Reynolds American Faces Landmark Verdict: $200 Million Awarded in Lung Cancer Lawsuit

BOSTON (AP) — Reynolds American is facing a nearly $200 million jury verdict award following the conclusion of a Massachusetts lawsuit involving the estate of a woman who died from lung cancer in 2018. The Boston jury awarded $24.3 million in compensatory damages, with $5 million going to each of Rita Jones’ five adult children, and an additional $150 million in punitive damages.

However, it is likely that the punitive damages will be reduced significantly, if not disallowed, during the appellate stage. Similar cases involving Engle progeny lawsuits in Florida have seen substantial reductions in punitive damages since 2000.

Reynolds declined to comment on the pending litigation related to the case. The company inherited legal liabilities from Lorillard Tobacco of Greensboro as part of its acquisition of the company in 2015.

Legal analyst Christopher Growe stated that the U.S. Supreme Court has established a clear standard for punitive damage awards, typically limiting them to single-digit multiples of compensatory damages. Previous high-profile cases have resulted in significant reductions or complete disallowance of punitive damages.

In 2002, a Los Angeles jury initially awarded $26.8 billion in punitive damages in a lawsuit involving Philip Morris USA. However, this amount was later reduced to $26.8 million and ultimately set aside by an appellate court.

Reynolds faced a $23 billion punitive damages award in a Florida case in 2014, but this was drastically reduced to $16.9 million by a judge in 2015, matching the amount awarded in compensatory damages.

Jones, the plaintiff in the recent case, reportedly began smoking at the age of 16 after receiving free samples of Newport menthol cigarettes. She developed metastatic lung cancer in 2015 and passed away three years later. Attorneys for the Jones estate argued that her addiction to Newport cigarettes contributed to her illness and ultimately resulted in her death.

The jury in this case determined that Lorillard had breached the implied warranty of merchantability by selling defectively designed Newport cigarettes, which contributed to Jones’ death. The jury verdict placed 97% of the responsibility on Reynolds and 3% on Jones, with her medical costs totaling $675,000.

Reynolds’ parent company, British American Tobacco Plc, disclosed in its annual financial report that as of December 31, 2022, Reynolds, Lorillard, and Brown & Williamson had been served 665 pending Engle progeny cases.

Engle progeny lawsuits emerged following a 2006 decision by the Florida Supreme Court that decertified a class-action lawsuit filed by Howard Engle. This ruling limited former class members to filing individual lawsuits stating that cigarettes caused their respective illnesses.

During the past few years, Reynolds has been involved in multiple Engle progeny lawsuit trials, with plaintiffs winning 21 out of 41 cases. The combined compensatory damages awarded in these trials amounted to $65.4 million, with an additional $159.5 million in punitive damages.

Reynolds has appealed 13 of the jury awards, effectively halting the payment of damages. However, three plaintiff victories can no longer be appealed.

Reynolds continues to win the majority of tobacco-related litigation claims that go to trial, apart from the Engle progeny cases. The company believes its successful defense in previous tobacco-related lawsuits will continue in the future.

In summary, Reynolds American faces a nearly $200 million jury verdict award in a Massachusetts lawsuit involving the estate of a woman who died from lung cancer. While punitive damages are likely to be significantly reduced, if not disallowed, at the appellate stage, the compensatory damages amount to $24.3 million. Reynolds inherited legal liabilities from Lorillard Tobacco and has been involved in multiple Engle progeny lawsuit trials, winning the majority of them.