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A smoker's widow was awarded $23.6 billion in punitive damages from RJ Reynolds Tobacco Company, but the award may not survive appeal.
A Florida jury on Friday granted Cynthia Robinson the multibillion-dollar sum in punitive damages, as well as $7.3 million in compensatory damages. Reuters reports that Robinson's husband was a chain smoker and died in 1996 of lung cancer at 36.
Does this incredibly large punitive award stand a chance?
Jurors Punish Cigarette Company
Robinson sued RJ Reynolds in 2008, claiming the company had "conspired to conceal the health dangers and addictive nature of its products," reports Reuters. Why did she sue so long after her husband's death? It's because Robinson had originally been part of a Florida class action case filed in 1994 against tobacco companies, but that case was dismantled by the Florida Supreme Court.
Suing on her own, Robinson managed to get a jury award for $23.6 billion in punitive damages, which are reserved for cases where the defendant is believed to have acted willfully, maliciously, or recklessly. Robinson's jury likely believed the allegations that RJ Reynolds willfully concealed the dangers of its products.
Law professor Neil Vidmar of Duke University told Reuters that jurors were responding to "outrageous behavior by the tobacco companies" in issuing such a large sum. Punitive damages by definition are intended to punish, but when is punishment too exorbitant?
When Is an Award 'Excessive'?
The U.S. Supreme Court has tackled the issue of giant jury-awarded punitive damages before, and has held that "grossly excessive" awards violate a defendant's due process rights.
There's no magic ratio for determining grossly excessive punitive damages. Professor Vidmar told Reuters that some place the ceiling on punitive damages at "nine times" the amount of compensatory damages. In Robinson's case, even when combining the compensatory damages for her ($7.3 million) and her late husband's son ($9.6 million), the punitive damages award is still nearly 1,400 times greater than the compensatory damages.
Large awards of punitive damages have historically been accepted, as long as they were closer in proportion to the compensatory damages. The Supreme Court cut a $2.5 billion punitive damages award in the Exxon Valdez spill case down to $500 million, matching the $500 million in compensatory damages.
It's unclear how an appellate court will respond to the disparity in awards in Robinson's case, but it seems likely to come down just a bit.