A case before Massachusetts' top appellate court over whether more safeguards are needed to cap runaway punitive damage awards has divided attorneys, with some saying the big-dollar verdicts can be skewed by improper evidence and others calling the matter a solution in search of a problem.

The Supreme Judicial Court will hear arguments Wednesday in a case filed by the estate of Barbara Ellen Fontaine, who won a $1 billion punitive damages verdict against Philip Morris USA Inc. The amount was the highest ever returned by a Massachusetts jury and, after both sides suggested it was too high, was eventually reduced to $56 million by the trial judge.

In its brief to the state's top court, Philip Morris noted that the jury's verdict "was so gigantic that within minutes of its announcement in open court, the plaintiff's attorney asked the judge to send the jury back" and to encourage the panel to trim its verdict by $900 million.

The tobacco company is arguing that punitive damages should require clear and convincing evidence and not the lower preponderance of evidence bar that plaintiffs need to clear in order to show liability and win a compensatory judgment. The defense has also argued that punitive damages trials should be separate from trials to establish liability.

Philip Morris argues that the jury was clearly motivated by passion, as opposed to the evidence, and that the trial court "did virtually nothing to protect against the risk of a runaway punitive damages award."

A Sharp Divide Among Attorneys

Attorneys differ on whether higher standards are needed, largely depending upon whether they typically represent plaintiffs or defendants. Susan Bourque, a plaintiffs-side product liability and tort litigation attorney with Parker Scheer LLP, said this is not a great test case to attempt to change the way punitive damages are handled in Massachusetts.

The necessary guardrails — including the judge remitting the punitive damages award to a fraction of what the jury came back with — nixed the original eye-popping verdict, Bourque noted.

"The guardrails are in place and the guardrails worked here," she said. "I don't think there is anything about this case that is going to require the SJC to say, 'We've got to do something here, we've got it wrong.' I don't think this is a great test case."

But Nelson Mullins Riley & Scarborough LLP partner John Kalas told Law360 that the problem with not bifurcating the case is that the jury can be swayed in its liability assessment by evidence that has nothing to do with the specific product at hand or by alleged conduct that may have occurred after the plaintiff has died.

"The system didn't work here, because you cannot distinguish whether the jury based its verdict on evidence that should not be admitted in the first phase, or whether they actually truly found liability on the part of Philip Morris," Kalas said. "You just can't sort that out."

Even though the damages were significantly reduced, Kalas added that "the verdict itself could be incorrect" because the trial was not bifurcated.

"If you create clear rules with bifurcation, where we are just focused on liability in that first phase, it helps judges really sort the evidence out and focus on what the jury should be figuring out: Did the company's conduct cause the plaintiff's injuries?" Kalas said.

Michael McCann, a personal injury attorney at Shepard O'Donnell PC, noted that punitive damages are not readily available in Massachusetts. They are limited to instances such as wrongful death cases where the defendant is accused of gross negligence, he said, and that the tobacco giant's bottom line requires a significant sum in cases that check those two statutory boxes.

"This is Philip Morris, this is a multibillion-dollar company," McCann said. "If the role of punitive damages is to deter conduct, it has to have a deterrent effect. In order to do that for a company like Philip Morris, there has to be significant damages involved."

Punitive damages can also be available in employment cases, and the state does not impose a statutory cap. Seyfarth Shaw LLP's Lynn Kappelman, a management-side trial lawyer, said she would like to see bifurcation.

"If you're forced to litigate liability and punitive damages in the same preoceedings, you're at a severe disadvantage," Kappelman said. "The jury hears evidence of the company's net worth before they decide liability. So maybe they think, 'The conduct wasn't so bad, but the company has millions and millions of dollars, so we will give the plaintiff something.'"

Having safeguards in place is especially important in today's polarized and often politically charged environment, Kappelman added.

"If you poll jurors now, you find that there is much more of a distrust of big employers and big corporations than I have ever seen in my 37-year career," she said.

Plenty of People Weighing In

The case has drawn a flurry of opinions trying to sway the state's high court. The Massachusetts Academy of Trial Attorneys backed the plaintiffs, arguing that established law supports the process through which the original verdict was reduced and that the trial court was within its discretion to deny bifurcation on the punitive damages issue.

"In the overwhelming majority of states that have imposed bifurcation, it is the product of a legislative judgment expressed by statute," the brief states. "If Philip Morris wants to advocate for bifurcation, it has submitted its preference to the wrong branch of government."

Briefs supporting the plaintiffs were also submitted by law professors who specialize in punitive damages and by a group of anti-tobacco organizations.

Philip Morris' argument has won backing from the U.S. Chamber of Commerce. In a brief to the SJC, the Chamber argued that the fact that such a massive verdict was even possible suggests that courts should adopt a higher standard of proof for punitive damages cases and split that portion of the case from the question of liability.

"These safeguards can help ensure that tort verdicts are predictable and just, rather than arbitrary and grossly excessive," the Chamber argued.

A brief submitted by Pioneer New England Legal did not specifically support either side, but argued for more guidance on how juries should award punitive damages, writing that "policy-making by jurors is a concern in the present case."

"An award of $1 billion of punitive damages does more than send a message to Phillip Morris," Pioneer argued. "It may be interpreted as an effort to put Phillip Morris out of business. An important and complex policy decision like the continued existence of Phillip Morris, with nationwide implications, should be resolved through the political process, and not by twelve jurors from Middlesex County."

Pioneer suggested that the SJC refer the matter to the Standing Advisory Committee on Rules of Civil Procedure to establish procedural rules for cases where the law allows for punitive damages. Without specific rules, the think tank argued, major Bay State businesses, including the life sciences, pharmaceutical and bio-medical industries, could be harmed by "unjustified or excessive punitive damages awards."

A Record-Setting Verdict

Fontaine's estate argued that the $56 million verdict should stand, even as Philip Morris argued that it is an amount three times the size of the largest punitive award ever upheld by an appellate court in Massachusetts. But Philip Morris has not shown that the jury was motivated by improper prejudice, the plaintiffs say, and ignores the fact that juries in non-bifurcated cases have either returned verdicts for the defense or declined to impose punitive damages.

Fontaine smoked for more than 40 years before dying in 2017 at the age of 60, according to her estate's lawsuit. She had quit smoking in 2015, the same year she was diagnosed with lung cancer, according to the complaint.

The suit alleged Philip Morris and its codefendants breached the implied warranty of merchantability when they sold Marlboro and Parliament cigarettes, because there were reasonably safer alternative designs, such as low-nicotine cigarettes, non-inhalable cigarettes and non-burning cigarettes.

A Massachusetts jury in 2022 awarded the plaintiffs $8 million in compensatory damages in addition to the $1 billion punitive award that was later reduced.

Neither counsel for the plaintiffs nor a Philip Morris representative responded to comment requests Tuesday.

Fontaine's estate is represented by Celene H. Humphries of Celene H. Humphries PLLC, Randy Rosenblum of Dolan Dobrinsky Rosenblum Bluestein LLP, Meredith K. Lever, Mark Gottlieb, Andrew A. Rainer and ShanShan Guo of Public Health Advocacy Institute and Kevin Donovan of Rubenstein Law.

Philip Morris is represented by Scott A. Chesin, Michael Rayfield, Anna A. Gadberry and Bryan Thompson of Shook Hardy & Bacon LLP.

The case is Fontaine v. Philip Morris USA Inc., case number SJC-13778, in the Supreme Judicial Court of Massachusetts.