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NY Appellate Division Nixes Punitive Damages Award

October 6, 2009

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The subject of punitive damages has been a lightning rod for the business community, citizen activists, the courts and legal scholars. It is one of the few areas where the United States Supreme Courts has become involved in torts, an area traditionally left to each state to regulate.
Recently, in <i>Frankson v. Brown &amp; Williamson Tobacco Corp</i>., the Appellate Division, Second Department examined a punitive damage award levied against a group of tobacco related entities. The original jury award was a net compensatory award of $175,000 and a puntive damages award of $20,000,000, which was reduced after post trial motions to $5,000,000. The defendants cried foul because the plaintiff's attorney made repeated references to the harm caused not just to the decedent but also to the "tens of thousands" who die every year from lung cancer. Citing <i>State Farm</i>, <i>BMW</i> and <i>Phillip Morris</i>, the court held that a jury must be carefully instructed about the purposes of punitives damages and advised that they cannot be used to punish a defendant for harm caused to non-parties. In other words, no more "send a message to the millions of other victims of the defendants [allegedly] reprehensible conduct!" during the plaintiff's closing argument.
Punitive damages is an evolving area of the law. When properly applied by state courts, the recent United States Supreme Court decisions give a reasonable degree of protection to a defendant faced with a claim for punitive damages. Unfortunately, the defendant must have a strong stomach that frequently requires taking an adverse jury verdict before seeking relief before the trial court and, if necessary, appellate division.
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