Izzarelli v. R.J. Reynolds Tobacco Co.

          ORDER ON PUNITIVE DAMAGES

          STEFAN R. UNDERHILL STEFAN R. UNDERHILL UNITED STATES DISTRICT JUDGE

         This case is before me on remand for a recalculation of punitive damages, pursuant to a mandate from the Second Circuit. See Mandate, Doc. No. 502. For the reasons that follow, I award Barbara Izzarelli $8, 000, 000 in punitive damages. In addition, Izzarelli is entitled to offer-of-judgment interest up to the date an amended judgment enters.

         I. Background

         Barbara Izzarelli initiated this products liability case in December 1999 against the manufacturer of Salem King cigarettes, R.J. Reynolds Tobacco Co. (“Reynolds”). She had been smoking Salem Kings for over twenty-five years and was treated for larynx cancer in 1997. Izzarelli filed an Amended Complaint in August 2000 alleging that Reynolds designed and manufactured its cigarettes with heightened addictive properties that delivered more carcinogens than necessary. See Doc. Entry No. 34. The case was originally assigned to District Judge Alan H. Nevas. The parties engaged in minor discovery motions practice in the early stages of the case, and on June 4, 2001, Izzarelli filed an Offer of Judgment for $400, 000, which was ultimately rejected by Reynolds. See Doc. Entry No. 47. In July 2002, the discovery deadline was held open until 60 days after the Connecticut Supreme Court's ruling in a companion case, Gerrity v. R.J. Reynolds. Doc. Entry No. 56. The Connecticut Supreme Court issued its ruling on April 15, 2003. Gerrity v. R.J. Reynolds, 263 Conn. 120 (2003). Throughout the next five years, the parties jointly filed fourteen Motions for Extension of Time, seeking to extend the fact and expert discovery deadlines and the dispositive motions deadline, all of which were granted. See Doc. Nos. 58, 83, 84, 94, 96, 109, 111, 127-2, 135, 138, 142, 149, 151, 153, 157, 195, 202.

         The case was reassigned to me in February 2009. Doc. No. 219. Shortly thereafter, I held a status conference and set June 1, 2009 as the dispositive motions deadline and scheduled jury selection and trial for November 2009. Doc. No. 221. The dispositive motions deadline was then briefly extended and on June 15, 2009, Reynolds filed its Motion for Summary Judgment. Doc. Nos. 224, 226. After four Motions for Extension of Time and one Motion for Leave to File Excess Pages, Izzarelli filed her opposition to the Motion for Summary Judgment on October 30, 2009. See Doc. Nos. 229, 231, 234, 237, 239, 244. After two Motions for Extension of Time, Reynolds filed its reply on December 21, 2009. See Doc. Nos. 248, 254, 258. I held hearings on January 8 and 14, 2010 and denied in part and granted in part the Motion for Summary Judgment. Doc. Nos. 265, 267. The parties filed a stipulation regarding Izzarelli's Motion to Amend/Correct the Complaint, and Izzarelli filed her Amended Complaint on January 4, 2010. Doc. Nos. 251, 259, 262. Reynolds filed its Answer and a Supplemental Motion for Summary Judgment on January 20, 2010. Doc. Nos. 270, 271. I held a hearing on March 5, 2010 and granted in part and denied in part the Supplemental Motion for Summary Judgment. Doc. No. 298. In preparation for the coming trial, both Izzarelli and Reynolds filed many pretrial Motions in Limine in March and April 2010. See Doc. Nos. 302, 303, 304, 305, 306, 307, 308, 309, 310, 312, 314, 316, 322, 331, 339, 343, and 344. I held hearings on all pending motions on April 8 and 15, 2010. Doc. No. 350. Thereafter, jury selection was held on April 27, 2010 and trial began on April 28, 2010. Doc. Nos. 360, 362.

         On May 26, 2010, after fifteen days of trial, the jury returned a verdict in Izzarelli's favor, finding that Reynolds was liable for her injuries under the theories of strict liability and negligent design. Verdict, Doc. No. 429. The jury awarded Izzarelli $325, 000 in economic damages and $13, 600, 000 in non-economic damages for a total compensatory damages award of $13, 925, 000. Id. After the verdict, however, the parties stipulated that Izzarelli's economic damages should have only been $162, 500; see Stipulation, Doc. No. 458; which reduced Izzarelli's compensatory damages to $13, 762, 500. In its verdict, the jury also allocated 42% fault to Izzarelli, which reduced her total compensatory damages award to $7, 982, 250. See Judgment, Doc. No. 474.

         In addition, the jury found that Izzarelli had proven by a preponderance of the evidence that Reynolds should pay punitive damages. Verdict, Doc. No. 429. On December 21, 2010, I issued an order awarding punitive damages in the amount of $3, 970, 289.87, which represented $3, 547, 666.67 in attorneys' fees and $422, 623.20 in non-taxable costs. Order, Doc. No. 470 at 17. Accordingly, Izzarelli's total damages award, including economic, non-economic, and punitive, was $11, 952, 539.87. Id. Thereafter, Izzarelli moved for an award of offer-of-judgment interest pursuant to Conn. Gen. Stat. § 52-192a.^[1] See Doc. No. 471. On March 2, 2011, I issued an order awarding Izzarelli $16, 127, 086.40 in offer-of-judgment interest.^[2] See Order, Doc. No. 487. Accordingly, Izzarelli's total judgment, including economic damages, non-economic damages, punitive damages, and offer-of-judgment interest, was $28, 079, 626.27. Amended Judgment, Doc. No. 489.

         Reynolds moved for a new trial and/or for judgment as a matter of law (see Doc. No. 482), and moved for reconsideration of the offer-of-judgment interest award (see Doc. No. 490). All three motions were denied. See Orders, Doc. Nos. 491, 497. Thereafter, Reynolds filed an appeal with the Second Circuit and Izzarelli filed a cross-appeal. See Notice of Appeal, Doc. No. 498; Notice of Cross-Appeal, Doc. No. 499. The Court of Appeals certified questions to the Connecticut Supreme Court. See Izzarelli v. R.J. Reynolds Tobacco Co., 321 Conn. 172 (2016). On July 7, 2017, the Second Circuit issued a Summary Order in which it affirmed the judgment with respect to liability, but vacated and remanded the judgment for a redetermination of punitive damages in light of the Connecticut Supreme Court's holding in Bifolck v. Philip Morris, Inc., 324 Conn. 402 (2016). Summary Order, Doc. No. 501 at 10. Reynolds sought certification to the United States Supreme Court, which the Court denied. R.J. Reynolds Tobacco Co. v. Izzarelli, 138 S.Ct. 1165 (2018). I ordered the parties to submit supplemental briefing on the issue of punitive damages and held a hearing on June 21, 2018. See Order, Doc. No. 506; Minute Entry, Doc. No. 522. At the hearing, I took the parties' submissions and arguments under advisement.

         II. Punitive Damages

         A. Relevant Legal Principles

         The punitive damages analysis here is governed by the Connecticut Supreme Court's decision in Bifolck, a case similar to Izzarelli, in which the plaintiff sued another cigarette manufacturer, Philip Morris, Inc., on behalf of his deceased wife's estate for her death from lung cancer. Bifolck, 324 Conn. 402. In that case, I certified the following question regarding punitive damages: “Does Connecticut's [common-law] rule of punitive damages, as articulated in Waterbury Petroleum Products, Inc. v. Canaan Oil & Fuel Co., 193 Conn. 208 (1984), apply to an award of statutory punitive damages pursuant to [Conn. Gen. Stat.] § 52-240b, the punitive damages provision of the [Connecticut Products Liability Act]?” Id. at 410. The Connecticut Supreme Court in Waterbury Petroleum determined that punitive damages should be limited to “the costs of litigation less taxable costs” which it opined would “fulfill the salutary purpose of fully compensating a victim for the harm inflicted on him while avoiding the potential for injustice which may result from the exercise of unfettered discretion by a jury.” 193 Conn. at 236-38.

         The Connecticut Products Liability Act (“CPLA”) provides: “Punitive damages may be awarded if the claimant proves that the harm suffered was the result of the product seller's reckless disregard for the safety of product users, consumers or others who were injured by the product. If the trier of fact determines that punitive damages should be awarded, the court shall determine the amount of such damages not to exceed an amount equal to twice the damages awarded to the plaintiff.” Conn. Gen. Stat. § 52-240b. The Bifolck Court concluded that under the CPLA, punitive damages were not limited to the common-law rule of litigation expenses less taxable costs. Bifolck, 234 Conn. at 447. The Court opined that the common-law rule and the statutory provision were inconsistent in many respects, but that “statutory punitive damages are awarded on the basis of the same conduct that would justify an award of common-law punitive damages-reckless disregard of another's rights.” Id. at 449. The Court also determined that the two methods were similar in that they both guarded against excessive punitive damage awards. Id. at 449-50 (common-law rule adopted to limit “the exercise of the jury's discretion by tying [punitive] damages to litigation expenses” and, with respect to the statute, “by vesting the court with authority to determine the amount of punitive damages and by limiting the amount of those damages in the act, the legislature provided an alternative method of reining in excessive punitive damages”). The Court determined that the two methods differed, though, because “statutory damages are measured in relation to a multiple of compensatory damages, not litigation expenses” and “the statute vests the court with exclusive authority to determine the amount of damages, whereas the trier of fact traditionally had determined the amount of common-law punitive damages.” Id. Further, the Bifolck Court reasoned that if it

construe[d] the act to equate the statutory punitive damages to litigation expenses, in some cases the statute would have no effect or frustrate the purpose of the common-law rule. In any case in which litigation expenses are less than two times the damages, the statute would have no impact whatsoever, as the common-law recovery would already have been available. In any case in which the plaintiff's compensatory damages are relatively low in comparison to his or her litigation costs, the cap limiting punitive damages to twice compensatory damages would frustrate the purpose of common-law damages-fully compensating a victim for the harm inflicted on him. . . . This disparity would not be uncommon given the statutory reduction of compensatory damages in relation to comparative responsibility.

Id. at 451-52 (citations omitted; internal quotation marks omitted).

         The Bifolck Court also took into consideration the award of attorneys' fees in relation to punitive damages in determining whether the common-law approach applied. Id. at 452. A different section of the CPLA provides: “If the court determines that the claim or defense is frivolous, the court may award reasonable attorney's fees to the prevailing party in a products liability action.” Conn. Gen. Stat. § 52-240a. “When an award of attorney's fees pursuant to § 52-240a and an award of punitive damages pursuant to § 52-240b are both applicable, the combined effect of such awards would be substantially similar to [Conn. Gen. Stat. § 35-53, that we] interpreted to have punitive damages not limited by the common-law rule.” Bifolck, 324 Conn. at 452. “If punitive damages in § 52-240b were interpreted to mean common-law punitive damages, then both §§ 52-240a and 52-240b would provide for attorney's fees, but under different contexts.” Id. at 453. The Court identified “several concerns” that arose from that construction: (1) “attorney's fees under § 52-240a are not capped, as are punitive damages in § 52-240b”; and (2) “in cases in which a prevailing plaintiff has established both reckless disregard of safety and frivolous litigation conduct, the defendant would not be penalized for one of those wrongful acts.” Id.

         Although the Supreme Court determined that the common-law rule of punitive damages did not apply to products liability cases, it did not set out the correct method of calculating punitive damages. It has in the past, however, addressed the same question with respect to punitive damages claims under the Connecticut Unfair Trade Practices Act (“CUTPA”). Ulbrich v. Groth, 310 Conn. 375 (2013). There, the Court held, like in Bifolck, that the common-law rule of calculating punitive damages was not applicable to CUTPA claims. Id. at 449. The Court's reasoning in Ulbrich was substantially similar to that in Bifolck, namely that following the common-law rule would be duplicative, because CUTPA already provided for attorneys' fees in another statutory section.^[3] Id. at 452. Having determined that the common-law computation of damages was inapplicable, the Court considered the relevant factors laid out by the United States Supreme Court in Exxon Shipping v. Baker, 554 U.S. 471 (2008), in determining punitive damages. Ulbrich, 310 Conn. at 452. The Exxon factors include: (1)“the degrees of relative blameworthiness, i.e., whether the defendant's conduct was reckless, intentional or malicious”; (2) “whether the defendant's [a]ction [was] taken or omitted in order to augment profit”; (3) “whether the wrongdoing was hard to detect”; (4) “whether the injury and compensatory damages were small, providing a low incentive to bring the action”; and (5) “whether the award will deter the defendant and others from similar conduct, without financially destroying the defendant.” Id. at 454 (citing Exxon Shipping, 554 U.S. at 493-94, 503-04) (internal quotation marks omitted).

         Further, the Ulbrich Court noted that a punitive damages award must also comport with due process. Id. at 455. The United States Supreme Court laid out the following relevant factors to consider in answering that question: “[1] the degree of reprehensibility of the defendant's misconduct; [2] the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; [and 3] the difference between the punitive damages awarded … and the civil penalties authorized or imposed in comparable cases.” State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003). Among those factors, “the reprehensibility of a defendant's conduct is the most important[.]” Ulbrich, 310 Conn. at 455. “Reprehensibility is determined by ‘considering whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.'” Id. at 455-56 (citing State Farm, 538 U.S. at 419).

         In State Farm, the Supreme Court refused to adopt a bright-line ratio between punitive and compensatory damages but posited that “few awards exceeding a single-digit ratio … will satisfy due process.” State Farm, 538 U.S. at 425. The Court further opined that “[s]ingle-digit multipliers are more likely to comport with due process, while still achieving the State's goals of deterrence and retribution[.]” Id. The Court tempered that opinion, though, in stating “ratios greater than those we have previously upheld may comport with due process where a particularly egregious act has resulted in only a small amount of economic damages … however[, w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” Id. (citations omitted) (internal quotation marks omitted).

         B. Discussion

         Here, Izzarelli seeks the maximum punitive damages award permitted by statute, two times the amount of compensatory damages, totaling $15, 964, 500. Mot. for Punitive Damages, Doc. No. 514 at 40. As support, Izzarelli argues that Reynolds' conduct was particularly reprehensible and Izzarelli's injuries were sufficiently serious to warrant a maximum award. See Id. Reynolds argues that a nominal punitive damages award would be sufficient because Izzarelli is already receiving sufficient damages that are punitive in nature, including non-economic compensatory damages and offer-of-judgment interest. Reynolds' Brief, Doc. No. 515 at 1, 6. Reynolds argues that any additional punitive damages award would violate due process. Id. at 6. Alternatively, Reynolds argues that, at most, a 1:1 ratio with compensatory damages would be appropriate. Id.

         In light of the evidence at trial regarding Reynolds' decades-long conduct and the harm suffered by Izzarelli, a substantial punitive damages award is appropriate. I do not agree with Izzarelli, however, that she should be awarded the maximum award allowable under the CPLA. For the reasons that follow, I award Izzarelli $8, 000, 000 in punitive damages.

         In my ruling on Reynolds' Motion for a New Trial and Renewed Motion for Judgment as a Matter of Law, I noted that the jury could have found the following facts regarding Izzarelli's injuries:

Izzarelli began smoking when she was a young teenager and she chose Salem Kings[.] Izzarelli quickly became a heavily-addicted smoker who smoked daily two to three packs of Salem Kings. In 1996, at age 36 and after smoking daily for over 25 years, Izzarelli was diagnosed with stage T-3 squamous cell cancer of the larynx. She underwent surgery to remove her larynx, create an opening in her windpipe called a stoma, and position a laryngectomy tube. After surgery, Izzarelli received radiation treatment. Izzarelli is cancer-free, but continues to have difficulties with the stoma and the laryngectomy tube. She quit smoking in January 1997.

Although it is uncommon for a woman in her 30s to develop laryngeal cancer, laryngeal cancer caused by smoking is dose-related; the more a person smokes, the greater the likelihood of developing the condition. Izzarelli smoked 2 to 3 packs a day for 25 years; the equivalent of smoking a pack a day for 30 to 50 years. Smoking is attributed as the cause of 95% of cancers of the larynx, with the other 5% attributed to toxic exposure. A person with a pack-a-day history similar to Izzarelli's has between a 6.9 and 20 times greater chance of developing laryngeal cancer than one who does not smoke. The heightened addictive properties of Salem Kings and the heightened ...