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The California Supreme Court exposed tobacco manufacturers to potentially enormous liability Monday by giving smokers greater opportunity to sue for physical ailments that might have started decades ago. While holding that a statutory immunity granted by the state Legislature protects manufacturers from suits stemming from their conduct between 1988 and 1998, the high court held that suits for conduct before and after those years could proceed. And in a companion ruling, it held that the 10-year immunity period doesn’t protect companies from suits alleging that additives, such as ammonia, produced an adulterated form of tobacco that made it unreasonably dangerous. Manufacturers claimed partial victory by saying the court maintained manufacturers’ immunity in the 1990s. But their opponents basically called that poppycock. “The bottom line is that the effect of these opinions is not going to be adverse in any significant way to smokers,” said Kentfield solo practitioner Daniel Smith, who argued the case against Philip Morris Cos. Inc. “The claims will be made that it’s what the tobacco companies did in the ’50s, ’60s and ’70s that got smokers addicted to cigarettes, and it was that misconduct that carried the smokers through to the time and the dates that they were diagnosed with cancer. “The tobacco companies needed a ruling that said they couldn’t be sued before ’88, and they didn’t get it,” he added. “So this is a big win for smokers.” The issues addressed by the court on Monday arose out of two separate suits that dealt with the so-called Immunity Statute — formulated during the infamous “Napkin Deal,” in which legislators agreed to the basics on a restaurant napkin — and its counterpart, the Repeal Statute. The Immunity Statute, which was effective on Jan. 1, 1988, had been passed by the state Legislature to give tobacco companies immunity from product liability suits by smokers, but that was repealed effective Jan. 1, 1998. In <i>Myers v. Philip Morris Cos. Inc</i>., 02 C.D.O.S. 7019, manufacturers had argued that the Repeal Statute was not retroactive, a reading which would prohibit suits from being filed for events in the previous decade. But they also argued that the Immunity Statute <i>was</i> retroactive and prevents suits for events prior to 1988. In <i>Naegele v. R.J. Reynolds Tobacco Co.</i>, 02 C.D.O.S. 7027, the plaintiffs had argued that the 10-year Immunity Statute did not bar suits alleging that manufacturers had used additives that exposed smokers to greater harm than they would have experienced from tobacco alone. In both suits, the plaintiffs — Betty Myers and Edwin Brigham — contracted lung cancer after years of smoking. Brigham has already died, but was replaced by a trustee, allowing the suit to go forward. The Supreme Court in <i>Myers </i>reached a Solomon-like decision, ruling 6-1 to carve out immunity for tobacco manufacturers between 1988 and 1998, but exposing them to liability for the years before and after. “The liability of tobacco companies based on their conduct outside the 10-year period of immunity is governed by general tort principles,” Justice Joyce Kennard wrote for the majority. Justice Carlos Moreno dissented, arguing that he felt the Legislature clearly intended to make its Repeal Statute retroactive. “The state has a substantial interest in seeing that victims of dangerous products are compensated for their injuries by the manufacturers of dangerous or defective products that are in the best position to provide such compensation,” he wrote. “The state has an equally substantial interest in protecting and promoting the health of Californians. These interests would be significantly advanced by retroactive application of the Repeal Statute.” In <i>Naegele</i>, the court turned around and poked a loophole into the 10-year immunity it had simultaneously approved. The ruling, also authored by Justice Kennard, held that tobacco manufacturers could be held accountable for additives that could have increased the risk of cancer. “Because, as we have explained, the statutory immunity does not shield a tobacco company from liability for injuries or deaths caused by something not inherent in the product itself,” she wrote, “the Immunity Statute does not bar these claims.” However, Kennard rejected plaintiffs’ claims that the 10-year Immunity Statute still allows for suits against manufacturers for allegedly making their products more addictive through increased nicotine. “Because nicotine is naturally present in tobacco, the risks associated with nicotine are inherent in tobacco products,” she wrote. “Therefore, an allegation that defendants increased the nicotine content of their cigarettes through blended or high-nicotine tobacco does not avoid the bar of the Immunity Statute because it does not allege that defendants exposed plaintiff to a risk other than those inherent in tobacco products.” In a concurring opinion, Justice Janice Rogers Brown wrote separately to say she didn’t buy the distinction the majority drew between pure and adulterated products. The processing of tobacco, she wrote, doesn’t necessarily make it contaminated, and “to the extent such cigarettes meet consumer expectation, they would not be unreasonably dangerous” and should still enjoy statutory immunity. “This is not to say that some additives may not give rise to unique dangers that take a product outside the statutory definition,” she wrote. “But we should not adopt a standard that will potentially sweep too many cases within its ambit.” Justice Kathryn Mickle Werdegar wrote a concurring and dissenting opinion in which she said the court should have also allowed suits alleging that manufacturers manipulated nicotine content to addict consumers. “There is no principled way to distinguish for these purposes between plaintiff’s allegations that defendants secretly used additives and his allegations that defendants secretly manipulated and lied about the addictiveness of their product,” she wrote. “Both activities allegedly ‘exposed smokers to dangers beyond those commonly known to be associated with cigarette smoking’; therefore, both fall outside the Immunity Statute.” Justice Moreno concurred with Werdegar. Response to the ruling was quick and divided. Richard Daynard, chairman of the Tobacco Products Liability Project at Boston’s Northeastern University School of Law, called it a sign that “tobacco companies’ days of domination in the courthouse have come to an end.” Winston-Salem, N.C.-based R.J. Reynolds Tobacco Co., on the other hand, issued an immediate statement calling the ruling “a victory for fundamental fairness” in that the high court rejected retroactivity for the Repeal Statute. H. Joseph Escher III, who argued the case for R.J. Reynolds, was a bit more realistic, saying the ruling is “not a clean win for anybody.” Even so, Escher, a partner at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, pointed to the retroactivity decision and the fact that the court said that the Immunity Statute covers fraud claims. He also argued that the court’s ruling on retroactivity would help manufacturers seek retrials in cases in which jurors awarded hefty punitive damages for ailments that appeared during the 10-year immunity period. In two separate trials in San Francisco, R.J. Reynolds and Philip Morris had been hit with a total of $10 million and $35 million in punitive damages, respectively, while Philip Morris was hit with another $100 million in a case in Los Angeles. Escher acknowledged the “loophole” the court had left in the immunity period for suits about additives, but he called it “a window too narrow” for plaintiffs “to get through.” “There is no additive in tobacco that’s riskier than tobacco,” he said. “So that’s a loophole that’s not going to work for them.”

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