers. Despite that knowledge, Phillip Morris and other cigarette manufacturers for many years conducted a public campaign designed to obscure and deny the truth. Phillip Morris falsely asserted that there was no consensus in the scientific and medical community concerning the adverse health effects of smoking and that the relationship between smoking and health was unknown. Phillip Morris repeatedly asserted that more research was needed and that it was silently pursuing that research, but avoided sponsoring any research that would reveal the hazards of smoking and went to great lengths to avoid disclosing its own toxicological data. Rather than remove nicotine from its cigarettes as it had the ability to do, Phillip Morris added urea to its cigarettes to enhance the effect of nicotine so as to further exploit its customers’ addiction and gain new customers. Its customers included individuals such as Bullock who first began to smoke as youths before July 1, 1969, attracted in part by an aggressive advertising campaign in television, print and other media that was particularly appealing to youths.”“Because the evidence shows that nicotine is an addictive drug that makes smokers highly vulnerable to rationalization of their injurious behavior, and that Phillip Morris for many years and through extensive efforts deliberately exploited that vulnerability through a deceptive, broad-based publicity campaign, manipulation of the narcotic effect of nicotine in cigarettes and other means, we conclude that this factor weighs in favor of high reprehensibility.”The Court did not mince words nor hide its views towards Phillip Morris.The punitive damage award, being 16 times the compensatory damages, was high, but the Court concluded it was reasonable and did not offend due process. The makers of Marlboros and Benson and Hedges pay big.JP’s takeNormally I would rail against such a high punitive damage award, but given the evidence presented in Court and the overwhelming documentation of how cigarettes cause lung cancer — throughout the world — while Phillip Morris and other manufacturers continue cranking out their addictive and damaging product, I can’t say I disagree with this Court. This case will make it to the California Supreme Court.Jim Porter is an attorney with Porter Simon, with offices in Truckee, South Lake Tahoe and Reno. He is a mediator and was the Governor's appointee to the Fair Political Practices Commission and McPherson Commission, both involving election law and the Political Reform Act. He may be reached at firstname.lastname@example.org or at the firm’s website www.portersimon.com.