New 2nd Circuit Ruling Could Hobble Cigarette Company Defenses in Tobacco Cases

August 23, 2019

By Raychel Lean, Law.com | CT Law Tribune, STAMFORD, CT (August 22, 2019) -- Jurors had returned a defense verdict for Philip Morris USA Inc. after a two-week trial, but that result could now be in jeopardy.

Judge Richard Wesley of the U.S. Court of Appeals for the Second Circuit. Photo: David Handschuh/NYLJ.

A federal judge in the District of Connecticut misapplied a legal doctrine that could have changed the outcome of a products liability lawsuit against cigarette giant Philip Morris USA Inc., the U.S. Court of Appeals for the Second Circuit ruled Thursday.

The new decision has the potential to dramatically change the way tobacco cases are litigated, according to David S. Golub of Silver Golub & Teitell in Stamford, who represents the plaintiff.

“The way that tobacco companies defend smoking cases is by denying that they manipulate nicotine, by this argument that, ‘Cigarettes have always been addictive. We don’t do anything to make them addictive. We didn’t try to addict people. We didn’t try to strengthen the nicotine.’ And they put witnesses on to say that,” Golub said. “If they are not allowed to do that, it changes the entire nature of how tobacco cases will be litigated in this country.”

Jurors had returned a defense verdict for Philip Morris after a two-week trial, but that result could now be in jeopardy, as the appellate panel found the lower court failed to properly analyze whether a nonmutual offensive collateral estoppel standard should have applied.

The standard blocks defendants from relitigating issues they’ve already lost elsewhere. In this case, plaintiff Vincent J. Bifolck claimed Philip Morris had already lost the argument about manipulating the composition of nicotine in cigarettes to sustain nicotine addiction in consumers.

The Second Circuit declined to rule on whether applying the standard would be fair to the defendant, leaving that to the lower court to decide. Until then, the defense verdict stands.

Counsel to Philip Morris were Geoffrey Michael, David Kouba and Paul Rodney of Arnold & Porter Kaye Scholer’s Washington, D.C., and Denver offices; Francis H. Morrison III of Axinn Veltrop & Harkrider in Hartford, Connecticut; and Frank P. Kelly, Scott D. Kaiser and Ruth Anne French-Hodson of Shook, Hardy & Bacon in San Francisco and Kansas City. They did not respond to requests for comment by deadline.

The dispute started with Bifolck’s 2006 products liability lawsuit, which alleged negligent design of the defendant’s Marlboro and Marlboro Lights cigarettes had caused his 42-year-old wife’s death.

Bifolck pointed to a U.S. Department of Justice civil lawsuit against Philip Morris and other tobacco companies in the District of Columbia under the Racketeer Influenced and Corrupt Organizations Act, or RICO.

After a bench trial in 2006, the court found the defendants violated RICO, and ordered them to make corrective statements to the press about their manipulation of nicotine levels in cigarettes.

Just before the statements were published in November 2017, Bifolck moved to block Philip Morris from challenging them in his case.

But U.S. District Judge Stefan R. Underhill said no, finding that the cases were too different in scope and cause of action to compare. Philip Morris then presented evidence that it didn’t manipulate nicotine in Marlboros, and jurors returned a defense verdict.

That wasn’t a harmless error, Thursday’s opinion said, because jurors were told they could find the cigarettes unreasonably dangerous if they found them to be unnecessarily addictive.

“At trial and during jury deliberations, Bifolck could have benefited from a stipulation of this fact,” the opinion said. “Had he built his case with a baseline finding that Philip Morris could (and at times did) manipulate nicotine levels, Bifolck’s whole strategy at trial could have been different.”

Circuit Judge Richard C. Wesley wrote the opinion, with Judges Guido Calabresi and Jose Cabranes concurring.

Read the Court opinion here: Court Opinion 17-3927_opn 082319

Raychel Lean reports on South Florida litigation for the Daily Business Review. Send an email to rlean@alm.com or follow her on Twitter via @raychellean.