"Today we're here to decide how much -- how much -- these defendants should be punished," Searcy Denney's Greg Barnhart told the jury in closing the punitive damages phase of Piendle v. R.J. Reynolds.
"Was it a well-executed strategy? You know under the evidence that it was. And how do we know that? Because they said it was. It was their strategy, and that was a strategy that was designed for years. Not just for a day. Not for a week, not for a month. For years. And did they do it well? Oh, did they do it well. They doggone did it well. They did it well for years and years and years and they congratulated themselves, on how beautifully it was designed and executed. So -- the degree of misconduct: was it willful? You bet it was. There's no doubt about that..."
"You cannot, as a business strategy, try to hurt people. You cannot care less whether what you sell addicts people and kills them. You cannot do that."
Mr. Barnhart suggested a number of different measures of damages. For example, suggested Mr. Barnhart, if Reynolds' net worth was at least $6B, as its CFO had testified, then 1% would be $60M. Mr. Barnhart also considered net annual after-tax profit, noting that Reynolds had accumulated $64M of net after-tax profit during the 26 days of the trial, and the value of a year of life, noting that Mr. Piendle's life had been shortened by 23 years. "What kind of award -- what kind of punishment -- will make them stop -- will punish them and deter them from making bad acts again?"
For the defense, Jones Day's Peter Biersteker told the jury that a punitive damage award to deter the tobacco companies from making an unsafe product was not appropriate, because there could be no safe cigarette. "They can't be made safe," said Mr. Biersteker, "but that doesn't mean they are unreasonably dangerous and defective. All conventional cigarettes, as you know, are capable of causing lung cancer and have the potential to addict. Again, that doesn't mean they are defective. Cigarettes are not defective and unreasonably dangerous just because they have inherent risks that you can't do anything about. Rather, a defect is something that Reynolds is capable of fixing, and didn't, while still having a product that is acceptable to consumers..."
"Mr. Barnhart was up here," Mr. Biersteker reminded the jury, "and he said that R.J. Reynolds tobacco company, and I assume by extension Philip Morris, could have cared less about unreasonably dangerous and defective products. Well let's talk about that...Reynolds was the first to publish the identities of between one-half and one-third of the known constituents of cigarette smoke. They rapidly reduced tar and nicotine yields as urged by the public health community throughout the entire time that Mr. Piendle smoked -- in fact, throughout the entire time he was alive..."
"And Mr. Barnhart said, when he was up here, 'Golly, would the world have been different if the tobacco companies had only cooperated with the government with respect to the nature and the design of their products?' He seems to have forgotten that for ten years they did precisely that with the National Cancer Institute's 'Less Hazardous Cigarette Program.' Did that result in a safe cigarette? No, because it can't be done...[T]hey collectively financed basic medical and scientific research on the diseases associated with smoking through the American Medical Association and other institutions...and you heard the testimony that the recipients of that funding included Nobel prize winners, resulted in thousands of publications in peer-reviewed literature..."
"Reynolds believes that its potential is all about health and safety," said Mr. Biersteker, and he described a number of current safer or smoke-free tobacco alternatives. "So as you have seen, the present R.J. Reynolds, for a long time now, is committed to producing cigarettes under its harm-reduction strategy, recognizing that they cannot succeed in making any cigarette safe...Mr. Barnhart, I think, said in his closing a few minutes ago, that this is your opportunity to put an end to misconduct. And I would suggest to you that the evidence...is not something that needs deterrence..."
Mr. Biersteker suggested that if the jury were considering a punitive damage award, the numbers suggested by Mr. Barnhart were unreasonable. "I think they are unreasonable given that cigarettes are legal, even though they are dangerous; given that cigarettes are dangerous by nature, not by design, and the efforts that these companies, and Reynolds in particular, has made to try to reduce the risks; given my client's current conduct...given that any award of punitive damages in this case would be above and beyond the compensatory damages that you have already awarded and that you have decided will make Mrs. Piendle whole; given that this is but one of many cases pending against Reynolds, or cases that could be brought by other members of the Engle class concerning actions taken decades ago by people who are no longer with R.J. Reynolds; given that each and every one of the Engle class members has the same opportunity to seek compensatory and punitive damages in cases just like this one...I suggest that the evidence in this case does not warrant the imposition of punitive damages. But I realize you might disagree with me. It's happened before. And if you do, let me suggest an amount...$900,000..."
In a fiercely contested closing rebuttal, Searcy Denney's Jack Scarola challenged the jury to consider whether the health disclaimers on the R.J. Reynolds website constituted an attempt to educate the public or were only for show. "Is this a changed company? Or is it the same company, with the same priorities. Profit over safety. Deception over truth. Marketing means more than people's lives."