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Archive for Tuesday, January 13, 2004

Tobacco company appeals damages to Kansas smoker

$15 million too much, R.J. Reynolds Co. says

January 13, 2004

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— The R.J. Reynolds Tobacco Co. asked a federal appeals court Monday to toss out a $15 million judgment awarded to a Kansas smoker in a case experts say is unusual because the punitive damages were calculated by a judge, not a jury.

Arguing before a three-judge panel of the 10th U.S. Circuit Court of Appeals, Robert Klonoff said the judge awarded David Burton far too much money after concluding R.J. Reynolds fraudulently concealed information under a law that didn't apply in Kansas.

"There is not one shred of evidence that the punitive damages related to the alleged misconduct in Kansas," Klonoff said.

Burton, 69, sued R.J. Reynolds and the American Tobacco Co. in 1995, saying the companies knew from the early 1950s that cigarettes were addictive and dangerous but kept the knowledge secret for financial reasons. Burton later dropped his claims against American Tobacco, which was ordered to pay him $1,984 in damages.

The Kansas City, Kan., man quit smoking in 1993 after his legs were amputated due to peripheral vascular disease, which narrows the arteries.

A federal jury in February 2002 found R.J. Reynolds liable for Burton's injuries. It awarded him $196,416 but also authorized further damages.

A few months later, U.S. District Judge John Lungstrum awarded Burton $15 million, saying the tobacco company's concealment of how addictive cigarettes could be was "particularly nefarious."

It was the first time a judge rather than a jury had ordered punitive damages against a tobacco company, according to the Tobacco Products Liability Project based at Northeastern University in Boston.

Project attorney Edward Sweda said that was significant because a judge's ruling could carry more weight on appeal than a jury's determination of damages. Many large awards decided by juries in other tobacco lawsuits have been reduced by appeals courts.

The case is also among the first in which a federal appeals court will test new standards set by the U.S. Supreme Court to calculate punitive damages, Klonoff said.

In an April 2003 case, the Supreme Court threw out a $145 million punitive damage award stemming from a car accident. The ruling said courts have to ensure punishment is reasonable and proportionate to the amount of harm.

Klonoff said R.J. Reynolds' payments to the state of Kansas under a 1998 multistate settlement were enough to deter corporate misconduct.

The appeals court did not indicate when it would issue a ruling.

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