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Georgia’s participation in the 1998 tobacco settlement bars the heirs of a woman who died of lung cancer in 2001 from seeking punitive damages from Brown & Williamson Tobacco Corp., the Georgia Supreme Court has ruled. Brown & Williamson Tobacco Corp. v. Gault, No. S05Q1465. The Georgia high court had considered the issue as a pretrial question of state law posed by Senior U.S. District Judge Robert L. Vining Jr., who is presiding over a products liability action brought against Brown & Williamson in 2002. The administrator of Clara Lois Gault Freeman’s estate, Willie Gault, as well as her husband, Danny Freeman, alleged in their suit that Freeman’s decades-long habit of smoking Kool’s cigarettes caused her death at age 43 in 2001. Brown & Williamson argued that Freeman’s heirs could not seek punitive damages because of the state’s settlement with tobacco companies, including B&W, for which Georgia received $4.8 billion. In the settlement agreement, the state of Georgia released Brown & Williamson from all claims, including punitive damages, arising out of the manufacture and sale of tobacco. Writing on behalf of the court’s 6-1 majority, Presiding Justice Carol W. Hunstein said that Georgia’s rule that prevents parties or their “privies” from relitigating claims already adjudicated-known as “res judicata”-precludes Clara Freeman’s heirs from seeking punitive damages from Brown & Williamson. Hunstein wrote that while the state cannot represent its citizens’ private claims for compensatory damages, it can and did release the tobacco company from its citizens’ punitive damages claims. “Because punitive damages serve a public interest and are intended to protect the general public, as opposed to benefiting or rewarding particular private parties,” Hunstein wrote, “we find the State, in seeking punitive damages in the suit against B&W, did so as parens patriae and in this capacity represented the interests of all Georgia citizens, including plaintiffs here.” Justice Hugh P. Thompson was the lone dissenter. He said that while the requirements of res judicata were technically met, application of that rule to preclude a claim for punitive damages in this case would violate Georgia public policy, an exception to the res judicata rule. Georgia’s statute on punitive damages indicates that the Legislature did not intend to bar a punitive damages claim based on a settlement, as opposed to a fact-finder’s determination that such an award was appropriate. The issue was put to the Georgia Supreme Court after Brown & Williamson asked Vining to grant it summary judgment on the claims brought by Clara Freeman’s relatives, including their punitive damages claims. Vining granted the company summary judgment on some claims, but said that the plaintiffs could proceed to trial on their claims that the cigarettes were designed in a defective manner, and that Brown & Williamson had negligently manipulated the contents of cigarettes so as to continue and enhance their addictive effects. Vining initially found that the plaintiffs’ punitive damages claim was not barred by the settlement agreement, but then certified the question to the Georgia high court after Brown & Williamson asked him to reconsider. Leslie J. Bryan of Atlanta’s Doffermyre, Shields, Canfield, Knowles & Devine, who represents the plaintiffs, said that the high court had disregarded the state of Georgia’s amicus brief saying that the settlement did not preclude individual punitive damages claims. She said that other state courts had upheld jury awards of punitive damages in tobacco suits brought by citizens of states that took part in the master settlement agreement. Bryan said that the case before Vining is ready to be tried on the plaintiffs’ compensatory damages claims.

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