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Page 460 DEFENSE COUNSEL JOURNAL–October 2012assessed a punitive damage multiplier ‘foreach $1.00 of actual damages,’” invarying amounts for the differentdefendants involved. 40 Ultimately, thejudgments in the trial court werevacated. 41 The latter proceedings,however, did not attack the use of amultiplier. Rather, the appeals court tookissue with the lower court’s use ofstatistical methods to extrapolate awardsfor class members based on awardsdetermined for sample plaintiffs. 42The Fifth Circuit considered the useof a punitive damage multiplier again inWatson v. Shell Oil Co. 43 AlthoughWatson was later reversed en banc, 44 thecase provides further insight into the useof a punitive damage multiplier in a masstort action. Watson arose out of anexplosion at a manufacturing facility thatcaused extensive damage throughout theplant and surrounding communities. 45The court posited that where thedefendant’s culpability is determined inconnection with one single event in amass-disaster context, there is likely to beless variance between punitive damageawards with respect to different plaintiffsand, therefore, a multiplier approach todetermine punitive damages for the entireclass may be appropriate. 46 The courtwent on to note that to the extent thatplaintiffs’ claims for punitive damages40 Id.41 See generally Cimino v. Raymark, 151 F.3d297, 335 (5th Cir. 1998).42 Id.43 Watson v. Shell Oil. Co., 979 F. 2d 1014,1016-17 (5th Cir. 1992), reversed en banc, 53F.3d 663 (5th Cir. 1994).44 Id.45 Id. at 1016-1017.46 Id. at 1019.differ, a phased trial plan that utilizes amultiplier can be refined by settingdifferent ratios or multipliers for differenttypes of claims, rather than casting asidethe method altogether. 47 A refinedapproach using different multipliers fordifferent types of claims presumablywould allow the defendants anopportunity to present defenses tailored tothe specific categories of claims withoutrequiring individual determination ofpunitive damages with respect to everyplaintiff. The refined approach would bemore fair to the defendants, less likely todeny defendants an opportunity to presenta defense, and would still increasejudicial efficiency.B. West VirginiaThe Supreme Court of Appeals ofWest Virginia discussed the use of apunitive damage multiplier in the contextof a mass tobacco litigation involvingconsolidation of 1,100 individual claimsby smokers against tobacco companies. 48The court considered whether a bifurcatedtrial, where liability and a punitivedamage multiplier are determined inphase I, prior to a finding ofcompensatory damages for each plaintiffin phase II, violates the Due ProcessClause as interpreted by the U.S.Supreme Court in State Farm v.Campbell. 49The defendant tobacco companiesobjected to the bifurcated trial plan, andthe determination of a punitive damage47 Id. 1019 n.19.48 In re Tobacco Litigation, 624 S.E.2d 738(W.Va. 2005).49 538 U.S. 408 (2003).
Predictability In Punitive Damages Page 461multiplier prior to individualcompensatory damages, on two grounds:(1) the plan failed to ensure that punitivedamages would be proportionate to theinjury caused to individual plaintiffs; and(2) the plan failed to ensure a proper ratiobetween punitive and compensatorydamages. 50 The trial court rejected thesearguments stating that individualcompensatory damages would bedetermined in phase II, based onindividual evidence, and then themultiplier from phase I would be appliedto determine the punitive damageaward. 51 Furthermore, the court wouldhave the ability to review individualpunitive and compensatory damages oncethey were determined to ensure that theawards do not violate State Farm andother relevant case law. 52 The appellatecourt in In re Tobacco Litigation,however, did not rule on the use of amultiplier, and made no judgment as towhether the proposed trial plan was thebest way to proceed. 53 Rather, theappellate court narrowly held that theSupreme Court’s decision in State Farm“does not preclude the bifurcation of atrial into two phases wherein certainelements of liability and punitive damagemultiplier are determined in the firstphase and compensatory damages and50 In re Tobacco Litigation, 624 S.E.2d at 742-743.51 Id. at 742; see also State of West VirginiaEx. Rel. Chemtall Inc, et al. v. Madden, 655S.E.2d 161, 166-167 (W.V. Sup. Ct. of App.2007) (affirming a two-phase trial in whichpunitive damages multipliers were consideredprior to the determination of individualcausation and compensatory damages).52 Id. at 743.53 Id.punitive damages, based on a punitivedamage multiplier, are determined foreach individual plaintiff in the secondphase.” 54The concurring opinion in In reTobacco Litigation highlights anadditional argument asserted by thedefendants and provides insight into thebenefits of a punitive damage multiplierapproach. Defendants argued that theyhad a due process right to try the issue ofpunitive damages one case at a time inorder to allow the jury to assess thedefendant’s culpability with respect toeach individual plaintiff. 55 Theconcurring judge pointed out that if themajority had accepted such an argument,it would effectively mean that thedefendant would have a right tothousands of trials, which would result inadministrative gridlock in the courtsystem, and would deny individualplaintiffs their day in court. 56 Bycontrast, having the jury determine apunitive damage multiplier that“establishes a numerical relationshipbetween the potential harm of thedefendant’s conduct and the plaintiff’scompensatory damages” allows plaintiffstheir day in court, and permits thedefendants to contest a claim for punitivedamages in one proceeding. 57 If such aprocess were utilized, plaintiffs anddefendants would have a “just, speedy,and inexpensive determination of everyaction.” 58A federal court in West Virginia alsohas addressed the issue of punitive54 Id.55 Id. at 748 (Starcher, J., concurring).56 Id. at 749.57 Id.58 Id.
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