Mo. appeals court throws out $20M award against tobacco company

KANSAS CITY, Mo. (AP) -- A state appeals court has thrown out a $20 million jury award against Brown & Williamson Tobacco Corp. but narrowly agreed there was enough evidence that the company had tried to hide the dangers of smoking from the public.

In a 2-1 decision released Tuesday, a three-judge panel with the Missouri Court of Appeals' Western District upheld the verdict against Brown & Williamson in a case filed by the family of a woman who died after smoking Kool brand cigarettes for almost 50 years.

But the panel intends to send the case back for retrial on the issue of punitive damages, saying it was unclear what evidence jurors used to develop the $20 million figure, the largest tobacco jury award in state history.

Whether that will happen is unknown, however, because the dissenting member, Judge James Smart Jr., said he would use his prerogative to send the case to the Missouri Supreme Court, saying he believed the entire case should be thrown out.

In upholding the verdict, the majority said jurors received evidence of intentional wrongdoing by the company.

"B&W had an active process of creating controversy regarding the health risks of smoking and planned to dispute every Surgeon General's report, regardless of what it was based upon," Judge Robert Ulrich wrote in the majority opinion. "Further, B&W had policies of preventing harmful information from becoming available to the public and established procedures to ensure negative information did not reach the public. This rises to the level of clear and convincing."

Kenneth McClain, attorney for the family of Barbara Smith, who died of a heart attack in 2000, welcomed the ruling, saying that unless the state Supreme Court overrules the appellate decision, Brown & Williamson could face a jury asked to award damages with no way to defend itself.

"It's like Barry Bonds playing T-ball," McClain said Wednesday. "Here, they cannot blame the victim. All the jury will be able to hear is how terrible Brown & Williamson is and how they've killed people and how much is that worth?"

Attorneys for the tobacco company didn't immediately return a phone call for comment Wednesday.

Smith's husband and children filed the lawsuit after her death at age 73. Smith, of Lee's Summit, stopped smoking in 1990 but continued to suffer from heart and lung disease.

Smith had sued Brown & Williamson in 1996, but a federal court sided with the company on some of her claims and she died before the rest could come to trial. The case was later dismissed.

In February 2005, jurors awarded the family $2 million in compensatory damages, although the award was reduced to $500,000 because jurors determined Smith was responsible for 75 percent of her own death. An additional $20 million in punitive damages was awarded.

The tobacco company appealed for a host of reasons, the chief one being that the family's lawsuit involved many of the same issues decided in the company's favor in the earlier litigation.

Ulrich and consenting Judge Harold Lowenstein said Missouri's wrongful-death laws were aimed at compensating bereaved plaintiffs and allowing the family's suit to go forward complied with that goal.

Smart disagreed, saying the decision violated the plain language of the state statutes.

"Why would a (defendant) wish to voluntarily settle a tort claim with the tort victim when there may be a death case filed later, after the death?" he asked. "Why not keep the personal injury claim in protracted litigation until the injury victim has passed away? Then the defendant can begin to determine the potential exposure on the claim."

Most of the lengthy decision focused on the punitive damages, which relied heavily on testimony by tobacco industry insider Dr. Jeffrey Wigand, a former director of research at Brown & Williamson.

Wigand testified that the company added menthol to its Kool brand cigarettes to cover up the product's irritating smell and taste and so the smoker would inhale the smoke deeper into their lungs.

He also said that while he worked for the company, he was told not to write anything down that could later be used in court and that inflammatory information was typically removed from meeting minutes before they were handed out within the company.

The appeals court said this provided sufficient evidence for jurors to order punitive damages under a claim the company was negligent for creating a defective product.

The judges said there wasn't enough evidence to support the other charges used by the jurors to support punitive damages -- negligence for not warning smokers of the risks of smoking and negligence for designing a defective product.

But because jurors mentioned all three claims in their punitive damage award, the appeals court said the case needed to go back to trial on the single claim.