Boerner v. Brown & Williamson Tobacco Co.: the Eighth Circuit Misapplied the Second Gore Guidepost to Erroneously Decide a Punitive Damages Award Was Excessive

• Publication year: 2022

39 Creighton L. Rev. 387. BOERNER V. BROWN & WILLIAMSON TOBACCO CO.: THE EIGHTH CIRCUIT MISAPPLIED THE SECOND GORE GUIDEPOST TO ERRONEOUSLY DECIDE A PUNITIVE DAMAGES AWARD WAS EXCESSIVE

Creighton Law Review

Vol. 39

INTRODUCTION

Courts utilize procedural and substantive due process principles when reviewing punitive damages awards.(fn1) Within the last decade, the United States Supreme Court provided guidance for lower courts employing substantive principles to review the size of such awards.(fn2) For instance, in BMW of North America, Inc. v. Gore,(fn3) the Court presented three guideposts to assist lower courts in identifying unconstitutionally excessive punitive awards: 1) the degree of reprehensibility of the defendant's conduct, 2) the ratio of the punitive damages to the compensatory damages awarded in the case, and 3) the disparity between the punitive award and the civil penalties that may be imposed for similar conduct.(fn4) The Court has repeatedly indicated the first Gore guidepost is the most important consideration when reviewing the reasonableness of a punitive award.(fn5) The Court has also announced several times its refusal to set a bright-line ratio as a constitutional limit for punitive damages and has expressed the lack of a "simple mathematical formula" for calculating a constitutionally permissible ratio under the second Gore guidepost.(fn6)

In Boerner v. Brown & Williamson Tobacco Co.,(fn7) the United States Court of Appeals for the Eighth Circuit remitted a $15 million punitive damages award, concluding the award was excessive when compared to the $4.025 million compensatory damages award.(fn8) In Boerner, Mary Jane Boerner ("Mrs. Boerner") and Henry Boerner ("Mr. Boerner") brought suit against the Brown & Williamson Tobacco Company ("B & W") after Mrs. Boerner developed lung cancer as a result of nearly thirty-six years of smoking Pall Mall cigarettes, which were manufactured by B & W's predecessor, American Tobacco Company ("American Tobacco").(fn9) The suit alleged, in part, that the cigarettes contained a design defect that caused Mrs. Boerner's cancer.(fn10) After Mrs. Boerner passed away, the United States District Court for the Eastern District of Arkansas, Western Division, awarded Mr. Boerner compensatory damages of $4.025 million and punitive damages of $15 million on his design defect claim.(fn11)

On appeal by B & W, the Eighth Circuit reviewed the constitutionality of the punitive damages award by applying the first two Gore guideposts.(fn12) Under its first guidepost analysis, the Eighth Circuit determined American Tobacco's sale of defective cigarettes was "highly reprehensible."(fn13) Despite this determination, the Eighth Circuit decided to remit the punitive award to $5 million under the second guidepost because the court decided a ratio of punitive to compensatory damages of "approximately 1:1" reached the limits of due process in Boerner.(fn14)

This Note will first review the facts and holding of Boerner and the rationale the Eighth Circuit employed to reach the conclusion that the punitive award was excessive.(fn15) This Note will then provide a summary of relevant Supreme Court and Eighth Circuit case law that addressed the constitutionality of punitive awards.(fn16) Next, this Note will show the Eighth Circuit erred when remitting the punitive damages award in Boerner to create an approximate 1:1 ratio.(fn17) This Note will establish the following: 1) the Eighth Circuit correctly decided American Tobacco's conduct was highly reprehensible because three factors associated with reprehensible conduct were present in Boerner and the decision was consistent with prior Eighth Circuit case law, 2) the Eighth Circuit incorrectly decided a ratio of approximately 1:1 was necessary under the second guidepost because the court misapplied a rule set forth by the Supreme Court in State Farm Mutual Automobile Insurance Co. v. Campbell(fn18) and misconstrued prior Eighth Circuit case law, and 3) the Eighth Circuit's flawed second guidepost analysis did not outweigh the inherent strength of the first guidepost, which supported the reasonableness of the punitive award.(fn19) Thus, this Note will conclude the Eighth Circuit erred when it remitted the punitive damages award in Boerner to create an approximate 1:1 ratio.(fn20)

FACTS AND HOLDING

In 1945, fifteen-year-old Mary Jane Boerner ("Mrs. Boerner") started smoking.(fn21) She smoked unfiltered Lucky Strike cigarettes for approximately six months before switching to unfiltered Pall Mall cigarettes.(fn22) By 1948, Mrs. Boerner was allegedly addicted to smoking.(fn23) She attempted to quit on multiple occasions and finally broke the habit in 1981 through what she called "[an] intervention of God."(fn24) In 1996, Mrs. Boerner was diagnosed with lung cancer.(fn25) In addition to undergoing three extensive surgeries, she received radiation treatments and chemotherapy.(fn26) Mrs. Boerner passed away in August 1999.(fn27)

Prior to her death, Mrs. Boerner and her husband, Henry Boerner ("Mr. Boerner"), filed suit against the Brown & Williamson Tobacco Company ("B & W") in the United States District Court for the Eastern District of Arkansas, Western Division, on June 19, 1998.(fn28) B & W's predecessor, the American Tobacco Company ("American Tobacco"), was the manufacturer of Pall Mall cigarettes.(fn29) The Boerners' suit included claims of 1) fraud and deceit, 2) negligent misrepresentation, 3) strict liability and negligence claims of design defect, and 4) strict liability and negligence claims of failure to warn.(fn30) The Boerners sought compensatory and punitive damages for Mrs. Boerner's personal injuries and Mr. Boerner's loss of consortium.(fn31) B & W responded to the claims with a Motion for Summary Judgment.(fn32) On October 7, 1999, District Judge James M. Moody granted the motion on the fraud and deceit, negligent misrepresentation, and post-1969 failure to warn claims.(fn33) The district court denied the motion on the design defect and pre-1969 failure to warn claims.(fn34)

After Mrs. Boerner's death, Mr. Boerner became administrator of her estate.(fn35) On October 28, 1999, Mr. Boerner filed an amended complaint in the district court to include wrongful death and survivor claims based on the theories in the original complaint.(fn36) B & W again moved for summary judgment and the district court granted the motion on the remaining failure to warn and design defect claims.(fn37)

Mr. Boerner appealed the district court's decision to the United States Court of Appeals for the Eighth Circuit, challenging the district court's grant of B & W's motions for summary judgment.(fn38) Judge Roger L. Wollman, writing for the court, affirmed the district court's grant of summary judgment for the post-1969 inadequate warning claim, but reversed and remanded for trial the design defect and pre1969 inadequate warning claims.(fn39)

After Mr. Boerner had finished presenting his case-in-chief on remand, B & W filed a motion for judgment as a matter of law.(fn40) The district court denied the motion for the failure to warn claim but reserved its decision on the design defect claim, stating it would reexamine the motion later if necessary.(fn41) The jury returned a verdict for B & W on the pre-1969 failure to warn claim.(fn42) However, the jury decided Pall Mall cigarettes' defective condition proximately caused the illness and ultimate death of Mrs. Boerner and the resulting injuries to Mr. Boerner.(fn43) The jury awarded compensatory damages of $4.025 million and punitive damages of $15 million.(fn44) The district court then granted B & W's motion for judgment as a matter of law with respect to the punitive damages, but on reconsideration the court reinstated the full $15 million award.(fn45)

B & W again appealed the district court's decision to the Eighth Circuit.(fn46) B & W challenged the district court's refusal to grant its motions for judgment as a matter of law or new trial and contested the district court's judgment awarding excessive punitive damages.(fn47)

With respect to the motions for judgment as matter of law and new trial, B & W argued Mr. Boerner's evidence had not established a defective condition specific to Pall Mall cigarettes, but instead had shown only the effects of cigarettes in general.(fn48) The Eighth Circuit disagreed with this contention and concluded that the jury heard sufficient evidence relating specifically to the Pall Mall brand to support the jury's finding of a design defect.(fn49) Judge Wollman, again writing for the court, noted the expert testimony presented at trial established that the levels of carcinogenic tar in Pall Mall cigarettes exceeded levels found in all other brands and that a reduction in the amount of tar could have reduced smoking-related health risks.(fn50) The court also noted evidence that showed the filter technology in Pall Mall cigarettes was ineffective and actually increased the level of tar taken into the lungs.(fn51)

With respect to the punitive damages award, B & W argued for reversal based on the district court's refusal to instruct the jury as to the evidence it could consider when calculating the award.(fn52) The court rejected this argument, reasoning that the district court properly instructed the jury.(fn53)

B & W also contended the punitive award should be reduced because the amount of $15 million was...