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Rose v. Brown & Williamson Tobacco Corp.9/29/2005
ppeals held that entitlement to both compensatory and punitive damages in a libel case must be shown by clear and convincing evidence. The Court in Greenbaum concluded that the fact that the standard for punitive damages in libel changed with the standard for compensatory damages indicated that the requisite standard for punitive damages was not fixed at clear and convincing evidence, but was the same standard as the underlying claim. (979 F.Supp at 982).
The holdings in Roginsky, Camillo, and Orange and Rockland Utilities are not inconsistent with this rule. Rather, those cases can be read as carving out a special exception to the rule articulated in Greenbaum. As noted above, each of those cases turned on the issue of whether the conduct of a corporate defendant's employee could be imputed on the corporate defendant for the purposes of awarding punitive damages against that defendant. In such cases, there is a high risk that a corporate defendant may be punished for conduct it did not intend or sanction. Accordingly, a higher standard of proof would be appropriate in those cases to avoid those risks. The rule articulated by the Court of Appeals in Cleghorn, upon which these cases rely, reflects that concern. (Supra p. 18.)
When there is no question that officers or directors with decision making authority directed or sanctioned the alleged tortious conduct, this risk is not present. Accordingly, no such rule is needed. For example, in Corrigan, establishing entitlement to punitive damages did not turn on whether a corporation was liable for a tort on a theory of respondeat superior, but instead on whether a defendant corporation itself had acted with malice when it published a libelous novel. (228 NY at 66-67.) As such, there was no risk that defendant would have been punished for the unauthorized acts of an employee. Like Corrigan, there was no dispute in the instant case that the alleged tortious acts were directed or sanctioned by officers of defendants Phillip Morris USA, Inc. and Brown and Williamson Tobacco Corporation. Accordingly, the heightened protection of the "clear and convincing" standard is not applicable.
Defendants argued that, regardless of the Court of Appeals ruling in Corrigan, this court is bound by the clear language of the Appellate Division, First Department in Sladick and Camillo, which states that punitive damages awards must be supported by "clear, unequivocal and convincing evidence." (226 AD2d at 264; 185 AD2d at 194.) However, as noted above, the Camillo Court's use of the "clear and convincing" evidentiary standard arose out of circumstances in that case not present here, and is thus not controlling in the instant case. In Sladick, the Court cites Camillo for the proposition that entitlement to punitive damages must be established by clear and convincing evidence. (226 AD2d at 264.) However, the decision simply states that plaintiff had not established entitlement to punitive damages and offers no details on the issue. (Id.) Specifically, it makes no mention of whether a punitive damages award was sought against defendant corporation for acts of its employee. Thus, it is impossible to tell whether the Appellate Division, First Department simply applied the rule because the facts were similar to those in Camillo or that it intended to broaden the "clear and convincing" evidentiary standard to all punitive damages cases. If this court were reading Sladick in a vacuum, it might be convinced that "clear and convincing" evidence was the only applicable standard on the issue of punitive damages. However, in light of the differing Court of Appeals decisions discussed above, as well as the lack of any detail in the Sladick decision on the punitive damages issue
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