South-Western Legal Studies in Business

Private Parties in Georgia May Not Seek Punitive Damages Against Cigarette Makers
Description Georgia high court held that the settlement the state entered into with the cigarette makers to cover the cost of health services provided by the state to tobacco users included a prohibition on further claims for punitive damages.
Topic Torts
Key Words Products Liability; Punitive Damages; Parens Patriae Doctrine; Cigarettes
C A S E   S U M M A R Y
Facts In 1997 the State of Georgia sued the cigarette makers for product liability and sought compensatory and punitive damages to recover health costs incurred by the state that could be attributed to smoking. The companies agreed to pay the state $4.8 billion. The state, acting in parens patriae, agreed to release the cigarette makers “absolutely and unconditionally” from all health related claims. The estate of Freeman sued a cigarette maker for causing Freeman to die from lung cancer from smoking. The federal district court asked the Georgia high court to explain the impact of the settlement with the cigarette makers on this action.
Decision

The punitive damages collected by the state as parens patriae on behalf of its citizens as part of the settlement were in the public interest. They were not designed to benefit individual private parties. Punitive damages, unlike compensatory damages, serve the public interest by punishing and deterring wrongdoers. Hence, the issue of punitive damages that could result from cigarette use has been settled and may not be litigated again. Freeman’s estate may not sue for punitive damages.

Citation Brown & Williamson Tobacco v. Gault, ---S.E.2d--- (2006 WL 584320, Sup. Ct., Ga., 2006)

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