# Petition for Writ of Certiorari — Philip Morris USA, Inc. v. Accord (No. 07-806) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_0401%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2007 ## Text Supreme Court, U.S. Tbe FILED 07-806DEC17 2007 ( O) OFFICE OF THE CLERK PHILIP MoRRIS USA INC., BROWN & WILLIAMSON HOLDINGS, INC., LORILLARD TOBACCO COMPANY and R.J. REYNOLDS TOBACCO COMPANY, Petitioners, Vv. RONALD ACCORD, et al. Respondents. On Petition for a Writ of Certiorari to The Supreme Court Of Appeals Of West Virginia PETITION FOR A WRIT OF CERTIORARI ANDREW R.C. GADDES ANDREW L. FREY BRUCE CLARK Counsel of Record Dechert LLP ANDREW H. SCHAPIRO 2929 Arch Street LAUREN R. GOLDMAN Philadelphia, PA 19104 KWAKU A. AKOWUAH 215) 994-4000 Mayer Brown LLP 1675 Broadway New York, NY 10019 (212) 506-2500 Counsel for Petitioner Philip Morris USA Inc. (Additional counsel listed on inside cover) FIRST A TT ALTARS EE ECL TE TOPE SEITE EE SEL AEA GPL BET EE AE LATE OBE JOHN R. MUSGRAVE DONALD B. AYER Thompson Coburn LLP Jones Day One US Bank Plaza 51 Louisiana Ave., N. W. St. Louts, MO 63101 Washington, D.C. 20001 (314) 552-6000 (202) 879-3939 Counsel for Petitioner Counsel for Petitioners Lorillard Tobacco Co. R.J. Reynolds Tobacco Co. and Brown & Wil- liamson Holdings, Inc. l QUESTION PRESENTED Whether the Due Process Clause bars the use of “reverse bifurcation” in a consolidated mass-tort trial, whereby a defendant's liability for punitive damages to hundreds of plaintiffs is adjudicated, based entirely on aggregate proof, prior to any find- ing of compensatory liability to even a single plain- tiff. li RULE 14.1(b) STATEMENT Petitioners are Philip Morris USA Inc., Brown & Williamson Holdings, Inc., Lorillard Tobacco Com- pany and R.J. Reynolds Tobacco Company. Respon- dents are Ronald Accord and all other plaintiffs in the case styled In re: Tobacco Litigation, Civil Action No. 00-C-5000, Ohio County, West Virginia, as well as the Honorable Arthur M. Recht in his capacity as judge/special appointee of the West Virginia Mass Litigation Panel. There are approximately 735 plaintiffs in Civil Action No. 00-C-5000, and no cap- tion in this proceeding identifies those individuals. Petitioners have included as an appendix to this pe- tition an unofficial list of the plaintiffs subject to the challenged trial order who have named one or more of the petitioners as a defendant. See App. 77a-109a. Twenty other defendants are subject to the chal- lenged trial order, but were not parties to the writ of prohibition proceeding in the Supreme Court of Ap- peals of West Virginia. Petitioners also have in- cluded as an appendix to this petition an unofficial list of these defendants. See App. 110a-11 1a. RULE 29.6 STATEMENT Petitioner Philip Morris USA Inc. is a wholly owned subsidiary of Altria Group, Inc. Altria Group, Inc. is the only publicly held company that owns 10% or more of Philip Morris USA Inc.’s stock. Altria Group, Inc. is a publicly held company. No publicly held company owns 10% or more of Altria Group, Inc.'s stock. Petitioner Brown & Williamson Holdings, Inc. is an indirect, wholly owned subsidiary of British American Tobacco, p.l.c., a publicly traded corpora- tion. Before August 2, 2004, Petitioner was known as Brown & Williamson Tobacco Corporation. On July lll 30, 2004, a transaction was completed whereby Peti- tioner R.J. Reynolds Tobacco Company became the successor in interest to Brown & Williamson Tobacco Corporation’s U.S. tobacco business. Petitioner Lorillard Tobacco Company is wholly owned by Lorillard, Inc., which is wholly owned by Loews Corporation. Shares of Loews Corporation are publicly traded. Other subsidiaries of Loews Corpo- ration that are not wholly owned by Loews Corpora- tion but have some securities in the hands of the public are CNA Financial Corporation and Diamond Offshore Drilling, Inc. In addition, Loews Corpora- tion indirectly owns 100% of the general partner of Boardwalk Pipeline Partners, LP, whose subsidiar- ies, Boardwalk Pipelines, LP and Texas Gas Trans- mission, L.L.C., have issued bonds that are publicly owned. Loews Corporation has also issued Carolina Group stock, a publicly traded tracking stock. Petitioner R.J. Reynolds Tobacco Company, a North Carolina corporation, is the successor by merger to R.J. Reynolds Tobacco Company, a New Jersey corporation. The existing R.J. Reynolds To- bacco Company is an indirect, wholly owned subsidi- ary of Reynolds American Inc., a publicly traded cor- poration. Petitioner Brown & Williamson Holdings, Inc. owns approximately 42% of the common stock of Reynolds American Inc. As noted above, Brown & Williamson Holdings, Inc. is an indirect, wholly owned subsidiary of British American Tobacco, p.l.c., a publicly traded corporation. 1V TABLE OF CONTE™TS Page RPE) ae CAGE POR GD soos ci sccccenceasinsndsvornsnwidesneee i BOAT ales WR. RO ET NB isnt sais ners cnscdecscegnenacns ll Be Oe BSF 0 EY Eis sknccs naive scvessenannansncacennaaee ll BPs OO FU oa vassiksnsnecsnceapcsancenccnaaeanss vil FEF EIRP RI Be BERIT oi iniscnctcaviesscssncvunsnensssconsneaidincane 1 PTT OI a egascisansc resndarastornncnieancn antennas 1 CONSTITUTIONAL PROVISION INVOLVED ........ 1 ee Oe eG side cick caeepsakenatnandiatagcaiaecnssouae 2 REASONS FOR GRANTING THE PETITION ....... 11 I. WEST VIRGINIA’S APPROACH TO ASSESSING PUNITIVE DAMAGES VIOLATES DUE PROCESS. ......c.cccccccscsscssscsessees 12 A. West Virginia’s Approach Cannot Be Reconciled With State Farm And PP occ irssciniay ce eer ee 12 1. The Phase I Jury’s Findings Will Not Bear A Sufficient Nexus To The Conduct That Harmed Any eg ae gl: A Ee ar ner 13 2. The Application Of A Uniform Multiplier To Disparately-Situated Plaintiffs Violates Due Process................. 18 B. The Decision Below Conflicts With Rulings Of The Second Circuit And CI CN io og cece cic de eee 20 Vv TABLE OF CONTENTS—continued Page(s) Il. THIS COURT SHOULD GRANT REVIEW IN ORDER TO HALT WEST VIRGINIA’S REPEATED AND UNCONSTITUTIONAL USE OF REVERSE BIFURCATION TO RESOLVE AGGREGATED PUNITIVE- DAMAGES CLAIMS IN MASS-TORT ec. RENE Bel ae ve ear er 24 A. The West Virginia Supreme ~e of Appeals Has Made Clear That It Will Continue To Place Expediency Over Concerns Of Due Process In Mass-Tort NEI EEE ATED Ore Ono RCO ERE TREN 24 B. Immediate Review Is Warranted................... 30 era I fico ol cick a sesisagnindouaiennekevseinasondd 33 APPENDIX APPENDIX A: Order of the Supreme Court of Appeals of West Virginia (November 7, 2007) ......... la APPENDIX B: Order of the Circuit Court of Ohio County, West Virginia (August 28, 2007)....... 3a APPENDIX C: Transcript of Hearing August 17, 2007 In the Circuit Court of Ohio County, To aac aba pakn ean emaenemanteaira 5a APPENDIX D: Order of the Circuit Court for Ohio County, West Virginia (August 28, 2007)...... 15a APPENDIX E: Transcript of Hearing May 23, 2007 In the Circuit Court of Ohio County, West Virginia....... a SAE ARN RADI SAR LS IS ORIEN AOR RAPE BROOD l7a v1 TABLE OF CONTENTS—continued Page(s) APPENDIX F: Opinion and Order of the Circuit Court of Ohio County, West Virginia RPI SON I acts lelteah nelisnsneiaiiad APPENDIX G: Opinion of the Supreme Court of Appeals of West Virginia (December 2, 2005).... APPENDIX H: Opinion and Order of the Circuit Court of Ohio County, West Virginia SII i, FIO tcnnrsccatnensccscceciedunassntencsscansatesiannnnnecs APPENDIX I: Case Management Order/Trial Plan of the Circuit Court of Ohio County, West Virginin Glamwary 11, ZOGO).....0......cccececccassessssaeese APPENDIX J: List of Plaintiffs With Claims Pending in Civil Action No. 00-C-5000 SND Weak TED i ctaccscatenedincacacenmnansaccucisabes APPENDIX K: List of Defendants Not Party To the Writ of Prohibition Proceeding In the Supreme Court of Appeals of West Virginia ........ Vil TABLE OF AUTHORITIES Page(s) CASES Allison v. Citgo Petroleum Corp., 161 F.3d 402 (Sth Cir. 1908)...........:06.00..ss0se00 20-21 BMW of N. Am. Inc. v. Gore, OAT UF. Te Ce, FI wankdisttsdaxiteciiccnmuans 16, 19 In re Baycol Prods. Litig., 218 F.R.D. 197 (D. Minn. 2003)..................... 22-23 Bd. of Educ. v. Super. Ct., MOO UD. BGG CE an ssccsensdancsscaccicca en 1, 30 Boyd v. Goffoli, 608 S.E.2d 169 (W. Va. 2004) ....c.cccececceccceeseseeeee. 26 In re Brooklyn Navy Yard Asbestos Litig., STi FO SSi Cle Cat... OBE) vvssscctiernicnccee 27 Cain v. Armstrong World Indus., 785 F. Supp. 1448 (S.D. Ala. 1992) ............... 27-28 In re Chevron USA, Inc., 109 F.3d 1016 (Sth Cir.1997)...........cccc-escceseseeseee 32 Clinton v. Brown & Williamson Holdings, Inc., Nos. 05 Cv. 9908, 05 Cv. 9174 2007 WL 2161778 (S.D.N.Y. July 25, 2007) ....................-. 28 Colindres v. QuietFlex Mfg., Zao FB: 347 63.3. Tee. DOO) wsctccticcsscnutiean 21 Cont’ Trend Resources, Inc. v. OXY USA Inc., 101. F.3d G34 (LOG Cir. LOBG) on neccccccccenccssscenssses,. 31 Crawford v. Taylor, 48 8.5.20 S70 CA. Va. tGG0) ote +) Vill TABLE OF AUTHORITIES—continued Engle v. Liggett Group, Inc.., 945 So. 2d 1246 (Fla. 2006) (per curiam), cert. denied, 128 S. Ct. 96 (2007) In re Ethyl Corp., 975 S.W.2d 606 (Tex. 1998) .................006 7 Page(s) Gen. Motors Acceptance Corp. v. D.C. Wrecker Serv., 647 S.E.2d 861 (W. Va. 2007)................... Hicks v. Oklahoma, 447 U.S. 343 (1980). Insolia v. Philip Morris Inc.., 216 F.3d 596 (7th Cir. 2000)..... Jackson v. State Farm Mut. Auto. Ins. Co., 600 S.E.2d 346 (W. Va. 2004)............ Johnson v. Celotex Corp., 899 F.2d 1281 (2d Cir. 1990) Kocher v. Oxford Life Ins. Co.., 602 S.E.2d 499 (W. Va. 2004) (per curiam) Lilly v. Virginia, 527 U.S. 116 (1999)...... Madruga v. Super. Ct.., 346 U.S. 556 (1954) Merrick v. Paul Revere Life Ins. Co 500 F.3d 1007 (9th Cir. 2007). Nelson v. Wal-Mart Stores, Inc., 245 F.R.D. 358 (E.D. Ark. 2007). 31-32 ix TABLE OF AUTHORITIES—continued Page(s) O’Neal v. Wackenhut Servs., Inc., No. 3:03-CV-397, 2006 WL 1469348 (E.D. FN Fs SI cisciicaniccnsencdcestcnnivernincaddaadenedaas 23 Philip Morris Inc. v. Angeletti, TEZ A.2G BOO BEG. BOOD) .0cccccccccccccessscsccessescee 20, 21 Philip Morris USA v. Williams, BEF Os Cr Be Ce Ricacccdnstscecdccscsnsesnccssonens passim Ramirez v. New York City Off-Track Betting Corp., 112 F.3d 38 (2d Cir. 1997)................ onset 32 In re Repetitive Stress Injury Litig., eo * F Ff. G5 CR: In re Simon II Litig.., 407 F.3d 125 (2d Cir. 2005) ...........0cccccccceeceeeeeees 20 State ex rel. Allman v. MacQueen, 551 S.E.2d 369 (W. Va. 2001) (per CURIID ocenntsicinsctcicdciacressentatadeniabenistevasavioiebesseubban 28 State ex rel. Appalachian Power Co. v. MacQueen, 479 S.E.2d 300 (W. Va. 1996).......... 25 State ex rel. Appalachian Power Co. v. Ranson, Ge Fe te COE. Fi BD intiskectapitasccnnnniciensnis 5 State ex rel. Chemtall Inc. v. Madden, No. 33380, 2007 WL 4098937 (W. Va. PU Sis BER nace cenaksoctadinchcunacatciadiasmatdbeviciaonadeahe 24 State ex rel. Mobil Corp. v. Gaughan, 563 S.E.2d 419 (W. Va.) (per curiam), cert. rans, GET UTES BOG Ces csc sscescsnccccnenncnsancscnsas 27 Xx TABLE OF AUTHORITIES—continued Page(s) State ex rel. Taylor v. Nibert, CGE Te. TBE CWP. VO. DOOD) oncnnscccsecssnscssescreens 5-6 State Farm Mut. Auto. Ins. Co. v. Campbell, Se i I I sack avchainsakencsnncncnsesinkdnbwoken passim In re Tobacco Litig., 624 S.E.2d 738 (W. Va. 2005)...............-..006 passim United States v. Centennial Sav. Bank FSB, ee SEED, ck prntanysadeusaccousniapnsenesanns 31 White v. Ford Motor Co., 500 F.3d 963 (Sth Cir. 2007)................s0-0ce0e. 17, 32 CONSTITUTION AND STATUTES a Ss, SAINI, TN oa cn ascendant scien ncetiatentnlcrain 23 ei, I MN FEI oo oiecs sacsdavnnscuckanadtentanenenss a 2B U.S.C. § 1257 (a) .cccccccceccescscesesceeveceseseeseeeesees ae 1 W. Va. Code § 53-L-] oeccccccccccccsssssceeeeseeseeeees esas 5 RULES i Se ee: ee | PEERS re pao PSSA TOP 30 er oe a paukaemeaataniwsabiaddanebas 28 Ve, TT I nn cccvicccsensunnsoenes Roe 28 W. VA. R. CIV. P. 42(a)......... Recnsghaemiouare tl Sabena .. 5, 28 ee >, Sy SBR ronenrrne erry 6, 28 MISCELLANEOUS X1 TABLE OF AUTHORITIES—continued Page(s) Michael P. Addair, A Small Step Forward: An Analysis of West Virginia’s Attempt At Joint And Several Liability Reform, 109 W. WR ea I TT Finbnkntad csshnaiiadatenrnacssicsascainses 25 Brian Dorsey, The Good, the Bad, and the Ambiguous: Recent Developments in West Virginia’s Class Action Jurisprudence, 107 Ws is ks Es Be OO is asnnersccdtensaeninidscccrsanss 25 Editorial, The Asbestos-Fraud Express, WALL i ag MN Be, ls FR iin iscsi tcescseccconavvececss 25 Judicial Hellhole’ Label Not Unfair, THE IN- TELLIGENCER WHEELING NEWS-REGISTER, ee ns Oe tal tees canccceenianssvanicies 25 Petition for Writ of Certiorari, Daniel Meas- urement Servs. v. Eagle Research Corp., No. 07-384, 2007 WL 2736284 (U.S. Sept. re hers era) 5saa rian tabu deebunennaatonsvicpecetin 25_ Petition for Writ of Certiorari, Mobil Corp. v. Adkins, No. 02-132, 2002 WL 32134868 er I Os essay xn paecassecanendecebiesacnans 33 Petition for Writ of Certiorari, Union Carbide Corp. v. Recht, No. 03-319, 2003 WL 22428919 (U.S. Aug. Ne ad oo aioe che sk, oa hen rae haeraamcanemios 24 PETITION FOR A WRIT OF CERTIORARI Petitioners Philip Morris USA Inc., Brown & Williamson Holdings, Inc., Lorillard Tobacco Com- pany, and R.J. Reynolds Tobacco Company respect- fully petition for a writ of certiorari to review the judgment of the Supreme Court of Appeals of West Virginia in this case. JUDGMENTS BELOW The order of the Supreme Court of Appeals of West Virginia, App. la-2a, is unreported. The under- lying order of the Circuit Court for Ohio County, App. 3a-4a, is unreported. An earlier decision of the Supreme Court of Appeals of West Virginia address- ing issues that are the subject of this petition, App. 3la-65a, is reported at 624 S.E.2d 738. JURISDICTION The order of the Supreme Court of Appeals of West Virginia denying petitioners’ petition for a writ of prohibition was entered on November 7, 2007. App. la-2a. This Court has jurisdiction to review this decision under 28 U.S.C. § 1257(a). See Bd. of Educ. v. Super. Ct., 448 U.S. 1343, 1345-46 (1980); Madruga v. Super. Ct., 346 U.S. 556, 557 n.1 (1954) (“The State Supreme Court’s judgment finally dis- posing of the writ of prohibition is a final judgment reviewable here under 28 U.S.C. § 1257.”). CONSTITUTIONAL PROVISION INVOLVED The Fourteenth Amendment to the United States Constitution provides: “nor shall any state deprive any person of life, liberty, or property, without due process of law * * *.” 2 STATEMENT The courts of West Virginia have adopted, and employ with increasing frequency, an unconstitu- tional approach to the adjudication of punitive- damages claims in mass-tort litigation. In the deci- sions below, the West Virginia courts have approved a trial plan that consolidates more than 700 separate personal-injury actions brought by individual smok- ers. The plaintiffs’ product liability and fraudulent concealment claims—similar to one another only in that each plaintiff asserts an injury related to his or her use of some tobacco product—will be tried in a three-stage proceeding. Phase I of this trial is scheduled to commence on March 18, 2008. In that proceeding, the jury will de- termine, based entirely on aggregate proof that is untethered to the injuries or experiences of any in- dividual plaintiff, certain elements of the compensa- tory liability inquiry. This jury will also determine— again without the benefit of evidence about any indi- vidual plaintiff—whether each defendant’s conduct merits punitive damages. If it answers this question in the affirmative as to any defendant, the same jury in Phase I(A) will determine a punitive damages “multiplier” for that defendant. That determination, too, will be based entirely on aggregate proof; the evi- dence will bear no demonstrated nexus to the inju- ries to any individual plaintiff, much less to those of all plaintiffs. In Phase II proceedings, different fact-finders will determine whether each plaintiff has established the remaining elements of his or her liability claims and is entitled to compensatory damages. The Phase I(A) multipler will then be used to fix the particular 3 dollar amount of punitive damages owed by each de- fendant to each individual plaintiff. The Phase I jury will thus be asked to determine whether each defendant’s conduct warrants punish- ment, and to set a single punitive-damages multi- plier for each defendant that will be applied in every follow-on case, based on a broad composite of the ac- tions of four different defendants over the course of a half century. It will do so without being told any- thing at all about the persons who allegedly were harmed by any aspect of that composite, what inju- ries those persons suffered, or whether the defen- dants are responsible for those injuries. Nor will the jury know the total amount of compensatory dam- ages the plaintiffs will eventually recover—or whether that sum will be sufficient to accomplish the State’s interest in punishment and deterrence. De- fense counsel will be wholly unable to defend against plaintiffs’ amorphous claim for punitive damages, because individual discovery has been relegated to Phase II: during Phase I, petitioners will not be able to cross-examine individual plaintiffs or present their affirmative defenses. And the Phase II juries will apply the Phase I findings to the cases of all the plaintiffs who can prove their claims for compensa- tory liability and damages—regardless of whether those individuals were harmed by the conduct that formed the basis of the first jury’s imposition of puni- tive liability and damages. West Virginia’s approach to the determination of punitive hability and punitive damages in mass-tort litigation is foreclosed by this Court’s decisions in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003) and Philip Morris USA v. Williams, 127 S. Ct. 1057 (2007). In those 4 two cases, this Court held that, because the Due Process Clause abhors the “arbitrary determination” of punitive damages, the proceedings must ensure that a jury has the information necessary to exercise its powerful discretionary authority in a rational way. Williams, 127 S. Ct. at 1062. The trial plan at issue here—which the West Virginia Supreme Court of Appeals described as a “common” feature of mass- tort litigation in that State—ensures the opposite. First, the Phase I jury will not know (i) whether the conduct it has heard about actually harmed any plaintiff; (ii) the severity of any injury that resulted; (i1) which defendants—if any--are responsible for that harm; or (iv) the total amount of compensatory damages owed to the plaintiffs by any defendant. Punishment imposed in this manner cannot possibly be grounded in the facts of the actual suit before the court, as due process requires; rather, it will inevita- bly be based upon “the merits of other parties’ hypo- thetical claims against a defendant.” State Farm, 538 U.S. at 423; see also Williams, 127 S. Ct. at 1063. The punishment will thus reflect nothing more than the jury’s view that a particular defendant is “an un- savory individual or business” with substantial fi- nancial resources—precisely the result that due process forbids. State Farm, 538 U.S. at 422-23. And because the Phase I jury will have no informa- tion about the total amount of compensatory dam- ages owed to the plaintiffs by any defendant, it can- not possibly determine whether “the defendant’s cul- pability, after having paid compensatory damages, is so reprehensible as to warrant the imposition of fur- ther sanctions.” State Farm, 538 U.S at 419 (empha- sis added). D Second, the Phase I jury’s findings will subse- quently be applied in the trials of all of the plaintiffs. Accordingly, the plaintiffs who were not harmed by the conduct that the Phase I jury found egregious will still see their proven compensatory damages en- hanced by a multiplier that is based on the defen- dant’s conduct toward other parties—a clear viola- tion of this Court’s “explicit” holding in Williams that “a jury may not punish for the harm caused others.” 127 S. Ct. at 1065. 1. On September 28, 1999, the Chief Justice of the Supreme Court of Appeals for West Virginia en- tered an administrative order consolidating all to- bacco-related personal injury suits then pending in West Virginia—more than 120 at that time—and transferring them to the Circuit Court of Ohio County for coordinated proceedings.! The court did not hold a class-certification hearing prior to aggre- gating the suits. Nor were the suits consolidated under W. Va R. Civ. P. 42(a), which would have re- quired a determination that consolidation would “promote judicial economy and convenience of the parties, and avoid prejudice and confusion.” State ex rel. Appalachian Power Co. v. Ranson, 438 S.E.2d 609, 610, Syl. Pt. 2 (W. Va. 1993) (emphasis added).? | The Circuit Court of Ohio County is a trial court. West Vir- ginia has no intermediate appellate courts. A decision of a Cir- cuit Court may be reviewed by West Virginia’s highest court, the Supreme Court of Appeals, on direct appeal. Alternatively, as in this case, a party may petition for a writ of prohibition “to restrain inferior courts from proceeding in causes over which they have no jurisdiction, or, in which, having jurisdiction, they are exceeding their legitimate powers.” Crawford v. Taylor, 75 S.E.2d 370, Syl. Pt. 1 (W. Va. 1953); W. Va. Code § 53-1-1. 2 Cf. State ex rel. Taylor v. Nibert, 640 S.E.2d 192, 197 (W. Va. 2006) (granting extraordinary writ to reverse trial court order 6 Rather, these initial 120 claims were consolidated under West Virginia’s special mass-tort procedure, Trial Court Rule 26.01, which allows consolidation on the basis of a showing that there are some “com- mon issues of law or fact” and that consolidation will lead to an “expeditious” resolution of the claims. More than 1,000 additional] plaintiffs soon joined the consolidated proceeding. Their individual suits allege 24 different kinds of injuries, including vari- ous types of cancer; cardiovascular and coronary dis- ease; periphera] vascular disease; and chronic ob- structive pulmonary disease. Moreover, the com- plaints propose widely varying theories of liability, including strict liability, megligence, breach of ex- press warranty, fraudulent concealment, and civil conspiracy. Plaintiffs allege that they used more than 200 different tobacco products—including many that were not even cigarettes—beginning at different points in time, and lasting for different durations. Thus, plaintiffs themselves claim that they were af- fected in dramatically different ways by dramatically different aspects of defendants’ alleged conduct. 2. On January 11, 2000, the trial court issued a case management order. Over petitioners’ objections, the trial court adopted the trial plan proposed by plaintiffs’ counsel. This plan provided that “[a]ll per- sonal injury tobacco cases for plaintiffs now pending, filed in, or transferred to and accepted by this Court * * * shall be included in a single consolidated trial in Ohio County ***.” App. 69a (Trial Plan § 1). The plan further ordered that a consolidated trial of hundreds of separate claims would be bifurcated consolidating plaintiffs’ claims; the claims did not arise out of the same “transaction or occurrence” merely because the plain- tiffs received the same deficient mailing from the defendant). 7 into multiple phases. In Phase I—without any con- sideration of any evidence concerning any actual plaintiff—the jury will first determine “general li- ability issues,” including whether each defendant could be held liable on a theory of fraudulent con- cealment, negligence, product defect, or warranty. The Phase I jury will also determine “entitlement to punitive damages” and a multiplier, to be uniformly applicable to all successful plaintiffs regardless of the specifics of their claims. In Phase II, “issues unique to each plaintiffs” claim for compensatory damages will be tried before different fact-finders. App. 69a- 70a (Trial Plan { 3). As the trial court’s subsequent decisions have confirmed, no individual plaintiffs claims will be tried in Phase I. Almost no plaintiff-specific discov- ery has been permitted, and the Phase I jury will not be permitted to hear evidence concerning any par- ticular plaintiffs case. That jury will not hear evi- dence or make findings, for example, regarding the reasons why any individual plaintiff began smoking, when and for how long he or she smoked, which de- _ fendant’s cigarette brands (or other tobacco products) he or she used, whether any defendant influenced his or her smoking decisions, or what he or she under- stood about the health risks of smoking. The Trial Plan relegates any plaintiff-specific inquiry to Phase II—after the decision on punishment has already been rendered, and the one-size-fits-all multiplier conclusively established. App. 70a, 74a (Trial Plan 77 3, 6G). 3. After this Court decided State Farm in 2003, petitioners asked the trial court to re-evaluate the constitutionality of the trial plan. The court vacated the plan on June 16, 2004 on the ground that asking 8 the jury to assess punitive damages in Phase I would violate defendants’ due process rights. As the court explained: This Court has read and reread Campbell in an effort to determine whether there is any conceivable manner to salvage the extant Case Management Order and still accommo- date the due process demands of Campbell to require any punitive damage award to pun- ish and deter conduct that has a specific rela- tionship to a specific injured party. It cannot be done. App. 66a. 4. At respondents’ request, the trial court subse- quently agreed to certify the following question to the West Virginia Supreme Court of Appeals: Does the Due Process Clause of the Four- teenth Amendment to the Federal Constitu- tion, as interpreted by State Farm v. Camp- bell, preclude a bifurcated Trial Plan in a consolidated action consisting of personal in- jury claims of approximately 1,000 individual smokers, wherein Phasc I of the trial would decide certain elements of liability and a pu- nitive damages multiplier and Phase II of the trial would decide for each plaintiff compen- satory damages and punitive damages based upon the punitive damages multiplier deter- mined in Phase I? App. 43a. West Virginia’s high court answered the certified question in the negative, holding that it could find “nothing in [State Farm] that per se precludes a bi- furcated trial plan in which a punitive damages mul- 9 tiplier is established prior to the determination of in- dividual compensatory damages.” In re Tobacco Litig., 624 S.E.2d at 741. Reading State Farm as a narrow decision, based on “extreme” facts (id. at 742), the court rejected the trial court’s contrary con- clusion that State Farm requires an “analysis of the defendant’s conduct vis-a-vis a specific plaintiff’ and thus “requires that the defendant’s conduct be tai- lored to each plaintiff.” Jbid. In any event, in the Supreme Court of Appeals’ view, post-verdict exces- siveness review by the trial court could cure any con- stitutional error associated with the structure of the proceedings. Id. at 743. 5. On remand, the trial court had this to say about the high court’s interpretation of State Farm: “T still don’t think I was wrong * * * when I got the’ opinion from the West Virginia Supreme Court, quite frankly, I just went back, and I said they don’t want to really hear it. * * * Now, I’m not saying they have answered the particular conundrum, maybe, that we have. I don’t think that.” 12/14/2006 Hearing Tr. at 27-28. Nevertheless, over petitioners’ objections, the circuit court reinstated the original trial plan. See 4/3/2006 Hearing Tr. at 13-15, 36, 38. Despite the court’s continuing concerns that the trial plan would not pass muster under State Farm, it made clear that it would not attempt to ensure that Phase I would be limited to purported common issues and common evidence. 12/14/2006 Hearing Tr. at 29. As a result, as respondents’ counsel has conceded, “some of the issues that we will try surely will not apply to everyone. Maybe some of them won't apply to any- one***.” 9/18/2007 Hearing Tr. at 33 (emphasis added). 10 6. On February 20, 2007, this Court issued its decision in Philip Morris USA v. Williams. Petition- ers again moved to vacate the trial plan, arguing that Williams—which held “explicitly that a jury may not punish for the harm caused others” and af- firmatively requires States to “protect against [the] risk” that juries will seek to punish the defendant for having caused “harm to others,” 127 S. Ct. at 1063, 1065—made the unconstitutionality of West Vir- ginia’s trial plan even more plain than had State Farm. The trial court denied petitioners’ motion on May 23, 2007, App. 24a, and, on August 17, 2007, re- affirmed its decision to go forward with the bifur- cated trial plan, App. 12a-14a. 7. Petitioners then filed a petition for a writ of prohibition in the Supreme Court of Appeals of West Virginia, seeking to bar the trial court from “having one jury determine a single uniform punishment (a punitive damages multiplier) for all Plaintiffs first, and having other juries determine lability, defenses, and compensatory damages for individual plaintiffs later.” Writ Petition at 1. Citing State Farm and Williams, petitioners explained that this trial plan would violate their due process rights by allowing the jury to impose punishment before petitioners’ li- ability to any claimant had been established and the extent of the compensatory damages fixed. Addi- tionally, petitioners argued that under Williams, a single punitive damages multiplier could not be ap- plied to every case because plaintiffs claim to have been injured in different ways and by different as- pects of the defendants’ conduct. As petitioners ex- plained: evidence in support of claims of concealment or failure to warn of the risks of smoking 1] cannot be the basis of punitive damages for those Plaintiffs aware either of the risks of smoking or of the facts supposedly concealed. Evidence of the so-called “Frank Statement” [an advertisement published in 1954] * * * cannot be the basis of punitive damages for Plaintiffs who never saw it—indeed, were not even born or could not yet read when the ad- vertisement was published. Evidence of other cigarette advertisements cannot be the basis of punitive damages for Plaintiffs who never saw or heeded them. * * * The list goes on and on. Writ petition at 12-13 (footnotes omitted). Given the disparate nature of the plaintiffs’ claims, and the aggregated evidence that will be ad- mitted in Phase I, petitioners also argued that there would be no way to ensure that the Phase I jury’s findings would bear the constitutionally-mandated nexus to the harm done to each plaintiff who would receive punitive damages based on those findings. The West Virginia Supreme Court of Appeals denied the petition without comment in an order dated No- vember 7, 2007, over the dissent of one justice of the court. App. la-2a. REASONS FOR GRANTING THE PETITION West Virginia’s approach to adjudicating mass- tort cases is deeply and fundamentally flawed. 3 The “Frank Statement” was a “full-page advertisement signed by the four defendant cigarette manufacturers that was pub- lished in the 448 American newspapers serving cities with populations of more than 25,000 people.” Jnsolia v. Philip Mor ris Inc., 216 F.3d 596, 602 (7th Cir. 2000) 12 Driven by the apparent desire to clear the state’s dockets of pending claims, West Virginia’s high court has adopted a “system of mass tort litigation” (see Jn re Tobacco Litig., 624 S.E.2d 738, 741 (W. Va. 2005)) that is patently unconstitutional. Under this “sys- tem,” disparate claims are consolidated and then tried in a reverse-bifurcated structure that requires the jury to assess punishment before the defendant's liability to any plaintiff has been established. This approach to the adjudication of mass-tort cases can- not be reconciled with this Court’s punitive-damages jurisprudence, both because it requires the jury to impose punishment without the information it would need to exercise its discretion in a rational way, and because due process does not permit the application of a one-size-fits-all multiplier to plaintiffs who claim to have been injured in various ways, to varying ex- tents, and by varying conduct. It is also at odds with the decisions of other courts. Despite the clear con- stitutional infirmities of this model, West Virginia employs it with increasing frequency. And because most of the defendants subjected to it are quickly forced to settle, opportunities for this Court to inter- vene are—and will continue to be—rare. This Court should grant certiorari now to bring West Virginia’s mass-tort litigation system into compliance with con- stitutional standards. I. WEST VIRGINIA’S APPROACH TO ASSESSING PUNITIVE DAMAGES VIOLATES DUE PROCESS. A. West Virginia’s Approach Cannot Be Reconciled With State Farm And Williams. West Virginia’s approach to assessing punitive damages in mass-tort cases is incompatible with this 13 Court’s punitive damages decisions, particularly State Farm and Williams. Those decisions have em- phasized that (i) punishment must be narrowly fo- cused on the defendant’s conduct toward the plaia- tiff, Williams, 127 S. Ct. at 1065; State Farm, 538 U.S. at 423; (ii) punishment may be imposed only af- ter a defendant has had a full “opportunity to defend against the charge,” Williams, 127 S. Ct. at 1063; and (iii) punishment should be imposed only when the plaintiffs proven compensatory damages are in- sufficient to serve the state’s objectives of deterrence and punishment. State Farm, 538 U.S. at 419. A trial court has an affirmative obligation to pro- tect against “an unreasonable and unnecessary risk” that a defendant will be punished for harms to par- ties other than the plaintiff, or for conduct other than that which harmed the plaintiff. Williams, 127 S. Ct. at 1065; see also State Farm, 538 U.S. at 422-23. The trial plan here does not merely fail to protect against such a risk—it guarantees that it will mate- rialize. 1. The Phase I Jury’s Findings Will Not Bear A Sufficient Nexus To The Conduct That Harmed Any Particular Plaintiff. 1. The question before the jury in Phase I will be whether each defendant engaged in conduct that warrants an award of punitive damages—which, un- der West Virginia law, means a “wrongful act” that was undertaken “maliciously, wantonly, mischie- vously or with criminal indifference to civil obliga- tions.” Gen. Motors Acceptance Corp. v. D.C. Wrecker Serv., 647 S.E.2d 861, 867 (W. Va. 2007). In State Farm, this Court made clear that any such finding must rest on the conduct that harmed the plaintiff be- fore the court. 14 A defendant’s dissimilar acts, independent from the acts upon which liability was prem- ised, may not serve as the basis for punitive damages. A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or busi- ness.*** The reprehensibility guidepost does not permit courts to expand the scope of the case so that a defendant may be punished for any malfeasance, which in this case ex- tended for a 20-year period. 538 U.S. at 422-24 (emphasis added). See also id. at 422 (to be relevant to the punitive damages inquiry, defendant’s “conduct must have a nexus to the spe- cific harm suffered by the plaintiff’). In this case, it will be impossible for the Phase I jury to evaluate each defendant's conduct toward the plaintiff before the court—because that jury will know nothing about any of the plaintiffs in this con- solidated action. The trial court has made clear that the Phase I jury will not be given any information about even a single plaintiff. The Phase I jury will thus be left to hear only a generalized, aggregated presentation about petitioners’ conduct over half a century. The suits consolidated in this case present a pas- tiche of widely varying claims brought by a broad ar- ray of West Virginia smokers. Some respondents started smoking before World War II, many others in the 1950s and 1960s, and others as late as the 1980s. Some smoked only “regular” cigarettes, while others smoked only “light” cigarettes; and others stil! smoked both. Some claim to have started smoking while young, others only after they reached adult- hood. Some plaintiffs claim that they were addicted 15 to cigarettes, and others deny that they were unable to stop. Some plaintiffs claim that smoking caused them to develop cancer; others claim that it caused them to develop tooth decay. And the list goes on. Because of these disparities, plaintiffs assert—and the trial court has agreed—that they must present evidence covering a half-century of defendants’ con- duct in order to address the facts that are alleged to have injured each of the hundreds of plaintiffs before the court. But as respondents also belatedly concede, “some of the issues that we will try surely will not apply to everyone. Maybe some of them won’t apply to anyone ** *.” Sept. 18, 2007 Hearing Tr. at 33 (emphasis added). Thus, any finding that one or more of petitioners engaged in conduct giving rise to liability for puni- tive damages wiil necessarily rest on a retrospective view of petitioners’ conduct over a fifty-year period, not on the conduct that harmed any individual. This procedure clearly raises a risk that the court will ul- timately “award[] punitive damages to punish and deter conduct that bore no relation to the [plaintiffs’] harm,” State Farm, 538 U.S. at 422, because neither the defendants nor court nor the jury will have any way of identifying the “acts upon which liability is premised.” Jd. at 422. It is difficult to imagine a trial plan that would more effectively guarantee that any verdict in plaintiffs’ favor will reflect nothing more than the jury’s view that a particular defendant is “an unsavory individual or business.” Id. at 423. This is precisely what the Due Process Clause for- bids. The trial plan also precludes petitioners from de- fending themselves against plaintiffs’ punitive dam- ages claims. As in many West Virginia mass-tort 16 cases, the trial plan bars “[d]iscovery relevant to Phase II issues” until “after [the Phase I] consolli- dated trial of the common issues.” App. 74a (Trial Plan 96) (emphasis added). Nor will defendants be able to cross-examine any individual plaintiffs or raise any affirmative defenses during Phase I. Thus, neither defendants nor the Phase I jury will have any idea, for example, how many of the plaintiffs “knew that smoking was dangerous or did not rely upon the defendant’s statements to the contrary.” Williams, 127 S. Ct. at 1063. This curtailment of de- fendants’ opportunity to oppose plaintiffs’ claims is a due process violation in and of itself. Ibid. (“the Due Process Clause prohibits a State from punishing an individual without first providing that individual with ‘an opportunity to present every available de- fense.”’) (emphasis added). 2. The jury’s determination of a punitive- damages multiplier in Phase I(A) will, like the Phase I verdict, rest on an evidentiary showing that will be at once overbroad and incomplete. The jury neces- sarily will be speculating about the number of vic- tims that were actually harmed by each defendant; the extent of their injuries; the extent to which those injuries were actually caused by the defendant’s al- leged wrongful conduct (as opposed to the risks in- herent in smoking cigarettes); and the nature of the particular wrongful conduct that harmed each plain- tiff. All of those factors are key to a proper assess- ment of the relative reprehensibility of a defendant's conduct—“the most important indicium of the rea- sonableness of a punitive damages award.” BMW of N. Am. Inc., v. Gore, 517 U.S. 559, 575 (U.S. 1996). As this Court explained in State Farm, “[d]ue process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties’ 17 hypothetical claims against a defendant under the guise of the reprehensibility analysis * * *.” 538 U.S. at 423. Here, the jurors will be considering solely “the merits of other parties’ hypothetical claims,” be- cause they will know nothing at all about the claims of the actual plaintiffs. In State Farm, moreover, this Court explained that where the defendant’s compensatory liability is large, the imposition of any award of punitive dam- ages may be unwarranted and unconstitutional. “It should be presumed that a plaintiff has been made whole for his injuries by compensatory damages, so punitive damages should only be awarded if the de- fendant’s culpability * * * is so reprehensible as to warrant the imposition of further sanctions to achieve punishment or deterrence.” 538 U.S. at 419. The Phase I jury, of course, will have no way to know, or even guess, the amount of compensatory damages that will ultimately be paid to the plain- tiffs. Accordingly, it will be impossible for that jury to determine whether, and to what extent, additional Sanctions are necessary or appropriate. Cf. White v. Ford Motor Co., 500 F.3d 963, 974 (9th Cir. 2007) (holding that Nevada law required a jury hearing a punitive-damages retrial to be told the amount of compensatory damages that the first jury had awarded: “Without knowing the amount of those damages, the punitive damages jury could not have come to a reasoned conclusion as to the amount of additional damages necessary to deter Ford from similar conduct in the future.”). 18 2. The Application Of A Uniform Multiplier To Disparately-Situated Plaintiffs Vio- lates Due Process. This Court’s decisions do not countenance the application of a one-size-fits-all multiplier to plain- tiffs allegedly harmed by different aspects of peti- tioners’ past conduct. Williams, 127 S. Ct. at 1065 (holding “explicitly that a jury may not punish for the harm caused others”); State Farm, 538 U.S. at 425 (“[t]he precise [punitive] award in any case, of course, must be based upon the facts and circum- stances of the defendant’s conduct and the harm to the plaintiff’). In this case, the vast disparities among respondents’ claims will make it impossible to ensure in each Phase II trial that the relevant defen- dant is being punished because, and to the extent that, the Phase I jury found the defendant’s conduct toward this particular plaintiff to be reprehensible. For example, imagine that the jury found that petitioners’ allegedly misleading statements to the public about the health effects of “light” cigarettes merited the imposition of punishment and a particu- lar punitive damages multiplier. The across-the- board application of that multiplier would result in the imposition of punitive damages on behalf of re- spondents who never smoked “light” cigarettes—the vast majority of them-—and therefore could not have been harmed by that conduct. The same would be true if the multiplier were based in part on the peti- tioners’ use of particular advertisements: under Wil- liams, that conduct could not lawfully be the basis for awarding punitive damages to respondents who never viewed those ads. Likewise, evidence of al- leged marketing to youth cannot lawfully form the 19 basis for awards of punitive damages to plaintiffs who started smoking as adults. Imposing a rigid multiplier before compensatory damages are ascertained also violates due process by ignoring that the constitutionally permissible rela- tionship between punitive and compensatory dam- ages varies with the actual size of the compensatory award. This Court has held that, in most cases, the maximum allowable penalty will run from zero to nine times the amount of compensatory damages. State Farm, 538 U.S. at 423-25. Because compensa- tory damages serve a deterrent purpose, the size of the compensatory award is (along with the reprehen- sibility of the defendant’s conduct toward the plain- tiff} a key factor in gauging the maximum constitu- tionally permissible ratio of punitive to compensa- tory damages: in most cases, the maximum ratio will be inversely proportional to the size of the compensa- tory award. Indeed, “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the out- ermost limit of the due process guarantee.” Jd. at 425. In contrast, more extreme punitive damages multiples are reserved for cases in which “a particu- larly egregious act has resulted in only a small amount of economic damages.” Jbid. (quoting BMW, 517 U.S. at 582). Here, however, the ratio will be de- termined in advance, without any knowledge of the size of the compensatory damages. Thus, when a uniform punitive damages multi- plier is determined before a finding of compensatory damages, it guarantees an unconstitutional result. That procedure deprives the jury and the reviewing court of the ability to make the contextual, individu- alized decision about the size of a punitive damages 20 award that due process requires. See, e.g., Philip Morris Inc. v. Angeletti, 752 A.2d 200, 249 (Md. 2000) (“Mere widespread, identical proportionality between actual damages and punitive damages for such a multitude of plaintiffs would not necessarily encap- sulate the relation between the two types of damages deemed requisite under this State’s common law,” which applies functionally the same analysis as fed- eral constitutional law). B. The Decision Below Conflicts With Rulings Of The Second Circuit And Other Courts. The decisions in this case directly conflict with the Second Circuit’s decision in In re Simon II Litiga- tion, 407 F.3d 125 (2d Cir. 2005). In that case, the court of appeals rejected a trial plan that called for the litigation of punitive liability and punitive dam- ages prior to any determination of compensatory li- ability or compensatory damages to individual plain- tiffs. The court observed that under State Farm, “punishment on any basis that does not have a nexus to the specific harm suffered by the plaintiff’ is un- constitutional. Jd. at 139. The district court’s trial plan, under which the jury would have estimated to- tal harm to the class and then imposed an aggregate award of punitive damages, raised the risk of such punishment because it failed to account for the dif- ferences among plaintiffs. Jd. at 138. The Fifth Circuit, too—even before State Farm— held that, in a case like this one, punitive damages cannot be litigated prior to a determination of com- pensatory liability and damages. Because considera- tion of “punitive damages requires individualized proof and determinations,” “punitive damages must be determined after proof of liability to individual 21 plaintiffs at the second stage of a [Title VII] pattern or practice case, not upon the mere finding of general liability to the class at the first stage.” Allison v. Citgo Petroleum Corp., 151 F.3d 402, 418 (5th Cir. 1998). See also Colindres v. QuietFlex Mfg., 235 F.R.D. 347, 377 (S.D. Tex. 2006) (“[P]Junitive dam- ages cannot be assessed without proof of liability to individual class members.”) (citing Allison). Similarly, the Court of Appeals of Maryland firmly rejected a trial plan similar to that at issue here—albeit on state law grounds. Maryland’s high court explained that the plan would not enable the jury to properly assess the amount of punitive damages that are appro- priate in specific relation to differing amounts of—and reasons for—actual dam- ages. ** * Under the Circuit Court’s deci- sion * ** the punitive damages determina- tion would be made before any finding of li- ability to any class member, in the absence of any evidence that defendants’ conduct actu- ally caused any class member’s alleged in- jury, and without any knowledge of how much, if any, compensatory damages would be awarded to any class member by other ju- ries who would never hear the Phase I evi- dence. Angeletti, 752 A.2d 200 at 249 (anternal quotation marks omitted). See also id. at 245 (noting that the trial plan called for a punitive-damages multiplier to be used). The Florida Supreme Court also recently con- cluded that a punitive damages phase cannot be con- ducted prior to the resolution of questions pertaining 22 to the defendant’s liability to the plaintiff. It there- fore vacated a massive punitive damages award er- roneously imposed by a Phase I jury. See Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006) (per curiam), cert. denied, 128 S. Ct. 96 (2007). Though petitioners firmly belicve that aspects of the Engle decision were fundamentally erroneous, the Florida Supreme Court clearly and correctly rejected the view that a class-wide punitive damages phase may be conducted before the defendant’s compensatory li- ability to any plaintiff has been established. The Florida high court found that this trial plan violated both state law and principles of federal due process, writing that “[i]t was error for the trial court to allow the jury to consider entitlement to punitive damages before the jury found that the plaintiffs had estab- lished causation and reliance.” 945 So. 2d at 1263. Moreover, “without having total compensatory dam- ages determined it would be impossible to determine whether punitive damages bear a ‘reasonable’ rela- tionship to the actual harm inflicted on the plaintiff.” Id. at 1265 (internal quotation marks omitted). Several federal district courts have likewise held, especially post-State Farm, that an assessment of punitive damages must be tailored to each individual plaintiffs injury, and thus cannot precede a determi- nation of compensatory liability and damages. In Jn re Baycol Products Litigation, 218 F.R.D. 197 (D. Minn. 2003), a mass-tort case against a pharmaceu- tical company, the district court rejected a class ac- tion trial plan that was, in relevant respects, func- tionally identical to the plan approved below, holding that such a structure would violate due process: To succeed on a punitive damages claim, a plaintiff must prove that the defendant's con- 23 duct toward him/her rises to the level re- quired by law. * * * [A] determination of pu- nitive damages is based on individual is- sues. * * * Plaintiffs’ proposed class trial on punitive damages poses * * * due process con- cerns because the conduct upon which Plain- tiffs would base their punitive damages claim is not specific to a particular plaintiff[]s claim.” Id. at 215.4 West Virginia’s “common” and unconstitutional approach to the litigation of punitive damages claims in mass-tort cases is in conflict with the decisions of this Court and with the rulings of other courts. This Court's immediate review is warranted. 4 Accord Nelson v. Wal-Mart Stores, Inc., 245 F.R.D. 358, 378 (E.D. Ark. 2007) (punitive damages could not be determined on a classwide basis prior to individualized assessments of harm and compensatory damages: “Individualized determinations are necessary to fully realize the extent of the harm caused by Wal- Mart’s conduct and properly assess the need for punishment and deterrence”); O’Neal v. Wackenhut Servs., Inc., No. 3:03- CV-397, 2006 WL 1469348 at *22 (E.D. Tenn. May 25, 2006) (pursuant to State Farm, “a determination of punitive damages would require each plaintiff to demonstrate how the discrimina- tion affected him or her individually. As defendant points out, proof of damages must be related to the harm to the plaintiff. Te hold otherwise would violate defendant's rights to due proc- ess and would improperly eliminate the jury’s discretion to as- sess punitive damages under the Seventh Amendment’). 24 Il. THIS COURT SHOULD GRANT REVIEW IN ORDER TO HALT WEST VIRGINIA’S RE- PEATED AND UNCONSTITUTIONAL USE OF REVERSE BIFURCATION TO RESOLVE AGGREGATED PUNITIVE-DAMAGES CLAIMS IN MASS-TORT LITIGATION. A. The West Virginia Supreme Court Of Appeals Has Made Clear That It Will Continue To Place Expediency Over Concerns Of Due Process In Mass-Tort Litigation. West Virginia’s use of its upside-down procedure in this case is no one-time event. On the contrary, as the West Virginia Supreme Court of Appeals itself has explained, “bifurcated trial plans structured like the one at issue [in this case] are common in West Virginia.” In re Tobacco Litig., 624 S.E.2d at 742 (emphasis added). The reported cases confirm that in recent years, the West Virginia courts have turned to the aggregation and front-loading of punitive- damages claims as a means of streamlining mass- tort litigation.5 This approach to assessing punitive 5 See, e.g., State ex rel. Chemtall Inc. v. Madden, No. 33380, 2007 WL 4098937 (W. Va. Nov. 15, 2007) (per curiam) (approv- ing a similar multi-phase trial plan to govern a consolidated ac- tion: “(t]he first phase of the trial will involve liability and whether the Defendants’ actions and/or inactions justify puni- tive damages, and if so, what multiple of general damages will be assessed as a punitive damage multiplier as to each Defen- dant * * *. Should Plaintiffs prevail on the issue of liability, the parties will proceed in the second phase to try the issues of medical causation, medical monitoring viability, and damages.”) (internal quotation marks omitted); Petition for Writ of Certio- rari at 5, 10, Union Carbide Corp. v. Recht, No. 03-319, 2003 WL 22428919 (U.S. Aug. 22, 2003) (detailing that under the trial plan, “punitive damages were assessed by the Phase | 25 damages awards is just one in a laundry list of rea- sons why the West Virginia courts have earned wide- spread criticism for their treatment of corporate de- fendants.® This Court should grant certiorari in order to make express what already should be clear from its decisions in State Farm and Williams—the “com- mon” trial procedure employed in this case does not comport with the requirements of the Due Process Clause. West Virginia has stated quite clearly that it will not amend its “existing system of mass tort litigation” until it receives a “clear indication” from this Court that it must. Jn re Tobacco Litig., 624 S.E.2d at 741-42. And the decisions below demon- strate that its courts do not view the facial incom- patibility of its current procedures with the teach- ings of this Court in State Farm and Williams as suf- ficient for that purpose. In fact, members of West Virginia’s high court appear inclined to work around, restate, or simply ignore this Court’s ruling in State Farm: “As the jury,” with “thousands” of individual liability trials scheduled to follow); State ex rel. Appalachian Power Co. v. MacQueen, 479 S.E.2d 300, 304-05 & n.9 (W. Va. 1996) (calling for similarly bi- furcated plan). 6 See, e.g., Michael P. Addair, A Small Step Forward: An Analysis of West Virginia’s Attempt At Joint And Several Liabil- ity Reform, 109 W. Va. L. REV. 831, 833 n.9 (2007); Brian Dor sey, The Good, the Bad, and the Ambiguous: Recent Develop- ments in West Virginia’s Class Action Jurisprudence, 107 W. VA. L. REV. 261, 262 n.1 (2004) (citing Judicial Hellhole’ Label Not Unfair, THE INTELLIGENCER WHEELING NEWS-REGISTER, Nov. 9, 2003, at C4); Editorial, The Asbestos-Fraud Express, WALL ST. J., June 2, 2006, at Al8; Petition for Writ of Certiorari at 15, Daniel Measurement Servs. v. Eagle Research Corp., No. 07-384, 2007 WL 2736284, (U.S. Sept. 19, 2007). 26 members of this Court have noted before, State Farm v. Campbell * * * was nothing more than a summary, a collation, of prior case law.” In re Tobacco Litig., 624 S.E.2d at 749 (Starcher, J., concurring) (citing cases). See also, e.g., Jackson v. State Farm Mut. Auto. Ins. Co., 600 S.E.2d 346, 367 (W. Va. 2004) (McGraw, J., concurring) (opining that in State Farm, “the majority of the nine justices did not focus on ‘the degree of reprehensibility of the defendant's conduct,’ but instead chose to substitute the jury’s judgment with their own. * * * It is not ours to judge whether the high Court did the right thing in reduc- ing the 145 million dollar award in Campbell, but it is vital that we not be blinded by the sheer size of an award when considering its validity.”) (citation omit- ted).? See also id. at 654 (Maynard, C.J., concurring in part and dissenting in part) (“I fervently hope that the next time a punitive damages award is reviewed by this Court, the majority will abide by the United States Supreme Court's decision in Campbell, even if it does not like or agree with Campbell's holdings. The rule of law demands that ordinary citizens follow laws with which they do not agree. Likewise, we as judges are bound by controlling legal precedent. Campbell is the law of the land, and it must be ap- ? See also Boyd v. Goffoli, 608 S.E.2d 169, 188 (W. Va. 2004) (Starcher, J., concurring) (“[W]hen examined objectively, [State Farm] was not a significant decision by the U.S. Supreme Court.”); Kocher v. Oxford Life Ins. Co., 602 S.E.2d 499, 505-06 (W. Va. 2004) (per curiam) (McGraw, J., dissenting) (stating that the State Farm majority “foolishly” had “adopted this overt fear of large numbers” and that “[t)he majority opinion deserves credit for not openly embracing the seductively simple argu- ments of Campbell and Gore, but I fear some of that logic has affected the decision to reverse this case.”). 27 plied everywhere in the United States, including in West Virginia.”). It is not a stretch to suggest that in managing mass-tort cases the West Virginia courts have privi- leged “flexibility” (see State ex rel. Mobil Corp. v. Gaughan, 563 S.E.2d 419, 424 (W. Va.) (per curiam), cert. denied, 537 U.S. 944 (2002)) above due process. In the words of one justice of the West Virginia Su- preme Court of Appeals, “what process is due is en- tirely dependent upon the trial judge’s discretion.” In re Tobacco Litig., 624 S.E.2d at 744 (Starcher, J., concurring) (emphasis added). This view that the Due Process Clause places no meaningful limitations on how courts may conduct mass-tort litigation pro- ceedings is totally at odds with settled constitutional principles. As many other courts have recognized, the requirements of the Due Process Clause cannot be set aside simply because plaintiffs have filed nu- merous cases in one jurisdiction. On the contrary, it is precisely these “considerations of convenience and economy [which] must yield to a paramount concern for a fair and impartial trial.” In re Repetitive Stress Injury Litig., 11 F.3d 368, 373 (2d Cir. 1993) (quoting Johnson v. Celotex Cornv., 899 F.2d 1281, 1285 (2d Cir. 1990)). Accordingly, courts outside West Virginia have recognized that “(t]he systematic urge to aggregate litigation must not be allowed to trump our dedica- tion to individual justice, and we must take care that each individual plaintiffs—and defendant’s—cause not be lost in the shadow of a towering mass litiga- tion.” In re Brooklyn Navy Yard Asbestos Litig., 971 F.2d 831, 853 (2d Cir. 1992). See also In re Ethyl Corp., 975 S.W.2d 606, 613 (Tex. 1998) (quoting same); Cain v. Armstrong World Indus., 785 F. Supp. 28 1448, 1456-57 (S.D. Ala. 1992) (“The congestion these [asbestos] cases caused in this district for all civil litigants gives one a skewed view of how to resolve the problem. The ‘“Try-as-many-as-you-can-at-one- time’ approach is great if they all, or most, settle; but when they don’t, and they didn’t here, [plaintiffs get] a chance to do something not many other civil hti- gants can do—overwhelm a Jury with evidence.”). Indeed, here, as in many other mass-tort cases, West Virginia’s courts have aggregates hundreds of disparate cases without attempting to satisfy the standards for certification of a class artion. Among those standards is the requirement thai, common is- sues must predominate over individual ones. W. Va. R. Civ. P. 23(b). The West Virginia courts have also exempted mass-tort cases from even the typical claims consolidation analysis under W. Va. R. Civ. P. 42(a), which requires (inter alia) a showing that con- siderations of judicial economy outweigh the poten- tial prejudice and confusion.§ Instead, the West Virginia Supreme Court of Ap- peals may order mass-tort cases consolidated pursu- ant to W. Va. Tr. Ct. R. 26.01, under which the con- solidation inquiry is exempt from “case law * ** ad- dress[ing] issues of joinder, class action, and consoli- dation.” State ex rel. Allman v. MacQueen, 551 S.E.2d 369, 374 (W. Va. 2001) (per curiam). Rule 26.01 consolidation is governed by no standard in- 8 Smoking-and-health claims cannot be consolidated under Fed. R. Civ. P. 42(a). See, e.g., Clinton v. Brown & Williamson Hold- ings, Inc., Nos. 05 Cv. 9907, 05 Cv. 9908, 05 Cv. 9174 (CB), 2007 WL 2161778 (S.D.N_Y. July 25, 2007) (remaining “common questions of law and fact do not overcome the risk of jury confu- sion and possible prejudice to the separate defendants if the Court were to consolidate this action for trial purposes.”). 29 quiry at all; its express purpose is to “permit[] the use of innovative means of trial management con- cerning issues unique to mass litigation, which would in turn encourage 2 more expeditious resolu- tion of these matters than that permitted by tradi- tional means of case resolution.” Ibid. The Chief Justice of the West Virginia Supreme Court of Ap- peals invoked that rule here.? Soon after the high court issued its order con- solidating the cases, the number of claims ballooned from roughly 120 to over 1,200, many of which have subsequently been dismissed because the plaintiffs failed to meet the court’s basic procedural require- ments. Presumably, the number of cases remains grossly inflated, because many additional claims suf- fer from various irremediable flaws that will be dis- covered only after Phase I is over. Accordingly, one of the few tangible facts the jury will be told about the plaintiffs—the number of claimants—will be mis- leading. In sum, petitioners now face a premature, aggre- gated punitive damages proceeding in a case involv- ing disparate claims, injuries and facts—a case that therefore never could have been certified as a class action.!° The Due Process Clause and this Ccourt’s precedents demand more. This Court should grant review in order to make clear that West Virginia 9 The trial court subsequently denied petitioners’ request for a hearing to determine whether the pending cases presented common issues of law or fact. \0 For these reasons, courts around the country have refused to grant class certification in smoking-and-health related cases. See, e.g., Engle v. Liggett Group, Inc., 945 So. 2d 1246, 1267 n.9 (Fla. 2006) (collecting cases). 30 must revise its mass-tort litigation system to com- port with due process. See, e.g., Lilly v. Virginia, 527 U.S. 116, 123 (1999) (certiorari granted because state court’s decision “represented a significant departure from {the United States Supreme Court’s] Confronta- tion Clause jurisprudence’). B. Immediate Review Is Warranted. Certiorari is warranted because the trial plan approved by the West Virginia courts cannot be rec- onciled with this Court’s decisions in State Farm and Williams, see S. Ct. R. 10(c). And this Court plainly has jurisdiction to review the lower court’s denial of petitioners’ request for a writ of prohibition. See Bd. of Educ., 448 U.S. at 1345-46; Madruga, 346 U.S. at 557 n.1. Moreover, the circumstances of this case demonstrate that the optimal time for review is now. The constitutional violation is complete: the trial that is set to begin on March 18, 2008 will be irrepa- rably flawed from the outset. The deficiencies in the trial plan go to the very heart of the Phase I jury’s decision-making: that jury will be deprived of the most fundamental information that should form the basis for its verdict. Accordingly, there is no way to salvage its findings. Unless this Court acts, those findings will be carried forward into hundreds of Phase II trials, conducted before different finders of fact in numerous West Virginia courtrooms. See App. 70a (Trial Plan 93(b)) (in Phase II, “[e]ither separate individual juries, judge or judges will inde- pendently address issues unique to each plaintiffs compensatory damages and any other individual is- sues in reasonably sized trial groups or on an indi- vidual basis”). Because of the flaws in this trial plan, there is no possible way in which any punitive damages judg- 31 ment obtained by any plaintiff in this case could be consistent with due process. Accordingly, although this Court in theory could postpone its consideration of this due process question while hundreds of sepa- rate Phase II proceedings wend their way through the courts, that course of action would entail years of unnecessary delay and expense for the parties to this case and the West Virginia courts. It would be provident for this Court instead to exercise its juris- diction over the decision denying petitioners’ request for a Writ of Prohibition now. E.g., United States v. Centennial Sav. Bank FSB, 499 U.S. 573, 578 n.3 (1991) (certiorari granted “in light of the significant number of pending cases” affected). Immediate review is also warranted because the damage done in Phase I—the jury’s assessment of a punitive damages award by an unconstitutional pro- cedure—cannot be undone through post-verdict or appellate review. Post-trial remedies like remittitur allow a court only to reduce excessive damages to the maximum amount permissible under the Constitu- tion. See, e.g., Cont Trend Res., Inc. v. OXY USA Inc., 101 F.3d 634, 643 (10th Cir. 1996). But remitti- tur cannot cure a fundamentally-flawed trial plan like this one. The reason is simple: a jury that heard only relevant and admissible evidence that bore a nexus to the injuries of the plaintiffs before the court, that had the opportunity to consider defendants’ af- firmative defenses, and that knew the total amount of compensatory damages that will ultimately be re- covered in this litigation, might well award far less than the maximum punishment allowed by the Con- stitution.!!' See Merrick v. Paul Revere Life Ins. Co., 11 Indeed, this Court has reached this conclusion in the context of criminal sentencing. See Hicks v. Oklahoma, 447 U.S. 343, 32 500 F.3d 1007, 1018 (9th Cir. 2007) (remittitur can remedy excessiveness, but it is inappropriate “where the constitutional error stems from misguidance re- garding the way the jury may use evidence in setting an amount”); White, 500 F.3d at 972-73 (concluding that a new trial on punitive damages, rather than remittitur, is the “proper remedy” for a due process violation); Ramirez v. New York City Off-Track Bet- ting Corp., 112 F.3d 38, 40 (2d Cir. 1997) (“If * * * the record establishes that the jury’s verdict on damages was not only excessive but was also in- fected by fundamental error, remittitur is improper. In such a case, the judgment of the district court should be vacated and the cause remanded for a new trial on damages.”) (citation omitted). Given the in- sufficiency of the remittitur remedy in these circum- stances, the practical difficulties that would be cre- ated if this Court were to postpone consideration of this case and only later declare West Virginia’s trial plan unconstitutional would be enormous. Finally, immediate review is warranted in light of the well-recognized fact that the extreme settle- ment pressures presented in mass-tort cases of this kind mean that very few such cases are ever tried to a jury verdict. See, e.g., In re Chevron USA, Inc., 109 F.3d 1016, 1022 (5th Cir. 1997) (Jones, J., specially concurring) (noting that a trial court’s case manage- ment decisions in mass-tort cases are not often “ef- fectively reviewable after trial’ because defendants 346 (1980) (where State amended its habitual offender statute, defendant sentenced under old statute was entitled to new trial on the appropriate sentence: “Oklahoma denied the petitioner the jury sentence to which he was entitled under state law, simply on the frail conjecture that a jury might have imposed a sentence equally as harsh as” the one it imposed under the in- valid statute). 33 face “enormous” settlement pressures even when the odds of an adverse verdict are slim); Petition for Writ of Certiorari at 28, Mobil Corp. v. Adkins, No. 02- 132, 2002 WL 32134868 (U.S. July 24, 2002) (“Given the enormous potential liability that mass aggrega- tions pose for defendants, combined with scrutiny from financial markets, aggregated proceedings exert powerful pressure on defendants to settle even merit- less cases.”). This case thus presents this Court with a rare opportunity to consider the question whether a court may determine a defendant’s liability for pu- nitive damages before determining whether the de- fendant is legally responsible for any plaintiffs inju- ries or to pay compensatory damages to any plaintiff. The Court should take hold of this chance to provide much-needed guidance to the lower courts. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. ANDREW R.C. GADDES ANDREW L. FREY BRUCE CLARK Counsel of Record Dechert LLP ANDREW H. SCHAPIRO 2929 Arch Street LAUREN R. GOLDMAN Philadelphia, PA 19104 Kwaku A. AKOWUAH (215) 994-4000 Mayer Brown LLP 1675 Broadway Counsel for Petitioner New York, NY 10019 Philip Morris USA, Inc. (212) 506-2500 JOHN R. MUSGRAVE Counsel for Petitioner Thompson Coburn LLP Philip Morris USA, Inc. One US Bank Plaza St. Louis, MO 63101 DONALD B. AYER (314) 552-6000 Jones Day 51 Loutistana Ave., N.W. Counsel for Petitioner Washington, D.C. 20001 Lorillard Tobacco Co. (202) 879-3989 Counsel for Petitioners R.J. Reynolds Tobacco Co. and Brown & Wil- liamson Holdings, Inc. Counsel for Petitioners DECEMBER 2007 APPENDIX TABLE OF CONTENTS APPENDIX A: Order of the Supreme Court of Appeals of West Virginia (November 7, 2007)......... la APPENDIX B: Order of the Circuit Court of Ohio County, West Virginia (August 28, 2007)........ 3a APPENDIX C: Transcript of Hearing August 17, 2007 In the Circuit Court of Ohio County, EI 5a APPENDIX D: Order of the Circuit Court for Ohio County, West Virginia (August 28, 2007)...... 15a APPENDIX E: Transcript of Hearing May 23, 2007 In the Circuit Court of Ohio County, Co occ denkandenssnoanecers 17a APPENDIX F: Opinion and Order of the Circuit Court of Ohio County, West Virginia a sidhaansedananscansdéevasasecees 28a APPENDIX G: Opinion of the Supreme Court of Appeals of West Virginia (December 2, oii sce Scnladissnennncanebibisescesacsesencs 3la APPENDIX H: Opinion and Order of the Circuit Court of Ohio County, West Virginia Ss cuebinadancndannes pane 66a APPENDIX I: Case Management Order/Trial Plan of the Circuit Court of Ohio County, West Viteiae Ganuary 11, ZOOD)..........c.cccccesccssccsscepecess. 70a APPENDIX J: List of Plaintiffs With Claims Pending in Civil Action No. 00-C-5000 sc asichnbaasensepenanecaaes 77a APPENDIX K: List of Defendants Not Party To the Writ of Prohibition Proceeding In the Supreme Court of Appeals of West Virginia........ 110a la APPENDIX A [Order of the Supreme Court of Appeals of West Virginia (November 7, 2007)] STATE OF WEST VIRGINIA At a Regular Term of the Supreme Court of Appeals continued and held at Charleston, Kanawha County, on the 7th of November, 2007, the following order was made and entered: State of West Virginia ex rel. Philip Morris USA, Inc.; Brown & Williamson Holdings, Inc.; Lorillard Tobacco Company; and R.J. Reynolds Tobacco Company, Petitioners, Vs.) No. 072903 Honorable Arthur M. Recht, Judge of the Circuit Court of Ohio County, Chief of the Mass Litigation Panel and All Plaintiffs in In Re: 5000 Consolidated Matter, Respondents. On a former day, to-wit, September 27, 2007, came the petitioners, Philip Morris USA, Inc., by David B. Thomas, Pamela L. Campbell and Teresa K. Thompson, Allen Guthrie McHugh & Thomas, PLLC, its attorney; Brown & Williamson Holdings, Inc. and R.J. Reynolds Tobacco Company, by W. Henry Jernigan, Jr. and Brace R. Mullett, Dinsmore & Shohl, LLP, their attorneys; and Lorillard Tobacco Company, by Michael J. Farrell and Joseph M. Farrell, Jr., Farrell & Farrell, L.C., its attorneys, and presented to the Court their petition praying for a writ of prohibition to be directed against the 2a respondent, Honorable Arthur M. Recht, Judge of the Circuit Court of Ohio County, Chief of the Mass Litigation Panel, as therein set forth. Thereafter, on the 24th day of October, 2007, pursuant to a request for a response under Rule 14(b) of the Rules of Appellate Procedure, came the respondent plaintiffs, by Cindy J. Kiblinger, James F. Humphreys & Associates, and Timothy N. Barber, their attorneys, and presented to the Court their initial response thereto. Upon consideration whereof, the Court is 1: the opinion that a rule should not issue. It is hereby ordered that the petition for writ of prohibition prayed for by the petitioners is hereby refused. Justice Benjamin would grant. A True Copy. Attest: s/ Rory L. Perry Clerk, Supreme Court of Appeals 3a APPENDIX B [Order of the Circuit Court of Ohio County, West Virginia (August 28, 2007)] IN THE CIRCUIT COURT OF OHIO COUNTY, WEST VIRGINIA IN RE: TOBACCO LITIGATION (Individual Personal Injury cases) Civil Action No. 00-C-5000 (Judge Arthur M. Recht) CRDER By agreement, a telephonic hearing was held August 17, 2007 on the issues raised in Defendants’ Motion for an Order Setting Forth Findings of Fact and Conclusions of Law for the Purpose of Seeking an Extraordinary Writ from the Supreme Court of Appeals. Upon the submissions and argument thereon, the court announced a denial of the motion and assigned as grounds therefor that the previous holdings on such issues provide an adequate articulation of necessary findings which include: (1) The hearing held herein on December 14, 2006 and the resultant order entered December 26, 2006. (2) The hearing held herein on May 23, 2007 and attendant order with attachment. Accordingly, it is hereby ORDERED: (1) Defendants’ Motion for an Order Setting Forth Findings of Fact and Conclusions of 4a Law for the Purpose of Seeking an Extraordinary Writ from the Supreme Court of Appeals is denied. (2) A copy of the transcript of the hearing held August 17, 2007 shall be filed by plaintiffs’ counsel upon its receipt and shall be a part of this order as a reflection of the court’s holding. Defendants’ objections and exceptions § are preserved. Entered this 28th day of August, 2007. s/ Arthur M. Recht Judge Arthur M. Recht A copy, Teste: Brenda L. Miller Circuit Clerk Presented by: /s Timothy N. Barber Timothy N. Barber (WVSB #231) Post Office Box 11746 Charleston, WV 25339 (304) 744-4400 Counsel for Plaintiffs Da APPENDIX C [Transcript of Hearing August 17, 2007 In the Circuit Court of Ohio County, West Virginia] IN THE CIRCUIT COURT OF OHIO COUNTY STATE OF WEST VIRGINIA IN RE: TOBACCO LITIGATION: CASE NO. 00-C-5000 PERSONAL INJURY CASES xx MOTIONS (via telephone) Before: HON. ARTHUR M. RECHT Monday, August 17, 2007 4:30 p.m. * *& Whereupon the above entitled matter came on for hearing before the Honorable Arthur M. Recht at the Ohio County Courthouse, Wheeling, West Virginia, and the proceedings were as follows: APPEARANCES: ON BEHALF OF THE PLAINTIFFS: CINDY J. KIBLINGER, Esquire James F. Humphreys & Associates, L.C., One Bank Center, Suite 1113, 707 Virginia Street, East, Charleston, West Virginia 25301 6a and TIMOTHY N. BARBER, Esquire P.O. Box 11746, Charleston, West Virginia 25339- 1746 and KENNETH B. McCLAIN, Esquire Humphrey, Farrington & McClain, P.C., P.O. Box 900, Independence, Missouri 64051-0900 ON BEHALF OF PHILIP MORRIS: ANDREW GADDES, Esquire BRUCE W. CLARK, Esquire Dechert, Price & Rhoads, 4000 Bell Atlantic Tower, 1717 Arch Street, Philadelphia, Pennsylvania 19103- 2793 and PAMELA L. CAMPBELL, Esquire Allen, Guthrie & McHugh, 1300 Bank One Center, P.O. Box 3394, Charleston, West Virginia 25333- 3394 ON BEHALF OF LORILLARD TOBACCO COMPANY: JOHN R. MUSGRAVE, Esquire Thompson & Coburn, LLP, One Mercantile Center, St. Louis, Missouri 63101 and JOSEPH M. FARRELL, JR., Esquire 7a Farrell, Farrell & Farrell, L.C., The Farrell Building, 914 Fifth Avenue, P.O. Box 6457, Huntington, West Virginia 25772-6457 ON BEHALF OF R. J. REYNOLDS TOBACCO COMPANY and BROWN & WILLIAMSON: JEFFREY FURR, Esquire THOMAS SCHROEDER, Esquire Wombie Carlyle Sandridge & Rice, Post Office Drawer 84, Winston-Salem, North Carolina 27102 and W. HENRY JERNIGAN, JR., Esquire Dinsmore & Shohl, 900 Lee Street, Huntington Square, West Virginia 25301 ON BEHALF OF LIGGETT GROUP, INC., LIGGETT & MEYERS, INC., AND BROOKE GROUP LIMITED: MARK TROY, Esquire Bailey & Wyant, PLLC, 505 Capitol Street, Suite 1007, Post Office Box 3710, Charleston, West Virginia 25337 x *K* PROCEEDINGS xk** THE COURT: We're on the record now, and then, one more time, if we can, first for the plaintiffs, why don’t you just state your full name. I will say 8a that, when you speak, if you can just identify yourself each time you speak, that way we can have you down on the record. All right? MR. BARBER: For the plaintiffs, it’s Timothy N. Barber and Cindy Jo Kiblinger and Kenneth McClain for the plaintiffs. THE COURT: All right. Okay, got that. MR. GADDES: It’s Andrew Gaddes and Bruce Clark and Pamela Campbell for Philip Morris. MR. FURR: We have Jeff Furr, Tom Schroeder, and Henry Jernigan for Brown & Williamson and R.J. Reynolds. MR. MUSGRAVE: John Musgrave for Lorillard, and Mr. Farrell, local counsel. THE COURT: All right. Joseph Farrell, right? MR. FARRELL: Yes, Your Honor. MR. TROY: Mark Troy for the Liggett defendants. THE COURT: Right. Anybody else? Good. All right. Let me just address one matter rather quickly. I don’t know if the plaintiffs received the letter dated August 16th from Pam in which she enclosed an order which modified the case-management plan. It's Revision No. 24, and it has, basically—it structures where we're going from here on. Did the plaintiffs receive that? MR. McCLAIN: Yes, and I think we responded. THE COURT: Is there any objection to the order? 9a MR. McCLAIN: Yes, we had some suggested change in dates as I understand it. I’ve been out, Judge, but didn’t we have some changes in the dates that we were asking for? MR. BARBER: In addition to the structural things, we have some other objections, Judge. As an example—this is an example now—of requesting us to send everything FedEx and fax for everything to everybody, and the filing times of 3:30 p.m. But that’s just an example of the—we just want to reserve rather than have you precipitously enter an order changing the thing, we want to have you be able to review our objections to it. And then whatever you want to do is fine, but we do have some objections to it, substantive objections. THE COURT: And you say you have sent that to me? MR. BARBER: No. THE COURT: You're going to? MR. BARBER: We just got the thing. THE COURT: All right, all right; so you'll have it in next week? MR. BARBER: Next week, certainly by sometime next week. Whatever time you tell us we have to have it, we'll have it in there. THE COURT: Have it in by Friday if you can, please. MR. BARBER: Okay. That will be fine, Judge. Thank you. THE COURT: All right. That’s one thing. And now, the- this matter is set for consideration of a 10a motion requesting this Court to set forth findings of fact and conclusions of law, specifically, I presume, relating to the case-management plan, so that it could serve as a basis to seek extraordinary relief in the West Virginia Supreme Court. MR. FURR: Yes, Your Honor. THE COURT: Now, who’s going to speak? MR. FURR: This is Jeff Furr, Your Honor, on behalf of the defendants. As the Court has recognized, we have decided again to seek review of the trial plan by writ, and perhaps out of an abundance of caution, but our interpretation of the Allstate v. Gaughan case is that it may be incumbent on us to request the Court to make findings of fact and conclusions of law and reduce that to writing in order for the Supreme Court to be properly able to consider our writ. THE COURT: Okay. MR. BARBER: Judge, this is Tim Barber, as you well know, the rules require a final judgment to make findings of fact and conclusions of law under 54(b). That’s really not required in this thing; however, we do have a transcript of the hearing that you had in May, in which you articulate at length why you're doing all this. And that’s part of the transcript, and these guys, if they want to go up on a writ, you’ve made it clear what your findings—in that transcript. It’s not a real question about it, and for them—I think they’ve come up with some kind of a thing about that you— something that’s self—a bootstrap operation for them to be able to go to the Supreme Court. lla If you want to take your transcript and you want to articulate your findings of fact that are different in some respects from the—from that in which that you already have articulated, then that’s fine. But we believe that you—it’s a matter of record; it’s in the transcript. Frankly, Judge, in the past, Pamela Campbell, who’s on this phone message with us, has always supposedly authored these orders. And, of course, in this case they lost, so she apparently decided not to enter an order reflecting that. Nevertheless, it is a matter of record that they can go to the Supreme Court, as you very well know, and say this is the ruling of the judge. Now, if you want to change it in some fashion, then you—we'll be glad to provide you with a copy of the transcript of your findings, and that’s it. We are not—to have an appetite to convenience Mr. Furr or these defendants for going again, over and over again. And this again is going to be an effort to try to delay this thing again from the March date, which we oppose. But I’ve said all I'm going to. Ken McClain is on here with me. We have—if he wants to add something to what I just said, that’s fine. MR. McCLAIN: No, Judge, I don’t. THE COURT: All right. MR. FURR: Jeff Furr. I looked very closely. Frankly, I have no idea what the response to the argument really is, but, nonetheless, I indicated that we were doing this out of an abundance of caution. I think that one thing that no one should want, including the plaintiffs, is for the Supreme Court to 12a decline to accept our writ because it was under the— because it concluded that it did not know enough about the trial plan yet in order to review it properly. But under Gaughan we made this motion; we think that further articulation of the Court’s views of the—its intentions with respect to the trial plan might well be of assistance to the Supreme Court. As to why the last order has not been entered yet, I’d have to defer to Pam and let her explain to you what the delay has been. THE COURT: Well, let me just respond. I’ve given this a lot of thought, and I’ve gone back and | have—all the way back and reread my memorandum of opinion and order that grew out of the Allstate case. And then, of course, that basically served as a basis for the certified question that went to the Supreme Court, and I reread their opinion and the various other ancillary opinions. And I then looked at the—as to whether or not the Philip Morris versus Williams case may have— requires additional findings of fact. I think, and I believe that I’ve already made them. And the trial plan—and what I’m basically doing is taking the lead from the opinion of Justice Maynard, and I don't believe that the Williams case changes that. And I said that, and I’m not going to change my views on that. And the trial plan as approved so far by the West Virginia Supreme Court by their opinion, which was filed December 2, 2005, is still continuing, and I don’t think anything more is needed. l3a I do think the record and the reason—when I laid all these various reasons as to why the trial plan is going to continue, it was really in—TI had in mind those being the findings of fact and conclusions of law. So you can take those—and I think the Gaughan case, basically, and I understand why you're concerned about it. But I think it satisfies any requirement the Supreme Court might have regarding this issue. So I’m just going to stand on what I have already said. MR. FURR: Thank you. You understand I said we were doing this out of abundance of caution. THE COURT: I appreciate that, I do; that’s fine. As far as I'm concerned, all I want to do now—you obviously can do what you feel you have to do to protect your clients’ interests. That’s fine. As far as I’m concerned right now, I’m just trying to get ready for the March trial date. So until— MR. BARBER: Judge, not to interrupt, but—this is Tim Barber—because—that, apparently, we prevailed in this thing, I’m going to go ahead and draft the order myself. And so could we just simply say that the motion is denied based upon the fact that you have already articulated in your previous ruling of your—the reasons behind your findings, but—your decision. Would that be— THE COURT: The reasons being... MR. BARBER: Brief, very, very brief order? 14a THE COURT: The reason behind my decision to continue with the original trial plan as formulated and as, I believe, endorsed by the opinion filed December 2, 2005, and the subsequent findings of fact, conclusions of law that I made just ratifying that, yes, that’s it. MR. BARBER: Thank you, Judge. THE COURT: Thank you all very much. UNIDENTIFIED SPEAKER: Thank you. **¥* (This hearing was concluded at 4:50 p.m.) **¥* 15a APPENDIX D [Order of the Circuit Court for Ohio County, West Virginia (August 28, 2007)] IN THE CIRCUIT COURT OF OHIO COUNTY, WEST VIRGINIA IN RE: TOBACCO LITIGATION (Individual Personal Injury cases) Civil Action No. 00-C-5000 (Judge Arthur M. Recht) ORDER At a hearing on May 23, 2007 set by agreement, respective counsel addressed the issues raised in Defendants’ Motion to Vacate the Trial Plan in Light of Williams and the responses filed attendant thereto. Upon the submissions and argument thereon, the court announced a denial of the motion and articulated the grounds therefor. Accordingly, it is hereby ORDERED: (1) Defendants’ Motion to Vacate the Trial Plan in Light of Williams is denied for the reasons assigned. (2) A copy of the transcript of the hearing held May 23, 2007 is attached and made a part of this Order as a reflection of the court’s holding. Defendants’ objections and exceptions are preserved. Entered this 28th day of August, 2007. s/ Hon. Arthur M. Recht 16a Judge Arthur M. Recht Presented by: s/ Timothy N. Barber by ctk Timothy N. Barber (WVSB #231) Post Office Box 11746 Charleston, WV 25339 (304)744-4400 Counsel for Plaintiffs 17a APPENDIX E [Transcript of Hearing May 23, 2007 In the Circuit Court of Ohio County, West Virginia] IN THE CIRCUIT COURT OF OHIO COUNTY STATE OF WEST VIRGINIA IN RE: TOBACCO LITIGATION: CASE NO. 00-C-5000 PERSONAL INJURY CASES: * * * MOTION TO VACATE TRIAL PLAN Before: HON. ARTHUR M. RECHT May 23, 2007 11:15 a.m. * * * Whereupon the above entitled matter came on for hearing at the Ohio County Courthouse, Wheeling, West Virginia, and the proceedings were as follows: * * * APPEARANCES: ON BEHALF OF THE PLAINTIFFS: CINDY J. KIBLINGER, Esquire James F. Humphreys & Associates, L.C., One Bank Center, Suite 1113, 707 Virginia Street, East, Charleston, West Virginia 25301 and 18a TIMOTHY N. BARBER, Esquire P.O. Box 11746, Charleston, West Virginia 25339- 1746 and KENNETH B. McCLAIN, Esquire SCOTT HALL, Esquire Humphrey, Farrington & McClain, P.C., P.O. Box 900, Independence, Missouri 64051-0900 ON BEHALF OF PHILIP MORRIS: ANDREW GADDES, Esquire BRUCE W. CLARK, Esquire JASON MURTAGH, Esquire Dechert, Price & Rhoads, 4000 Beil Atlantic Tower, 1717 Arch Street, Philadelphia, Pennsylvania 19103- 2793 and PAMELA L. CAMPBELL, Esquire THERESA THOMPSON, Esquire Allen, Guthrie & McHugh, 1300 Bank One Center, P.O. Box 3394, Charleston, West Virginia 25333- 3394 ON BEHALF OF LORILLARD TOBACCO COMPANY: JOHN R. MUSGRAVE, Esquire MICHAEL B. MINTON, Esquire Thompson & Coburn, LLP, One Mercantile Center, St. Louis, Missouri 63101 and 19a JOSEPH M. FARRELL, JR., Esquire Farrell, Farrell & Farrell, L.C., The Farrell Building, 914 Fifth Avenue, P.O. Box 6457, Huntington, West Virginia 25772-6457 ON BEHALF OF R. J. REYNOLDS TOBACCO COMPANY: JEFFREY FURR, Esquire THOMAS SCHROEDER, Esquire Womble Carlyle Sandridge & Rice, Post Office Drawer 84, Winston-Salem, North Carolina 27102 ON BEHALF OF BROWN & WILLIAMSON TOBACCO CORPORATION and R.J.R REYNOLDS TOBACCO: BRACE R. MULLETT, Esquire Dinsmore & Shohl, LLP, 1900 Chemed Center, 255 East Fifth Street, Cincinnati, Ohio 45202-3172 ON BEHALF OF LIGGETT GROUP, INC., LIGGETT & MEYERS, INC., AND BROOKE GROUP LIMITED: MARK TROY, Esquire Bailey & Wyant, PLLC, 505 Capitol Street, Suite 1007, Post Office Box 3710, Charleston, West Virginia 25337 * * * PROCEEDINGS * * * THE COURT: Okay, Be seated, please. Good afternoon, everybody. 20a MR. FURR: Good afternoon, Your Honor. THE COURT: All right. We got some matters to address here today, I guess. I don’t know the order that you want to take them in. I guess probably something that we should address and dispose of as expeditiously as possible is the defendants’ motion to vacate the trial plan in light of the recent United States Supreme Court case of Philip Morris versus Williams. Were you stretching or did you— * * * (Laughter.) > = MR. GADDES: Sorry, Your Honor, I was getting ready to talk, but looks like Your Honor might have something else to say first. THE COURT: I have read it all, read everybody’s papers. And I always like to hear good argument, but as I—this is now the second time that we're back looking at the validity, I guess, of the original case-management plan. The first was in light of the Campbell case, and now in light of the Wilhams case. And do either of those cases do anything to recommend an alteration to the case- management plan? As you all know, we’re not going to rehash Campbell. The West Virginia Supreme Court has spoken on that, and that’s the final word. The question now is: What has Williams added or subtracted at all to what the West Virginia Supreme Court has said in terms of validating the case-management plan? 2la If you—this is how I look at Williams as it relates to the case-management plan. And I believe the core holding—anytime the United States Supreme Court gets involved in discussing punitive damages, there’s a hell of a lot more heat than light on where we're going. You end up just eating your own tail as to really what they’re trying to say. But I think what, in this case, Justice Breyer was saying that—he says: The question we addressed today concerns a large state court punitive damage award, and we're asked whether the constitution’s due-process clause permits a jury to base that award in part upon its desire to punish the defendant for harming persons who are not before the Court, for example, victims whom the parties do not represent, and we hold that such an award would amount to taking the property from the defendant without due process. I guess, basically, the core of what they were trying to say—they use a lot of words to say that, but I think that’s basically what they were saying, and I believe that, in this case, that we simply do not have parties who are not before the Court. Everybody, every plaintiff in this case, is a party in the whole scheme of things, both in terms of Phase I and Phase II. There are a group of plaintiffs; there are no non-parties in this case. At some point in Phase IJ you're going to get down to specifics relating to individual plaintiffs on issues of causation and other individual issues that have to be decided, and how they may have been harmed by a particular product, and to the extent would the multiplier, if in fact there is a multipler, 22a apply to any compensatory award. But that’s in Phase II. Phase I, which would be tried basically when you try the product defect, and, as we said way back— and the case of Alkire versus First National Bank of Parsons probably does more to assist in formulating how a punitive-damage claim should be tried, I think, than every court in the United States. Just so happens in this case it applies to West Virginia because it sets out—it doesn’t get too confused. You see, the problem—what many times happens, I think, in punitive damage is, you start to overlap when you get into the issues of the size of the award, the ratios, reprehensibility, and that becomes mixed into the whole question of whether or not you're even entitled to punitive damages. Everything gets—it’s one big stew, and what we try to do in West Virginia is to make it a little easier. And that was—what we said in Alkire is: Okay, forget about TXO and forgot about Garnes initially; just put that aside; don’t jump to that yet. Let’s first off, obviously, determine if there’s liability and, then, determine under the standard of Mayer versus Frobe, the standard which we still use in these kind of cases. There are some other punitive damage cases that use another standard, but that’s not involved here. There’s an actual malice standard in some insurance cases which doesn’t apply here. But you then put on your evidence and—as we'll do in this case—and the conduct of all the defendants as it relates to Mayer versus Frobe once we get into the—into that phase of the case. 23a And the jury will be asked initially—well, even before we get there, there will be a determination made, as a matter of law, as to whether or not that question should even go to the jury: Is there enough evidence presented that would carry to the jury whether or not the standard of Mayer versus Frobe have been violated? Let’s say: Yes, there has been. So the jury gets the question. Initially, when you—on your first part of the case here, you'll be arguing product defect and conduct. That’s all at that point. And the jury comes back, and let’s assume the product is defective by whatever standard we use, they come back and say: Yes. All the defendants have acted improperly insofar as all the plaintiffs are concerned in this case. They won't know them, of course; we know them. But their conduct is such that, once a plaintiff shows that they smoked that particular product, then they would be the beneficiary of whatever punitive damage award would be awarded. Now you get, now you get down—it’s over; that part’s over. You tell the jury: Go home, come back the next day. Next day you come back, and now you try all the issues of reprehensibility, of—well, of TXO and Garnes and all the standards that are contained in those cases. That's where you get to the relationship between the harm, and you get to the question of repre— reprehensibility seems to be on everybody's mind in Williams. You get to that as it relates to the plaintiffs in this case. There are no nonparties. I guess that’s a terrible —probably bad English, but that’s why I don’t think Williams even—as, a matter of fact, I quite frankly 24a thought, and I said it—I thought Campbell was a case that may have impacted more on this plan than did the Williams case, and it didn’t, well, according to the West Virginia Supreme Court. So I'm not going to change the trial plan. Asa matter of fact, if—and maybe it was the mood that I was in this past weekend when I looked at this thing. I feel stronger than ever that it is—that it is a proper plan. It’s going to take a lot of work; it’s not easy. We're going to have to be very, very skillful in how we—in one of your papers, you said: Doesn’t make any difference about the interrogatories. I think the verdict form here and how we approach the jury is going to be very important. We can’t ignore that. But I think that’s—that’s how this case can proceed on without in any way—now, maybe the United States Supreme Court will get another case and maybe come out, and things will be a little different. Hopefully, this case will be tried at least at this level before then. So for those reasons, the motion to vacate the trial plan will be denied, and the objection of the—all the defendants will be saved to that ruling. All right. I don’t know what else we have. We have now— there’s a motion—is this set for today, the motion to dismiss the 58 plaintiffs? MR. HALL: The agenda letter we got, Your Honor, only had the motion to vacate the trial plan. THE COURT: What else are we hearing today? MR. LONG: Novhing, that was all that was on the agenda letter. THE COURT: That’s all? MR. LONG: Yeah. THE COURT: That’s all we came for? MR. LONG: That’s it. THE COURT: You drove all this way? Well, I shouldn’t say that. You mean, I spent all this time. Is that all we’re doing today? MR. McCLAIN: As far as we know. THE COURT: Is that all we’re going to today? MR. GADDES: Uh-huh. THE COURT: When are we doing this other stuff? MR. McCLAIN: Later. THE COURT: Okay. Well, everybody. Now, you know—let’s now get—we know we have a trial date set. Now, gentlemen, ladies, whatever you want to do, you do. MR. FURR: We understand. THE COURT: You've never stood on ceremonies before. My skin is, in this case, is as a rhinoceros. You just do what you have to do. But right now we re still set for March 17th. And you want me to give you another date for some of this other stuff. What do you want me to do? I got the whole afternoon. I got to go home and play with my dog. MR. HALL: I think that’s the big issue before the Court, honestly, Your Honor, and some of these other issues are fairly inconsequential. I don’t see a real need to set up a hearing and come back here for another 20 minutes to deal with some of the— 26a THE COURT: No, as a matter of fact, some of this stuff, quite frankly, and we have before, if you want to deal with it by telephone, we can do it by telephone, I don’t care. MR. McCLAIN: We would prefer that if you would do that. THE COURT: Doesn’t make any difference to me. That's fine. Are things moving along on these— I gathered, in regard to these encumbered plaintiff thing—I don’t understand what’s going on, to tell you the truth. But it’s not set for today, then we better set it down fairly quickly. Get a time when everybody is all right here and then give Doreen a call and set it down. If you want to it by phone, be happy to do it by phone. All right. Sorry to get you all out. MR. McCLAIN: Thank you, Judge. MR. HALL: Thank you, Your Honor. * * * (This hearing was concluded at 1:45 p.m.) * * * CERTIFICATE * * * I, Katherine L. Warren, Official Court Reporter for the State of West Virginia, do hereby certify that the foregoing is a true and accurate transcript of the proceedings as taken stenographically by me at the time and place aforementioned. Katherine L. Warren, C.C.R. 2/a Certified Court Reporter 28a APPENDIX F [Opinion and Order of the Circuit Court of Ohio County, West Virginia (December 26, 2006)] IN THE CIRCUIT COURT OF OHIO COUNTY, WEST VIRGINIA IN RE: TOBACCO LITIGATION (INDIVIDUAL PERSONAL INJURY CASES) Civil Action No. 00-C-5000 (JUDGE ARTHUR M. RECHT) MEMORANDUM OF OPINION AND ORDER (Scope of issues to be tried in Phases I and Ia of the Case Management Order) The defendants appear to be vexed concerning the issues to be tried in phase I (the defect, if any, of each defendant’s product) and Ia (each defendant’s conduct). Hopefully, this opinion and order will remove any confusion about what will be tried in phase [.! Phase I concentrates on each defendant’s product in terms of whether it was defective and the conduct of each defendant to the extent that a punitive damage award is warranted against each defendant, 1 There are actually only two phases contemplated by the case management order. Phase I, which collectively includes each defendants product defect, if any, and each defendants conduct measured against the standards of Mayer v. Frobe, 40 W. Va. 246, 22 S.E. 58 (1895), Phase II, which includes individual plaintiff issues of causation, extent of injuries and damages. Throughout the remainder of this opinion references will be made only to Phase I and its broadest sense and, if necessary, Phase II, as opposed to phases I and Ia. 29a and if so, what the punitive damage award should be expressed in terms of a punitive damage multiplier. The perspective of Phase I is each defendant’s product and each defendant’s conduct. Testimony will concentrate on each defendant’s product vis-a-vis product defect with appropriately formulated interrogatories dedicated to each defendant. Phase I testimony will also concentrate on each defendant’s conduct within the framework of Mayer v. Frobe, supra. At the close of the case a determination will be made as to whether, as a matter of law, the jury should determine if any of the defendants’ conduct justifies a punitive damage award: If that determination is in the affirmative to any or all defendants, the jury will be given appropriate formulated interrogatories directed to that defendant whose conduct as a matter of law warranted further jury consideration. In the event the jury finds that any defendants’ conduct warrants a punitive damage award, then further testimony will be presented to the jury within the paradigms contained in: Garnes v. Flemming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991); TXO Prod. Corp. v. Alliance Res. Corp., 187 W.Va. 457, 419 S.E. 2d 870 (1992); and Campbell v. State Farm, 530 U.S. 408, 123 S.Ct. 1134, 155 L.Ed.2d 585 (2003), to determine the amount of the punitive damage award, again expressed within an appropriately formulated interrogatory. See, Alkire v. First National Bank of Parsons, 197 W.Va. 22, 475 S.E.2d 122 (1996). It is so ORDERED. 30a A copy of this Memorandum of Opinion and Order has been mailed this date to liaison counsel for the plaintiffs, Cindy Kiblinger, Esquire, James F. Humphries and Associates, United Center, 505 Virginia Street East, Suite 800, Charleston, WV 25301; and liaison counsel for the defendants, Pamela Kandzari Campbell, Esquire, Allen Guthrie McHugh and Thomas, P.O. Box 3394, Charleston, WV 25301. ENTER this 26th day of December, 2006. s/ ARTHUR M. RECHT, JUDGE 3la APPENDIX G [Opinion of the Supreme Court of Appeals of West Virginia (December 2, 2005)] Supreme Court of Appeals of West Virginia. In re TOBACCO LITIGATION (Personal Injury Cases) No. 32552. Submitted: Sept. 20, 2005. Filed: Dec. 2, 2005. Syllabus by the Court The United States Supreme Court’s decision in State Farm v. Campbell, 538 U.S. 408 (2003), does not preclude the bifurcation of a trial into two phases wherein certain elements of liability and a punitive damages multiplier are determined in the first phase and compensatory damages and punitive damages, based on the punitive damages multiplier, are determined for each individual plaintiff in the second phase. Justice MAYNARD delivered the Opinion of the Court. Justice STARCHER concurs and reserves the right to file a concurring opinion. Justice BENJAMIN concurs and reserves the right to file a concurring opinion. MAYNARD, Justice. This case concerns the following certified question from the Circuit Court of Ohio County: 32a Does the Due Process Clause of the Fourteenth Amendment to the Federal Constitution, as interpreted by State Farm v. Campbell, preclude a bifurcated trial plan in a consolidated action consisting of personal injury claims of approximately 1,000 individual smokers, wherein Phase I of the trial would decide certain elements of liability and a punitive damages multiplier and Phase II of the trial would decide for each plaintiff compensatory damages and punitive damages based upon the punitive damages multiplier determined in Phase [? For the reasons that follow, we answer the certified question in the negative. I. FACTS On September 28, 1999, then Chief Justice Larry Starcher entered an administrative order, pursuant to Rule 26 of the West Virginia Trial Court Rules for Trial Courts of Record, consolidating and transferring all similar tobacco litigation pending at that time to the Circuit Court of Ohio County with Judge Arthur M. Recht, a member of the Mass Litigation Panel, presiding. According to the parties, the litigation now includes approximately 1,100 individual plaintiffs’ claims. On January 11, 2000, the circuit court entered a “Case Management Order/Trial Plan’? that ordered 2 This Court has recognized that trial courts have significant leeway in implementing a mass trial format. State ex rel. Mobil Corp. v. Gaughan, 563 S.E.2d 419 (2002), cert denied, Mobil Corp. v. Adkins, 537 U.S. 944 (2002). In Syllabus Point 3 of 33a the consolidation of all pending personal injury tobacco cases in a single consolidated trial, with the trial issues to be bifurcated as follows: (a) Phase I-General liability issues common to all defendants including, if appropriate, defective product theory; negligence theory; warranty theory; and any other theories supported by pretrial development. Also to be tried in Phase I will be entitlement to punitive damages|.] (b) Phase II-Individual claims of the plaintiffs whose cases have been consolidated. Either separate individual juries, judge or judges will independently address issues unique to each plaintiffs compensatory damages and any other individual issues in reasonably sized trial groups or on an individual basis. The defendant tobacco companies ultimately moved to revise this trial plan by removing the issue of the entitlement to and, if appropriate, the amount of punitive damages from the jury’s consideration in Phase I of the trial based on the U.S. Supreme Court case of State Farm v. Campbell, 538 U.S. 408 (2003). By order of June 16, 2004, the circuit court vacated and set aside the January 11, 2000, trial plan order. The circuit court found that Campbell stands for the principle that the conduct of a party against whom State ex rel. Appalachian Power Co. v. MacQueen, 479 S.E.2d 300 (1996), we held: A creative, innovative trial management plan developed by a trial court which is designed to achieve an orderly, reasonably swift and efficient disposition of mass liability cases will be approved so long as the plan does not trespass upon the procedural due process rights of the parties. 34a punitive damages are sought must have a direct nexus to a specific person who claims to have been damaged by that conduct. The circuit court further found that “[t]he emphasis upon a_ subjective analysis of the defendant's conduct vis-a-vis a specific plaintiff requires that the defendant’s conduct be tailored to each plaintiff],]” and concluded that this could not be accomplished under the existing trial plan order. The circuit court certified the question set forth above to this Court in a September 24, 2004, order and answered the question in the affirmative. II. STANDARD OF REVIEW “The appellate standard of review of questions of law answered and certified by a circuit court is de novo.” Syllabus Point 1, Gallapoo v. Wal-Mart Stores, Inc., 475 S.E.2d 172 (1996). IIl. DISCUSSION The issue before is whether the United States Supreme Court’s decision in State Farm v. Campbell, 538 U.S. 408 (2003) precludes bifurcation as originally ordered by the circuit court wherein the punitive damages multiplier would be determined prior to the assessment of compensatory damages for each plaintiff. The plaintiffs below support the circuit court’s vacated trial plan. They assert that the plan did not violate Campbell, which, they allege, is not a 35a fundamental change of long-standing punitive damages law but rather is perfectly consistent with such law. The defendant tobacco companies, on the other hand, challenge the circuit court’s trial plan essentia!ly on the basis that it violates Campbell by permitting the plaintiffs to show the reprehensibility of the defendants’ conduct,? for the purpose of proving the appropriateness of punitive damages, by admitting evidence of conduct that was dissimilar to the conduct that injured particular plaintiffs. The defendants assert that evidence of prior bad conduct must be related to the defendant’s actions toward individual plaintiffs in order to be relevant to the punitive damages analysis. In Campbell, the insureds brought an action against their insurer, State Farm, to recover for bad- faith failure to settle within the policy limits and damages for fraud and intentional infliction of emotional distress. A jury awarded the insureds $2.6 million in compensatory damages and $145 million in punitive damages, which the trial court reduced to $1 million and $25 million respectively. On appeal, the Utah Supreme Court reinstated the $145 million punitive damages award. The United States Supreme Court subsequently reversed the punitive damages award because it found it to be “neither reasonable nor’ proportionate to the wrong committed,” and “an irrational and _ arbitrary 3 In Garnes v. Fleming Landfill, Inc., 413 S.E.2d 897 (1991), this Court held that the jury may consider the reprehensibility of the defendant's conduct including whether and how often the defendant engaged in similar conduct in the past. We believe that Campbell does not materially alter this holding. Rather, Campbell generally addresses the requirement that evidence of prior bad conduct must be “similar.” 36a deprivation of the property of the defendant” in violation of the Fourteenth Amendment. Campbell, 538 U.S. at 429. The Court explained that the insureds’ attempt to show the reprehensible conduct of State Farm by introducing evidence of State Farm’s business practices for over 20 years in numerous states was constitutionally improper. According to the Court: The [insureds] have identified scant evidence of repeated misconduct of the sort that injured them. Nor does our review of the Utah courts’ decisions convince us that State Farm was only punished for its actions toward the [insureds]. Although evidence of other acts need not be identical to have relevance in the calculation of punitive damages, the Utah court erred here because evidence pertaining to claims that had nothing to do with a third-party lawsuit was introduced at length. Other evidence concerning reprehensibility was even more tangential. For example, the Utah Supreme Court criticized State Farm’s investigation into the personal life of one of its employees and, in a broader approach, the manner in which State Farm’s policies corrupted its employees. The [insureds] attempt to justify the courts’ reliance upon this unrelated testimony on the theory that each dollar of profit made by underpaying a third-party claimant is the same as a dollar made by underpaying a first-party one. For the reasons already stated, this argument is unconvincing. The reprehensibility guidepost does not permit courts to expand the scope of the case so that a defendant may be punished 37a for any malfeasance, which in this case extended for a 20-year period. In this case, because the [insureds] have shown no conduct by State Farm similar to that which harmed them, the conduct that harmed them is the only conduct relevant to the reprehensibility analysis. 538 U.S. at 423-24 (citations omitted). After carefully considering the parties’ arguments and the Supreme Court’s decision in Campbell, this Court finds that Campbell, which did not involve mass tort litigation, does not per se preclude the circuit court’s original trial plan. We emphasize that the question before this Court is a narrow one. Accordingly, our answer is strictly limited to this narrow question. Our response is limited to the issue of whether State Farm ov. Campbell precludes a bifurcated trial plan like the one below. Further, we do not address whether there may be other legal reasons to question the circuit court’s bifurcated trial plan. Nor do we, or indeed can we, address in the abstract the specific evidence that may be presented on the issue of reprehensibility. Our conclusion in this case simply is, first, we find nothing in Campbell that mandates a reexamination of our existing system of mass tort litigation. Second, we find nothing in Campbell that per se precludes a bifurcated trial olan in which a punitive damages multiplier is established prior to the determination of individual compensatory damages. Beyond this, we leave more specific issues for another day. As this Court stated in State ex rel. Mobil Corp. v. Gaughan, 563 S.E.2d 419 (2002), we cannot substantively address Mobil’s concerns regarding the potential use of a 38a matrix, or a punitive damage multiplier, because the trial court has not yet definitively ruled upon the use of either of these mechanisms. Accordingly, any consideration of these issues at this time would be clearly premature. The trial court’s announcement to postpone for the time being, any decision regarding the potential use of a matrix underscores the precipitous nature of ruling on this issue at this juncture. Matters such as a matrix and the use of a punitive damage multipher, given the unresolved nature of the use of such mechanisms, can be better addressed by this Court upon appeals taken from final orders. Gaughan, 563 S.E.2d at 426. Similarly, in the instant case, any issue beyond that set forth in the certified question is one that this Court will only consider on appeal with the benefit of a fully developed record and a final order. To reiterate, it is clear to this Court that Campbell does not eliminate mass tort litigation as provided for in our Trial Court Rule 26. Further, it is significant to us that bifurcated trial plans structured like the one at issue are common in West Virginia as well as other jurisdictions. In sum, absent a clear indication to the contrary, we believe that Campbell does not preclude the bifurcated trial plan at issue. The circuit court found in its order setting aside its original trial plan, and the defendants agree, that “the conduct of a party against whom punitive damages are sought must have a direct nexus to a specific person who claims to have been damaged by that conduct.” Further, “[t]he emphasis upon a subjective analysis of the defendant’s conduct vis-a- 39a vis a specific plaintiff requires that the defendant’s conduct be tailored to each plaintiff. That cannot be accomplished under the existing Case Management Order.” We reject the circuit court’s application of Campbell. Campbell stands for the principle, among others, that “fa] defendant’s dissimilar acts, independent from the acts upon which liability was premised, may not serve as the basis for punitive damages. A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business.” 538 U.S. at 422-23. Notably, the facts in Campbell were quite extreme. As noted above, the plaintiffs in Campbell brought what the Supreme Court characterized as a third-party bad faith claim against their insurer. In order to show the reprehensibility of the insurer’s conduct, the plaintiffs were permitted to introduce evidence of insurer misconduct that had nothing to do with the type of misconduct that injured them. “For example, the Utah Supreme Court [in upholding the verdict in Campbell] criticized State Farm’s investigation into the personal life of one of its employees and, in a broader approach, the manner in which State Farm’s policies corrupted its employees.” Campbell, 538 U.S. at 424. In application of this principle to the instant case, it is the role of the circuit court to ensure that the plaintiffs’ evidence is relevant, reasonably related to the acts upon which liability is premised, and supports their claim for punitive damages. Therefore, we find nothing in the circuit court’s original trial plan that prevents the admission of evidence that is proper under Campbell. 40a Another concern raised by the defendants is that the circuit court’s original trial plan would not ensure that punitive damages are proportionate to the injury caused to individual plaintiffs. Again, we disagree. As noted above, the circuit court’s original trial plan anticipates that the defendants’ general liability and a punitive damages multiplier would be determined in the first trial phase. In the second phase, compensatory damages would be determined for each individual plaintiff after individual evidence is presented. Finally, the punitive damages multiplier determined in the first phase would be applied to each plaintiffs compensatory damages award in order to reach the proper amount of punitive damages for each plaintiff. Concerning the proper ratio of punitive damages to compensatory damages, the Court in Campbell opined, we have been reluctant to identify concrete constitutional lhmits on the ratio between harm, or potential harm, to the plaintiff and the punitive damages award. We decline again to impose a bright-line ratio which a punitive damages award cannot exceed. Our jurisprudence and the principles it has now established demonstrate, however, that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process. In Pacific Mut. Life Ins. Co. v./] Haslip, [499 U.S. 1 (1991)] in upholding a punitive damages award, we concluded that an award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety. 4la We cited that 4-to-1 ratio again in [BMW of North America, Inc. v.] Gore, [517 U.S. 559 (1996)]. The Court further referenced a long legislative history, dating back over 700 years and going forward to today, providing that sanctions of double, treble, or quadruple damages to deter and punish. While these ratios are not binding, they are instructive. They demonstrate what should be obvious: Single-digit multipliers are more likely to comport with due _ process, while still achieving the State’s goal of deterrence and retribution, than awards with ratios in range of 500 to 1, or, in this case, 145 to 1. Campbell, 538 U.S. at 424-425 (citations omitted). The defendants below contend that by determining the punitive damages multiplier prior to determining individual compensatory damages, there is no way to ensure the proper ratio between the two. We disagree. This Court has recognized the duty of trial courts to review punitive damage awards. See Bowyer v. Hi- Lad, Inc., 609 S.E.2d 895, 910 (2004) (stating that “fijJf a jury awards punitive damages to a litigant, a circuit court must carefully review the jury’s verdict”); Garnes v. Fleming Landfill, Inc., 413 S.E.2d 897 (1991) (setting forth the factors for trial courts to consider when reviewing awards of punitive damages). In cases like the instant one, we are confident that once individual compensatory and punitive damages awards are determined, the trial court can review each of the awards to ensure that it 42a comports with the principles articulated in Campbell and other applicable cases.‘ Therefore, we now hold that the United States Supreme Court's decision in State Farm v. Campbell, 538 U.S. 408 (2003), does not preclude the bifurcation of a trial into two phases wherein certain elements of liability and a punitive damages multiplier are determined in the first phase and compensatory damages and punitive damages, based on the punitive damages multiplier, are determined for each individual plaintiff in the [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_0401%3A1. Public record. Not legal advice.