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Rose v. Brown & Williamson Tobacco Corp.9/29/2005
se and the trial court would set it aside.
In light of the fact that evidence of a defendant's wealth was relevant to the determination of a punitive damages award, and that safeguards existed that minimized any prejudice the jury may have had against large, wealthy corporations, the court found this argument to be without merit. Accordingly, the portion of defendants' motion that seeks to exclude all evidence of their financial condition from the punitive damages phase of the trial was denied.
Defendants made an alternative application for an order restraining plaintiffs' counsel from arguing that the award should be enhanced on the basis of defendants' wealth, and a cautionary instruction to the jury concerning the consideration of wealth as a factor in the punitive damages award. Defendants proposed that the following instruction be given to the jury:
You may not impose on Defendants a larger punishment than you otherwise would think appropriate simply because they may be large corporations with substantial net worth, income, profits or revenues. You may not increase the award above the amount that is otherwise justified under the Instructions I have given you, simply because you believe that the defendants have substantial assets and could afford to pay more.
As noted above, a defendant's wealth is a relevant and material consideration in fixing a punitive damages award, and indeed a punitive damages award may be enhanced or reduced based upon a defendant's financial condition. The above instructions, and the proposed limitation on plaintiffs' counsel, would have confused the jury and obscured the importance of defendants' wealth in their deliberations. Accordingly, the court did not issue either the order or the instruction.
At the commencement of the third phase of the trial, defendant Philip Morris USA Inc. moved to limit the introduction of financial evidence to the financial condition of defendant within the State of New York. The court denied this motion and ruled that the appropriate consideration was the net worth of defendant. In New York, the relevant financial information on the question of the amount of a punitive damage award is defendant's net worth. (Rupert, 48 AD2d at 272). There is no rule that would limit the jury's consideration to wealth held in state. While the Supreme Court in State Farm held that out-of-state conduct that has no nexus to the harm suffered is inadmissible on the question of entitlement to punitive damages (State Farm 538 US at 421-422), it did not prohibit consideration of a defendant's out-of-state wealth in fixing the amount of a punitive damages award. Indeed, there was no risk that the jury would have chosen to award punitive damages based upon defendant Philip Morris USA, Inc.'s out-of-state wealth, because that evidence would not have been before the jury when it determined that defendant was liable for punitive damages. The jury would not hear evidence concerning wealth until the third phase of the trial, when the jury was to determine the amount of punitive damages to be awarded.
The foregoing constitute decisions and orders of this court and supplements these five decisions rendered from the bench as set forth in the transcripts of the trial of this matter.
Karen S. Smith, J.S.C.
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