California high court limits immunity for big tobacco.

The California Supreme Court has upheld a state statute that created a 10-year immunity period for tobacco companies. (Myers v. Philip Morris Cos., Inc., 50 P. 3d 751 (2002).) But the court declined to make immunity retroactive and, in a companion case, immediately narrowed the scope of immunity. (Naegele v. R.J. Reynolds Tobacco Co., 50 P.3d 769 (2002).)

Tobacco companies are claiming victory, but plaintiff attorneys say that immunity will have little effect because most smokers' claims are based on tobacco companies' conduct before the immunity period began.

California lawmakers passed legislation effective January 1, 1988, that gave tobacco companies immunity from products liability suits filed by smokers. The law, commonly called the "immunity statute," was based on the theory that there should be no liability for products that are "inherently unsafe" and are known to be so by the ordinary consumer.

Ten years later, state legislators passed the "repeal statute," which removed tobacco products from the immunity statute's list of "inherently unsafe" products.

The case that led to the supreme court's rulings was brought by Betty Jean Myers, who smoked cigarettes from 1956 to 1997. In 1998, she was diagnosed with lung cancer and sued Philip Morris, R.J. Reynolds, and Brown & Williamson in state court. The manufacturers removed the case to federal district court, which dismissed it under the immunity statute. Myers died in 2000, but her sons appealed, arguing that the repeal statute should be applied retroactively, eliminating immunity in all tobacco cases. The Ninth Circuit asked the California Supreme Court for an advisory opinion.

The court ruled that applying the repeal statute retroactively to the 10-year immunity period would violate the constitutional ban on ex post facto laws--unless there was clear legislative intent to make the law retroactive. The court could find no such intent and held that tobacco manufacturers are immune from products liability claims based on their conduct from 1988 to 1998.

But the court also ruled that tobacco companies are not shielded from lawsuits based on conduct falling outside that period. It allowed the part of Myers' claim that was based on the manufacturers' actions from 1956 to 1988 to proceed under general tort principles.

The manufacturers argued that if the repeal statute were not retroactive, it could not remove any protection conferred by the immunity statute. That statute purported to extend immunity even for conduct occurring before its effective date, the industry claimed, because it applied to "all product liability actions pending on, or commenced after" the effective date. But Justice Joyce Kennard wrote for the majority that the repeal statute simply "restored the law" to what it had been before the immunity statute was passed.

Tobacco companies believe the Myers decision will help them overturn earlier damages awards to plaintiffs in California courts. R.J. Reynolds associate general counsel Seth Moskowitz cited a March 2000 verdict against the company and codefendant Philip Morris in Whitely v. Philip Morris Cos., Inc.--the first for a person who began smoking after 1969, when the surgeon general's warning began appearing on cigarette packs. (No. 303184 (Cal., San Francisco Super. Ct. Mar. 20, 2000).)

"The Whitely verdict should be overturned, because evidence from the 10-year immunity period was erroneously admitted," Moskowitz said. He added that there are at least two other California cases in which the courts "wrongly interpreted the repeal statute as retroactive."

Richard Daynard, chair of the Tobacco Products Liability Project at Northeastern University School of Law in Boston, said it is "doubtful" that tobacco verdicts will be overturned because of Myers. "The ruling excludes only a small amount of evidence," he said. "Most evidence in tobacco cases is pre-1988, because after that, the industry became more careful about how to write memos."

In the companion ruling in Naegele, the court held that the immunity statute does not protect tobacco companies from liability for harm caused by cigarette additives. Immunity is based on the inherent and well-known dangers of nicotine, Kennard wrote, and it does not apply to "something not inherent in the product itself."

Moskowitz called Naegele "a dead end" because "cigarette companies don't add anything to cigarettes that would increase their inherent risks."

But Daynard said the ruling could be significant because one common cigarette additive is ammonia. "While ammonia is not necessarily an inherently dangerous product, the general understanding is that ammonia is added to cigarettes to make the nicotine in them more addictive," he said. "The industry has argued that ammonia is added for taste, but how many cooks do you know who add floor clever for that extra zing?"