RJ Reynolds punitive damages reduced from $23 billion to $16.9 million

rj_reynolds

This was entirely predictable. A Florida jury, in one of the thousands of Engle progeny cases, recently awarded a punitive judgement against RJ Reynolds for $23 billion because a widow’s husband died from smoking cigarettes.

I hate RJ Reynolds as much as the next guy, but I knew that no way would this judgement stand up to appeal. It was much too excessive. Sure enough, on appeal, a judge lowered the judgement to less than 1 percent of the original figure.

From the story:

 “That award is admittedly and clearly constitutionally excessive,” said Circuit Court Judge Terry Terrell said. He said awarding an equal amount in compensatory and punitive damages “is reasonable and just.”

It’s a fair judgement, the widow has also received compensatory damages of $16.9 million. Terrell gave her the same amount in punitive damages (Frankly, I would’ve liked to have seen more than $16.9 million, but $23 billion was clearly ridiculous. Generally, punitive damages cannot be more than 10 times compensatory damages, which is why this was kind of a stupid decision by the jury; it could have resulted in the entire case being thrown out.)

Reynolds, cuddly teddy bear that it is, requested to have the judgement dismissed completely, but the judge rejected the company’s request. Of couse, RJ Reynolds is appealing the circuit judge’s opinion.

This part of the story is interesting, something I’ve been looking for. RJ Reynolds has already paid out $114 million in Engle case settlements the past few years, with another $217 million pending various appeals. That’s just RJ Reynolds, not Philip Morris or Lorillard or British American Tobacco. In all, 85 Engle cases have been decided in favour of the plaintiff and 40 in favour of Big Tobacco. You wonder at what point, the industry just says, “screw it,” and reaches a settlement with the several thousand Engle plaintiffs. Apparently, it is still worth the industry’s while financially to keep fighting these cases, but they are adding up.

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