In a major victory for tobacco companies, a Manhattan appellate court Thursday reversed a 73-year-old lung cancer victim's $3.4 million compensatory damage award against two industry giants and threw out $17.1 million in punitive damages against Philip Morris USA.
The Appellate Division, 1st Department, held in a 3-2 opinion that Norma Rose failed to prove that Brown & Williamson Holdings and Philip Morris negligently designed cigarettes by continuing to market a product with higher levels of tar and nicotine than so-called "light cigarettes."
The majority, in a decision by Justice David S. Friedman, ruled in Rose v. Brown & Williamson Tobacco Corp., 9994, that Rose failed to prove that low-tar, low-nicotine cigarettes would "have been acceptable to the consumers that constitute the market for the allegedly defective product," regular cigarettes.
But two dissenters sharply criticized the tobacco companies, finding that the test of consumer acceptability amounted to "nothing more than a cynical effort by the defendants to maintain the commercial advantages of continuing to sell unreasonably dangerous addictive products to addicts."
Rose began smoking in the late 1940s. She finally quit in 1993 after an estimated 15 attempts to stop. Until then, she largely smoked regular cigarettes, although she briefly tried two low-tar brands, but found the taste unappealing.
In 1995, Rose was diagnosed with lung cancer and a related neurological disorder, which were indisputably linked to her decades-long smoking habit.
She, along with her husband, who brought a derivative claim, subsequently filed suit against six cigarette manufacturers and two research organizations affiliated with the tobacco industry. Defendants other than Philip Morris, R.J. Reynolds, and Brown & Williamson had their cases dismissed prior to trial.
Rose and her husband argued that the tobacco companies should have sold only "light" cigarettes, and that their failure to cease marketing regular cigarettes constituted a negligent design flaw.
On March 18, 2005, a Manhattan jury before Acting Supreme Court Justice Karen S. Smith handed down a $3.4 million compensatory award, to be split evenly against Philip Morris and Brown & Williamson. Rose also received a $17.1 punitive damages award against Philip Morris.
Defendants asked Smith to overturn the verdict, but she declined. Thursday, the Appellate Division reversed her decision and granted the dismissal.
The majority noted that New York law does not allow a manufacturer to be held liable for declining to "adopt an alternative product design that has not been shown to retain the 'inherent usefulness' the product offers when manufactured according to the more risky (but otherwise lawful) design that was actually used."
Citing Voss v. Black & Decker Mfg. Co., 59 NY2d 102, 108 (1983), Friedman noted that a plaintiff in a negligent design case must prove that "the product, as designed, was not reasonably safe because there was a substantial likelihood of harm and it was feasible to design the product in a safer manner."
Rose and her husband maintained that they had satisfied this burden by showing that it was technically feasible to manufacture light cigarettes. But the majority held that they had failed to present evidence of "consumer acceptability."
Taking issue with the trial court's view that a cigarette's function is merely "to be lit, burned, and inhaled," Friedman found that individuals smoke for the taste and psychological effects of tar and nicotine.
"Since as their counsel admitted at trial, plaintiffs offered no evidence of consumer acceptability of light cigarettes -- which was the only way to prove that light cigarettes were a feasible alternative design -- plaintiffs failed to make out a prima facie case of negligent design," Friedman concluded.
Justices Peter Tom and Bernard J. Malone Jr. joined the majority.
Justices James M. Catterson and Eugene Nardelli dissented in a 38-page opinion written by Catterson.
"[C]onsumer acceptability cannot be a factor in determining feasibility when the consumers are nicotine addicts -- a class of consumer created by the defendants through their admitted manipulation of nicotine levels," Catterson wrote.
He also noted that the "uncontroverted evidence" demonstrated that the "addictive level of nicotine in regular cigarettes" stymied Rose's efforts to quit smoking and concluded that it was "the design defect that led to more than 50 years' continued exposure to cancer-causing tar which was a substantial factor in causing her lung cancer."
While the majority acknowledged that "on both moral and policy grounds" an argument could be made to make regular cigarettes illegal, it held that it was also feasible that such a ban would be prohibitively expensive and "too difficult to enforce." But regardless of "the position one takes on the merits of this important policy issue," Friedman noted that this decision was not "one appropriately made by the judicial branch."
The panel heard arguments in the case on Dec. 12, 2006.
According to the decision, Rose continues to suffer from the neurological disorder, although her cancer is in remission.
Andrew H. Schapiro, Andrew L. Frey and Lauren R. Goldman of Mayer, Brown, Rowe & Maw served as attorneys for Philip Morris, as did Thomas J. Quigley and Luke A. Connelly of Winston & Strawn. Thomas E. Riley and Allison M. Alcasabas of Chadbourne & Parke represented Brown & Williamson.
"Philip Morris USA believes the appellate court correctly determined that based on the law and the facts presented at trial the verdict could not stand," said Murray Garnick, Altria Client Services senior vice president and associate general counsel in a statement. Garnick was speaking on behalf of PM USA.
Stuart L. Finz, Jay L. Feigenbaum and Todd M. Rubin of personal injury firm Finz & Finz represented Rose and her husband, along with Howard A. Levine, Alan J. Goldberg, Christopher W. Meyer, William S. Nolan and Christopher M. McDonald of Albany-based Whiteman Osterman & Hanna.
Finz, citing what he characterized as the "extraordinarily strong dissents," said his clients would appeal the decision and expected the Court of Appeals to reverse the verdict, "consistent with the current state of the law in New York on products liability."