By Philip Carrizosa
        
For most attorneys, getting in the door to argue a case before the California or U.S. supreme courts would be a high point of their legal careers.  But Kentfield attorney Daniel U. Smith did his best to get out the door, and last week he succeeded.

Smith, an appellate specialist, persuaded the California Supreme Court to dismiss review of a case the court agreed to hear less than five months earlier.

The case, Henley v. Philip Morris USA, S123023, was an important one, the first to award compensatory and punitive damages against a tobacco company in California and, significantly, become final.

Originally, a San Francisco jury in 1999 awarded $50 million in punitive damages on top of $1.5 million in compensatory damages against Philip Morris for targeting teenagers in its advertising - and, in the case of Patricia Henley, causing her to start smoking at age 15 and eventually to become addicted to Marlboro cigarettes and develop lung cancer.

Superior Court Judge John Munter reduced the punitives to $25 million, which was upheld on appeal in 1991. But then the state Supreme Court ordered the appeal court to reconsider, in light of its two recent decisions on tobacco company liability.

The appeal court found no reason to change its conclusion and affirmed a second time in March 2003. Again, the state high court ordered reconsideration, this time in light of the U.S. Supreme Court's decision putting limits on punitive damage awards, State Farm Mutual Auto Ins. v. Campbell, 538 U.S. 408 (2003).

This time, in September 2003, the appeal court reduced the punitive damage award to $9 million, a 6-1 ratio that is greater than the Supreme Court's general 4-1 ratio. The appeal court justified the higher ratio based on the "extraordinarily reprehensible conduct" of Philip Morris in marketing cancer-causing cigarettes to vulnerable minors such as Henley.

The reduction to $9 million was a tough loss for Henley, but pretty much unavoidable given Campbell.

Meanwhile, Philip Morris still wasn't satisfied and appealed to the state Supreme Court a third time, contending the appeal court ruling wasn't consistent with Campbell and that the award should be reduced further or overturned entirely.

In late April, the court granted review and ordered the case held until it could decide a related punitive damages issue in Simon v. San Paolo U.S. Holding Co., S121933.

Usually, when a case is given "grant and hold" status, it remains on the shelf until the court decides the lead case. The held case is simply remanded to the appeal court for reconsideration in light of the lead case. So Henley's case faced yet another year of waiting to see what would happen next.

Ironically, however, Philip Morris decided to press its luck and asked the court to take the Henley case off the shelf and treat it as an active case, which would have meant full briefing, oral arguments and an opinion.

In response, Smith filed his own motion to dismiss review or, in the alternative, to go ahead and give the case active status. In his motion, Smith really pushed the idea that the issues in Henley differed from those in either Simon or Johnson v. Ford Motor Co., S121723, another punitive damages case.

In those matters, Smith argued, involved whether the constitutionality of punitive damages may be measured in comparison to the defendant's profits or the plaintiff's lost profits. Henley's case did not turn on either issue, and her punitive damages rested not on Philip Morris' profits or any lost profit by Henley, but only on the $1.5 million in compensatory damages for her personal harm.

Furthermore, Smith contended, the appeal court properly applied Campbell so there was no important question of law for the Supreme Court to decide.

After mulling over the matter for a couple of month, the court voted at its Wednesday conference to reverse its "grant and hold" order and to dismiss Henley.

Smith said Thursday that he was "ebullient" with the court's action, which gives his client back her $10.5 million judgment, plus interest.

He has appeared before the state high court four times and is scheduled to appear again next month in Elsner v. Uveges, S113799, as well as later in Kinsman v. Unocal Corp., S118561. So he has no regrets about missing another appearance with Henley.

And, he said, he will ask the state Supreme Court to republish the appeal court opinion in Henley. That opinion was automatically wiped out when the high court granted review, but Smith says that ruling provides a useful guidepost for handling future tobacco cases.

        "It would be in interest of judicial economy to have it published," he said.
      
Attorneys for Philip Morris referred calls to the company. A Philip Morris spokesman said Thursday that the tobacco giant will appeal to the U.S. Supreme Court.
  
But thus far, the U.S. Supreme Court has shown no inclination to revisit the issue of punitive damages, denying several punitive damage petitions during the past term. The Campbell case itself is back at the door after the Utah Supreme Court reduced the punitive damage award from $145 million to $9 million, a 9-1 ratio, citing State Farm's "callous" and "deceitful" conduct in refusing to settle an auto accident suit against one of its customers. Campbell v. State Farm, 2004 UT 34 (2004).

State Farm has filed a petition for a writ of certiorari, and the high court may well act it on at the start of its term Sept. 27, State Farm Mutual Auto Ins. v. Campbell, 04-116.

Thus, the saga of the Henley case is over in California and may soon be over entirely.

© 2004 Daily Journal Corporation. All rights reserved.