-: SJC-13330
Frederick Douglas Greene and another
v. Philip Morris USA Inc.
-: Okay, Attorney Chesin.
-: Good morning, Your Honors, and may it please the court,
Scott Chesin from Shook Hardy for Philip Morris.
Your Honors, the plaintiff prevailed in this case
on a claim for conspiracy to commit fraud
even though she testified
that she neither began smoking as a child,
nor continued smoking as an adult
because she was misled by anything
that the defendant or an alleged co-conspirator said
about the dangers of smoking.
The jury found in her favor anyway,
having been given the exact instruction on causation
that this court held two weeks after judgment entered
in this case was sufficiently confusing
as to potentially encourage jurors to find-
-: Can I ask the issue about waiver?
I haven't read all through these transcripts,
but I started reading the jury instructions last night,
and there's a fight about causation on the warranty issue.
And then were you trial counsel?
-: I was. Well I was the lawyer
at the charge conference, yes.
-: I take it this is you.
"I had but one proposed edit to the previous page 20."
"Okay, Mr. Chesin."
"In the third element, yeah,
the very last clause, namely that it was in the third,
you have only a minor,
I guess when I copy this it doesn't-
-: I get exactly what-
-: But you reference a substantial contributing cause,
but that's not your problem.
You only have a problem with a plural versus a singular.
-: I agree with Your Honor.
I know exactly where you're going with this.
I assume the question is,
was I indicating to Judge Kazanjian
that I acquiesced in the substantial-
-: More than that,
you weren't at all concerned about it.
-: And I understand the question.
Look, what I invite the court to do is to read that colloquy
in the context of the entire charge conference,
which began with a 10-page discussion over two things:
whether the court should give
the but-for causation instruction
that was word-for-word the instruction
that Your Honor discussed in duel,
and also our objection, which we made in great detail-
-: But the conversation,
you guys are talking around each other also
'cause she says, "I'm telling them
the cancer has to be caused by the smoking.
I'm making findings on causation."
And then you guys get into
a but-for substantial contributor cause,
but then conspiracy is much more,
and also this is a case
in which Philip Morris made the product,
they did the marketing,
they created the low-filter cigarette.
You got all the findings on the 93A.
This is not a case of what caused this.
It's really-
-: And that's precisely my point.
And you know, the plaintiff and the plaintiffs Amici
make a lot in the briefs of the fact
that this is a cigarette case
and it involves multiple exposures to a toxic product,
and isn't that similar to-
-: No, no, I'm not going there,
toxic toward who's responsible.
I'm just focusing on the fact that a couple of things.
One, the judge feels like the causation issue
is addressed by other parts of her instruction.
It may be confused
by her substantial contributing factor discussion,
but you win that claim, you win on the,
the one you lost, you actually won on,
and now we're just dealing with the conspiracy,
which is incredibly complicated
and different from a normal, simple negligent tort,
and you have no objections to the instruction on that?
-: And here's what I'll say.
And I would direct the court back
to that opening discussion.
I've written down,
here, I remember precisely what you're talking
about where the court says
I don't see how my instruction is misleading
because I tell them it has to be a cause.
And what I said to Judge Kazanjian was two things.
I said, "I want to make sure that the jury understands
that the baseline has to be but-for,
and only some but-for causes
are substantial enough to be legal causes."
And that's when the court says,
"I don't understand how I'm not telling them that."
And the next thing out of my mouth
was absent some sentence that says,
"If the harm would not have happened anyway,
the defendant is not liable,
the jury could conclude
that even if the harm happened anyway,
the defendant could still be liable."
-: What cause of action are you talking about
when you have that common-
-: We absolutely, we were talking
about the breach of warranty,
but what I will note is that in 10 pages of transcripts,
not once out of my mouth do I say the word warranty,
do I say the word defect.
-: I know that, but what I'm what but what I'm getting at
is conspiracy is what we're looking at here.
And you need to hone in to Judge Kazanjian
on why but-for is better
than substantial contributing cause
on conspiracy when conspiracy is a combinations
of persons acted pursuant to an agreement
to injure the plaintiff.
A conspiracy is different in a breach warranty.
It warrants, hold on,
it warrants a specific discussion about whether,
and you may be a 100% right.
I obviously don't agree,
but you might be a 100% right
that conspiracy should also be but-for.
It's a separate analysis
and that wasn't made to Judge Kazanjian.
And what I'm saying is this:
we submitted a set of written instructions
that for each of the causes of action,
our set of written instructions
and the plaintiff's set of written instructions,
defined causation using the pattern instruction
the first time it came up and then referred back.
And our set of instructions
alternatively used the words cause,
was a cause of, resulted from.
Plaintiff set of instructions continually used
the substantial contributing factor language.
And once we objected to the use
of substantial contributing factor made all of the,
we talked about the two fires and the two hunters,
and we read to the judge, "Can you comment from the third,"
excuse me? -: You were prescient
on the issue, but-
-: And my point is this,
I objected- -: By the way,
one thing I really want to do is
the big money is on 93A
and I got bigger problems with your argument on 93A.
So I just want to make sure you realize
we got questions there too, okay?
-: Oh, I'm here as long as you wanna keep me here.
-: No, I just wanted to give you an opportunity
to finish your sentence.
Is your point really that having gone back and forth
about but-for and substantial contributing factor
and having lost that battle
or at most have Judge Kazanjian put a point on it
and say, "I don't think I agree with you,"
then at that point she was on notice
that you guys were going for but-for
and that you were hearing loud and clear
she didn't hear, she didn't want to hear.
-: And that, look,
I don't mean to cast aspersions on Judge Kazanjian.
She was incredibly patient with us.
That charge conference in two sessions
went on for five hours.
And at one point, about 10 minutes into this discussion,
she said, "Counsel, you're trying,"
or I think I said, "It appears to me
that I'm trying the court's patience."
And she said, "Yes, you are."
At multiple points toward the end of the charge conference.
The next day when she gave the charge, she said,
"Anything you've argued, you don't need to argue again.
You are preserved."
The point of waiver analysis,
and I say this with all due respect to Your Honors,
you're the ones who make the rules,
is you don't want to incentivize smart litigants
not to point out an error,
let something happen,
and then come complain about it on appeal.
On the other hand, if you have made your point,
the futility cases that we argue in the briefs,
say if you have made your point clear
and it is clear that you've lost,
that five-hour charge conference could have been a 10-hour
or a 15-hour charge conference
if every one of the dozen similarly situated issues
we needed to repeat over and over again.
I would respectfully suggest
that no reasonable reader of that transcript
could think that if I had made that same argument
in that level of detail 10 days later-
-: I would push back on one point
which is the, you know,
the fight in duel aside,
the judge keeps emphasizing substantial contributing cause.
She doesn't use the word, you know,
she uses the word factor a couple times,
but she keeps emphasizing
the cause of the cancer here
is the smoking Marlboro Lights.
When we read her 93A decision,
again, one time she strays into this,
but she's very focused on the fact
that the deceitful acts,
in her words, that Philip Morris did
caused her to keep smoking Marlboro Lights
and that caused her cancer.
So she's not caught up in sort of this idea that,
I mean, again, you know, Justice Lowy and I will disagree
on whether but-for should have been
in the first part, two more expressly,
but her 93A findings
are really not affected
by the substantial contributing factor stuff.
-: Well, I may agree to disagree with Your Honor
on that point, but if I can back up,
I mean, just the structure of where we are here,
I've got a sufficiency arc.
Putting aside the correctness of the jury instructions.
It is our respectful contention
that the evidence was simply insufficient
under either standard of causation.
-: No, I know your argument is something
to the effect that she smoked knowing
that it was dangerous, but she liked the ads.
And the ads were It's Marlboro Country.
She liked the outdoors, she liked the cowboys.
-: To put a finer point on it,
if we're talking about 93A, no, that's not our argument.
93A involves acts that are taken by the defendant
sometime after the effective date, which is in 1979.
There are no television ads from 1971 on forward.
But the sole basis of Judge Kazanjian's finding of fact
on 93A is that, well after the Marlboro Country,
she says Mrs. Greene was misled by Philip Morris
into believing that Marlboro Light cigarettes
were less dangerous than Marlboro Regular cigarettes,
and that was a cause of the cancer.
And our argument is that second half of that conclusion
is unsupported by any evidence whatsoever
because Mrs. Greene testified affirmatively,
these are not concessions given on cross-examination,
this is in response to questioning from her own lawyer.
She says, "I thought they were less bad.
I smoked them because I thought they were healthier,
but I knew they were unsafe.
I knew they could cause cancer,
and as a result, I kept trying to quit consistently
the entire time I was smoking."
But doesn't she also, again,
this is gonna be in the light most favorable
to the other side.
Doesn't she also say, "Look, you know,
I thought they were better than the regular Marlboros.
No one told me, you know,"
there's sort of a multiple misrepresentation.
I know you talk about them as omissions
versus affirmative misrepresentations.
But doesn't she, when we go through this reading
in the light most favorable to her say,
"You know, they're Lights. They're less dangerous."
-: I'll give her more than that.
And we've said this in the briefs, I think,
I mean this was a disputed fact at trial,
but I think the evidence is sufficient
to allow a reasonable jury to conclude
that Mrs. Greene was misled
about whether Marlboro Lights
are safer than Marlboro Regulars.
But that's element one or element two.
Element three is did the deception,
did the reliance on a false statement cause the injury?
And our contention is the only way to read the testimony,
'cause it's her affirmative testimony,
is that she might have been smoking Marlboro Lights
because of a fraud,
but she wasn't smoking because of a fraud.
She said, "I was smoking.
That whole period. I smoked Marlboro Lights
despite repeated efforts to quit.
I was smoking because I couldn't stop."
-: In the light most favorable to the plaintiff
on the 93A, could the evidence be taken
that, "Well, I thought the Lights were better,
so, you know, I really didn't work as hard at it."
-: I'm glad you asked that.
So that is the linchpin,
I would say the sole basis
in Judge Kazanjian's order for finding causation.
There's one sentence in there.
She said the evidence was sufficient
or I am convinced that she was less motivated to quit.
And there was evidence that people
are less motivated to quit if they believe
that the product they're smoking is healthier.
And with all due respect to Judge Kazanjian,
I don't think the evidence
can possibly support that conclusion.
There was evidence from an expert,
there's testimony from an expert witness
who had never met Mrs. Greene,
who didn't know anything about Mrs. Greene,
hadn't read her testimony, who said that, "Yes,
some people when they are smoking what they perceive
to be a healthier product are less motivated to quit
and smoke that product Instead of quitting."
The testimony from Mrs. Greene,
again, affirmative testimony from the plaintiff
in this case was despite thinking they were healthier,
"I kept trying to smoke. I kept trying to quit."
Obviously, Your Honor should read the entire,
but I think the colloquy-
-: I think the trial judge does, you know,
she's very explicit that addiction means different things.
That, you know, if you think you're swallowing poison
versus you think you're swallowing something
that's less dangerous, it affects your will.
I mean, she's got a lot of this in here, right?
-: I understand that.
I would direct Your Honors to the following,
obviously read the whole, you know, back and forth
and the direct and the cross and the redirect.
On page 70 of the fifth volume
of the record appendix is the recross of Mrs. Greene,
it's Philip on redirect.
Mrs. Greene had testified because they're talking
about comparative negligence,
"I don't believe I bear any responsibility
for my injuries."
And so on recross, counsel for Philip Morris asked her,
"Why? What do you mean by that?
Why do you think that you are not responsible?"
She said, "Well, I started when I was a kid.
I switched to what I thought was the healthier alternative.
And even after I switched, I kept trying to quit."
She said that very definitively.
And she had earlier in her testimony,
said she'd given great details.
"I ripped up my cigarettes,
I dumped the tobacco out, I threw them away.
I used cherry lozenges, I used the gum, I used the patch."
My point is this-
-: Yeah, but one of the reasons she, you know,
she doesn't realize that she's actually,
you know, again, the conspiracy theory,
she doesn't realize that she's actually consuming
as much nicotine when she's doing that.
-: But she says, "I knew they could cause cancer."
And remember, every package of Marlboro Lights
that she smoked had a warning label on it
that at least after 1985 said, "This can cause cancer."
And before 1985 said,
"The Surgeon General has determined that these are-
-: But Aspinall says that if you're deceitful,
that's not protection, right?
Aspinall leaves it open that if you've engaged
in sort of this pattern of deceit,
they can still sue, right?
-: They can still sue.
And Aspinall was a consumer class action seeking a refund
of money for what the plaintiffs alleged
was the difference in the market price for what?
But even in the Aspinall decision, it expressly says
if this were a personal injury action,
the question of causation might be different.
And one way, or I mean,
the cases on 93A are very clear
that a plaintiff has to prove
that the violation caused the injury.
And so when the allegation is the violation is a conspiracy,
and my injury is I've been personally injured.
I think it is not a far, far leap to say
that the plaintiff has to- -: But the trial judge again,
she makes findings that gotta be clearly arise
that smoking Marlboro Lights caused the cancer,
and your client's deceitful acts
perpetuated her continuing for years
and years to smoke Marlboro Lights.
And it's that last point on which I take issue,
not as a matter of persuasiveness,
but as a matter of sufficiency of the evidence.
And it actually, it ties into the conversation we had
at the beginning about what the causation standard is.
You have to look at the hypothetical what if.
Yes, the judge made a finding
that she was smoking Marlboro Lights because of a deception.
But the question is, what would she have been doing
in the alternative universe where she hadn't been deceived?
-: Well, the judge, and again,
I may be confusing what she says in
'cause I read your back and forth with her
on jury instructions last night,
but the judge says, "Addiction's complicated.
Her willpower might have been different."
I don't know if she factors this in her decision
or in the back and forth with you.
-: I'm not actually sure either, but I know, yeah,
I know there is a, look,
there's a discussion in the 93A order
in which the judge says people are less motivated to quit
if they are addicted and they believe
that they're smoking a healthier product.
Justice Kafker: Product. -: And what I'm saying
is that that is a conclusion
that cannot be squared with the affirmative evidence
that comes from the complaint.
-: The problem from your perspective
is not- -: It appears I have several.
-: The law that's written on 93A, she says cause.
It caused.
It's whether or not the support
for that determination
at the trial. -: Right, I mean, look,
I'm making two nested arguments.
I'm saying that there was insufficient evidence
from which a rational finder effect
could have found that there was a cause.
And I'm saying even if I'm wrong about that,
at least with respect to the jury findings,
the jury was misinstructed on what it means-
-: On 93A only.
There's no problem with her determination
on causation on 93A as a matter of law.
The question is whether the record supports that.
-: Correct. Well, I will say, Your Honor is correct.
Our argument on 93A is that there's insufficient evidence.
I will say though, that if we get past waiver,
if Your Honor is believed there was an error
in the jury instructions
and the common law wrongful death
jury findings
on conspiracy need to be retried,
I do think that the prudent course would be
for Your Honors to vacate the judgment
in its entirety and send it back.
-: Why? She says it caused. -: She did.
But two things, number one, I mean,
I was watching the previous argument
where Your Honor said absent, you know,
there's case law that says absent some contrary indication,
you assume that the judge instructed herself correctly
on the law.
The contrary indication in this case,
I think is the judge's very firm holding
with respect to the instructions to the jury
that all that was required
was substantial contributing factor causation
rather than but-for causation.
But beyond that, the judge does make a number of,
you know, record supported findings of fact,
which don't depend on the jury verdict,
but when she gets to the end, she says,
I am expressly adopting the jury's measure of damages
and using that as the basis to impose treble damages,
which again is the judge's prerogative.
But in the circumstances where the judge has taken
an advisory verdict from a jury and applied it on 93A
rather than making independent findings,
if that jury verdict goes away, I do think that.
-: Yeah, but she's made her own independent findings
on causation whether the amount of damages she framed it at.
I don't quite see that point, but-
-: Well, I will say this.
I see, and Your Honors have very generously allowed me
to keep talking past the red light.
-: But not as long as Judge Kazanjian did. Please.
-: (laughs) We did.
Mr. Rainer was with me at the charge conference.
We did a lot of talking throughout this trial and the, yeah,
the judiciary has been very patient with us.
(judges laughing)
Before I sit down, I would be remiss
if I didn't say something about the interest issue,
which I suspect, but don't know,
might be the reason that I'm standing here
rather than somewhere else in this building for this case.
The jury in this case found that Mrs. Greene sustained
about two and a half million dollars in economic damages
as a result of this tort.
If we were to pay the judgment tomorrow,
we would be paying close to $16 million in interest.
-: Can I ask you about,
and (sighs) I understand
that this seems to be baggy thinking
on the part of the legislature
that they could easily draft a much better statute.
-: And they have with respect to the Commonwealth,
with respect to- -: But they haven't.
And at one point they adjusted it upwards
because inflation, right?
-: At three points they did that.
-: Right, yeah, so they do that multiple times,
but they haven't
sort of made the downward adjustment that you want.
-: In 21 years.
-: No, and I get it.
But no rational basis for this thing.
-: Look, here's my point.
And I'm not running from the standard.
I understand rational basis is a tough row to hoe,
but we cited to Your Honors in the briefs
at at least three times in the last century
where this court has said a statute that was constitutional
and rational when passed becomes irrational
and unconstitutional over the passage of decades
when circumstances change.
It happens on occasion.
It hasn't happened in the case of-
-: Has there ever been, and again,
I have confidence that this is well-argued
and well-researched.
Has there ever been a case, I mean,
their interest rates out there,
I assume is baggy in their thought process as Massachusetts,
has anyone ever declared one
of these interest statutes unconstitutional?
-: There's a trial judge in Illinois
who just a month or so ago declared
the Illinois 9% fixed interest rate to be unconstitutional.
It was based on that.
Justice Gaziano: When does this become unconstitutional?
-: At the point where it outstrips the purpose of the statute
or any permissible purpose of the statute
so much as to become punitive.
I can't tell you what the-
-: Well, that's the problem. -: The precise number.
-: Right, to become rational basis point.
Like if it, it was 7%, could you make this argument?
-: It would be closer, but even, look,
if the Commonwealth had been- -: Does it have
to track inflation?
-: So if the Commonwealth had been the defense-
-: Does it have to be as sophisticated as the Fed's or-
-: Absolutely not.
Look, the general court passed the statute
initially in the 19th century at some point,
and it had no interest rate at all.
It was adjusted upward in '74,
in '80, and in '82 and then they stopped.
-: If we concede, if we, for the sake of argument,
it's a bad statute, all right?
-: We're all on the same page.
I imagine plaintiff is as well.
-: All right, but it is the statute.
-: I don't think the plaintiff thinks
it's a bad statute. -: Perhaps not.
I think they like it.
-: I think they're enjoying this. (laughs)
-: In the response to, you know, we have to pay this
might be then stop causing so much damage.
But that might be their argument.
So if it's a bad statute of bad policy,
what I'm trying to struggle with
when does it become a due process violation?
At what percentage?
How we supposed to measure that?
-: Here's what I know.
Pre-judgment interest baked
into this judgment was about $6.8 million.
Had it been at the rate that the Commonwealth pays,
it would've been 48,000.
48,000.
Not 480, not, you know, four million.
It would've been 48,000.
What I know is that the mismatch
between what everyone else is paying in interest
and what tort defendants
in the Commonwealth- -: So we tell the legislature,
"This is unconstitutional.
It violates due process. There's no rational basis.
Fix it. And we're not gonna tell you the number."
-: Oh, precisely.
I mean, I wanna be clear about the relief
that we're asking for.
We are not asking for this court to substitute its judgment
and to become legislatures.
What we are saying is the court has the power
to declare the portion of the interest rate statute
that sets that rate at 12% to be unconstitutional.
Vacate that portion of the judgment, send it back.
We can do it the way it was done before 1974.
We can have a hearing- -: You gotta remember,
these are being done in the Commonwealth every single day.
So we'll put this
into an emergency crisis for the legislature, right?
Mr. Chesin: Which I don't necessarily think
is a bad thing.
-: No, I'm not saying-
-: I mean, here's what I know.
We cited to Your Honors a case called Vigeant or Vigeant.
It's an ancient case, it's from 1927.
It was about telegraph poles.
The general court passed a law in 1851
that said anybody who's injured by a telegraph pole,
the telegraph company has strict liability
regardless of fault.
And that was a perfectly acceptable exercise
of the state's police power.
But by 1927, there were telephone poles
and there were electrical poles.
And if you got hurt by one of them,
you had to prove negligence.
And a telegraph company sued.
And they said this statute makes an irrational distinction
among otherwise similarly situated entities.
And the court, I would urge the court
to read Vigeant and the several cases
that cited it in different contexts
that we also cited in the brief.
And the court says, "When the general court chooses
to write a law that is rigid and inflexible
and does not account for changes in circumstances,
it runs the risk that over time that statute
will become so outdated as to violate the Constitution
and it struck down that statute.
This statute. -: What is Philip Morris's
own return on investment?
-: I didn't hear you. -: What does Philip Morris earn
on its return?
What's the interest rate?
-: I don't know, but I take Your Honor's point
that it is possible that this defendant
might make a good living
and might be able to put its money to good use.
But remember what the purpose of the interest statute is.
The purpose of the interest statute
is not to punish the defendant.
I mean, this court has said this half a dozen times
in the last 20 years.
It's to compensate
for the lost value of money. -: I understand the purpose of,
well, one of the purposes of the interest rate.
I'm just wondering why it's irrational in this context.
-: Because if the purpose is as Your Honor is implying,
which is to punish the defendant, to give the defendant-
-: Not to punish the defendant, but to
have the plaintiff the ability,
give the plaintiff the ability to earn as much
as the defendant might earn on the same dollar.
-: Well, I have a few responses to that.
The first is that, we don't know.
That may or may not be accurate
in terms of numbers for this defendant.
It certainly isn't, I would say for the vast,
there's a reason Your Honors
haven't gotten this issue before.
It's that there are very few entities
who are going to take this issue this far.
Because I would submit that for most tort defendants,
the prospect of crushing interest
and crushing being a lot less
than what the interest would be in this case,
provides a strong incentive to settle cases or to,
you know, not appeal cases
that would otherwise not be settled
and would otherwise be appealed.
-: But does that provide somewhat of a rational basis for it?
Meaning that your take,
if you got a good appeal and you're sure you're gonna win,
you know, go for it.
But if you got a loser,
we want you to get it over and done with.
-: I would direct Your Honor to the discussion
of a similar topic, and I think it was the McEvoy case.
It's one of the cases, not on this topic,
but tangentially on interest,
it was the case where the court said prejudgment interest
doesn't apply to punitive damages under 93A.
And the court dealt with this and said, just because it may,
you know, 93A with the prospect of punitive damages,
already incentivizes defendants to take a good hard look
at their case before moving forward.
But to add interest on top of that
penalizes the defendant in a way that doesn't add to the-
-: Remember a lot of cases don't have 93A claims in,
I mean nowadays they mostly do, but-
-: I understand, but my point is
if that is the purpose of the statute
to move things along quickly in the judicial system,
I think it is irrational to do it by placing the onus solely
on the defendant, not on the plaintiff,
not on the court system.
This case was filed in 2015,
tried in 2019, at least a year of that delay,
it was legitimate, but we were supposed
to try this case in 2018, but Mrs. Greene got sick
and wasn't able to participate in the trial.
And there was another year that,
we got a jury verdict in 2019.
-: There's kind of an irony that she couldn't participate
'cause she was sick.
-: Oh, look, please don't misunderstand me.
I am not saying that there's anything
that the plaintiff has done
to unduly prolong the proceedings.
My only point is there are things
that are outside the defendant's control.
It took two years from verdict to judgment because of COVID
because we were figuring out how to litigate 93A over Zoom.
And so if the purpose is encourage defendants
to speed things, encourage things to be sped up,
I would submit that it not a rational
or fair way to do it to put the onus on the defendant.
So anyway, I see that I've now gone double.
-: [Justice Wendlandt] Any way to stop the interest?
-: I'm not aware of one.
-: Could you put the money in escrow for example?
I just don't know.
-: I don't know the answer. I don't believe-
-: [Justice Wendlandt] Is there any self help
that the defendant's can engage in?
-: Isn't there like an offer of judgment
that you can make to stop the interest from accruing?
There's something the defense can do.
-: I will confess ignorance on this point.
I believe the answer is no.
We could pay and settle and stand down on an appeal.
-: [Justice Wendlandt] Not short of that?
-: I'm not familiar with the mechanism that-
-: [Justice Wendlandt} Something you might
wanna get familiar with.
-: I say, it is something we might wanna look into
because I mean, and that's the point,
the amount of interest.
I'm talking if we paid it tomorrow,
not if we waited 130 days and then a mandate
and then, my god, assert petition.
You know, if we paid it today,
the amount of interest would be the same
as what Judge Kazanjian found
was the maximum punitive damages available
under 93A for this conduct.
-: [Chief Justice Budd] Okay, I'm gonna-
-: Yeah, it's time for me to stop.
-: Thank you Chief. Thank you so much.
Okay. Attorney Bogdanow now.
-: May please the court, Your Honors,
my name is Michael Bogdanow.
With me is Andrew Rainer of Public Health Advocacy Institute
and along with other co-counsel we-
-: Counsels, do you know the answer to my question?
Is there anything that the defendant could do
in this situation to stop the interest from accruing?
-: My memory is that the procedure you're referring to
is Civil Procedure Rule 68 Offer of Judgment.
But again, I didn't come too prepared on that issue.
But that's my memory
is that the Civil Procedure Rule 68 covers that.
As you know, we represent Patricia Greene and the estate
of her deceased husband Frederick Douglas Greene.
And I'd like to start, if I may,
just a couple minutes on my brother's sufficiency
of evidence argument before we move into duel
and prejudgment interest 'cause it's very important.
We contend there was plenty of evidence
to support both the 93A findings as well
as the judge's denial of the JNOV motion.
Our client at the age of 13 was the target audience
for the massive advertising.
She fell for it, she became an addict early on.
She then switched to Lights at a relatively early age
and she switched to Lights, in her own words,
"Because they were a healthier alternative.
Low tar meant less of the bad stuff."
Most importantly, she found what she was looking for.
And that is exactly the message that Philip Morris gave.
Philip Morris knew that smokers were switching
because, this is Philip Morris' words,
"They thought they were engaging in good health behaviors.
It was an alternative to quitting." So she fell for that.
She believed that they were healthier
and she was deeply addicted to nicotine.
So yes, she kept trying to quit,
but she failed to quit.
And this court and Evan said that nicotine addiction
has to be part of the jurisprudence of these tobacco cases.
She wanted to quit, yes,
but she couldn't quit 'cause she was addicted
and she kept buying Marlboro Lights
'cause she thought they were healthier.
That's a fact. And that was in evidence.
And the fact is that it's the Marlboro Lights
that eventually she succumbed to
when she contracted lung cancer.
And so they sold a product,
they misled the world about it, and she fell for it.
The evidence supported the jury's verdict
and the evidence supported Judge Kazanjian's-
-: Well, the jury's verdict is more complicated. Right?
You lose on negligence. You lose on warranty.
You win on
this esoteric conspiracy theory,
which is inconsistent, by the way,
with everything you just said,
which was Philip Morris did this,
Philip Morris did that.
Philip Morris. and it is Philip Morris,
I mean, I don't find this really
that complicated on causation.
Philip Morris made the cigarettes, did the marketing,
you know, built, you know,
did this, you know,
didn't tell everybody that they're actually,
the FTC is wrong, that you just smoke more,
you breathe more deeply.
So Philip Morris is definitely the cause of all this.
But then you went on this conspiracy theory
about other people,
which she's probably completely unaware of,
and that's to me why the,
if there's not waiver on the first part,
I can't figure out exactly why there isn't
a little bit of a problem here on the first one.
I'm not troubled by the 93A,
but finding that the conspiracy is the cause
of her injury and cancer
and all the problems
when actually it's Philip Morris
and all the things that Philip Morris did by itself
that seems to be the central focus.
And there's no but-for causation instruction
on the conspiracy part of this, which again,
it's like this esoteric side claim
that involves everybody else
when Philip Morris is really the bad guy here.
-: It's very explainable, Your Honor.
And I think the jury's decision,
which was that Philip Morris negligently marketed to minors,
but that there was not causation on that claim.
They found the negligent, but they did not find causation.
But they did find that the power of the conspiracy
was really what caused the harm.
It's perfectly explainable that in this-
-: Explain that to me.
When Philip Morris builds the cigarettes,
the testimony is she's swept in by the marketing
about Marlboro Country and that she's not aware,
she hasn't read any of these reports, right,
from the Tobacco Institute, whatever they're called.
You know, it may all be waived
and that may be a straightforward way for you to win,
but I don't understand.
Don't we have to find that but?
That this conspiracy itself caused this injury?
And that's a complicated analysis.
-: It's complicated,
but the industry was part of this Lights low-tar fraud.
It wasn't just Philip Morris, and the jury understood that.
Let me just give you a few of the references for that.
The low-tar fraud really was a way
to alleviate consumers' concerns about health.
It actually began evolving at the same time
the conspiracy began evolving.
That testimony. -: But again, but again,
separated out from the fact that Philip Morris
is trumpeting its low-tar cigarettes,
Philip Morris is doing this,
and Philip Morris is creating the cigarettes,
and Philip Morris knows that people tugging on those
are tugging more than the FTC thinks.
How is that, don't we have to separate that out
(tone chiming) from this conspiracy issue?
-: I think, and again, we'll get into this
on the duel side of this as well,
but I believe you're still on the factual evidence
to support it and as to the evidence to support it.
-: No, no, I'm not, no, actually I'm totally not on the,
I believe that this whole Philip Morris
is involved in this enormous deceit,
this Philip Morris is part of this deceitful conspiracy too.
I get that,
but I don't understand,
doesn't the jury have to make some kind of,
that this added something to it.
-: And the jury- -: Especially when
I've got verdicts in favor of Philip Morris
on warranty and negligence,
which makes it sort of strange.
-: And that's exactly it.
The jury understood this was the conspiracy.
This was just like what Judge Kessler in Washington DC
in the landmark case of US v. Philip Morris,
then affirmed by the DC Circuit.
What she found as well, the low tar fraud
was an industry-wide sensation.
By 1981, every one of the conspirators was on it.
They were all portraying these low-tar cigarettes
as safer for you, and that's because they needed
to convince the public.
And it worked with the public and with Patty
that these cigarettes were better,
they were healthier and it was giving them,
and again, in their own words,
"it was reassuring them that you could smoke
without the health risks."
It was serving the quote unquote, "most important purpose
of the conspiracy to free smokers
from the guilt they felt when they smoked."
So what the jury saw was that this was the entire industry
that got onto this.
Eventually it became illegal
to use the word lights with cigarettes.
The whole industry was on this,
and that's why it is part of the conspiracy
and the jury felt it was that power
of the conspiracy that caused the harm,
and probably felt that if Philip Morris had told the truth
and broken out of this conspiracy and said, "You know what?
These low tar cigarettes aren't any safer for you
than conventional ones,"
which they knew, and behind the scenes they said,
"That would've solved it."
So there was plenty of evidence on that.
I'm not, yes?
-: I'm sorry, can we just talk about
whether there was a waiver or not
on the conspiracy, on the causation standard?
-: Yes, Your Honor. -: Because
what Philip Morris is saying is if you just look
at the transcript and the discussions,
it's palpable,
it's obvious that Philip Morris is talking about but-for
as it relates to the entire case
and all the causes of action.
On the other hand,
they do not, in the context of conspiracy,
request but-for and conspiracy by its nature,
whatever you think
of but-for substantial contributing factor,
conspiracy,
unlike the negligence cause of actions for instance,
involves more than one entity.
And so maybe it should have been but-for,
but it required a separate analysis.
-: Philip Morris actually in its brief said,
"Well, we argued but-for as to warranty,
and then we told the court that we wanted it to apply
to all the other claims."
That was in its brief, but I noticed there was no reference.
So I spent hours looking for that reference,
looking for the moment when they say,
"We want but-for which we put in the instructions
for negligence and warranty.
We want to apply to all the claims."
I spent hours to see this unreferenced.
But they didn't. -: Let's say you
didn't miss it. -: They didn't.
-: Let's say that you didn't miss it. It's not there.
Is there something about the entire argument
that says that this point, you know,
you can't now make an argument on conspiracy.
It's just, it's futile. It's just not gonna work.
-: The reason that's not this case, Your Honor,
is that they put in conspiracy instructions,
which were accurate.
There were accurate
under the Restatement Second Section 876,
which is the conspiracy section
that was not revised in Restatement Third.
It was they put in what they wanted.
They put in instruction requests which were for conspiracy,
that the conspirators had to have performed acts
which caused Mrs. Greene's cancer
that the cancer had to have resulted
from the power exercised by the conspiracy.
And they got the exact instructions they asked for.
This is way beyond even just a simple waiver.
They asked for instructions on conspiracy.
They did not ask for a but-for
and they got the instructions
they asked for. -: How does substantial
contributing factor get into the conspiracy instruction?
-: So Judge Kazanjian gave the precise instructions
that my brother requested, verbatim, on causation.
She didn't give but-for, my brother didn't ask for but-for.
And then she gave
the substantial contributing cause instruction
and she defined it very narrowly and very carefully.
She said, "To be a substantial contributing factor
in causing Ms. Greene's cancer,
Ms. Greene had to have," I am quoting the instruction,
"reasonably relied on a false statement
and was injured as a result."
She couldn't have been more explicit with this jury
that they had to find causation.
They even had to do more.
They had to find it was a cause
and they had to find it was substantial.
-: So essentially, although you guys went back and forth,
these two gentlemen went back and forth
on whether you would add but-for
to substantial contributing factor,
you talked about that in the instruction,
she actually sort of did that.
Is that what you're saying?
That she put in a, without using the word but-for,
she put in the,
she made it clear that that was essentially
a but-for addition to it.
-: She gave the exact instructions
that this court actually would've wanted
based on the principles of duel.
That you have to prove that the conduct was a cause.
She told the jury that, and the jury got it.
And that goes back to your question, Your Honor,
the jury didn't feel that that individual,
outside the conspiracy, individual conduct
of Philip Morris was enough to have done this.
It took this entire industry lying
to get to the causation.
And again, in conspiracy, as I've said,
the but-for instruction generally does not apply.
And that's even true under the ALI's restatements.
There was nothing under the Restatement Third.
-: How does the Restatement Third,
the Restatement Third doesn't have,
they don't do what Judge Kazanjian did,
which is put in the substantial,
'cause they moved away from that language.
But the other instruction she gave
was sort what do they do,
how do they deal with the sort of additional language
in the Restatement Third?
-: There are two ways I would address that.
First of all, they don't touch conspiracy law,
they just don't touch it.
It's in Restatement Section 876,
Restatement Second, Your Honor, Section 876.
It's there.
The comments to that make it clear
it's substantial cause, not but-for,
and so- -: That I'm not sure is right.
-: She addressed it under
also even under the Third Restatement Section 27.
-: Restatement Third.
Again, I'm gonna go back and read it,
but Restatement Third, when in the conspiracy discussion
cross references, has a reference
to the substantial contributing factor
as still being appropriate even though the Restatement Third
wipes out substantial contributing factor,
it still maintains it on the conspiracy count expressly?
Or are you just reading that into it?
-: My reading of Sections 26 and 27 of the Third Restatement,
are it just doesn't touch conspiracy law.
It doesn't mention it, it doesn't address it.
-: So it doesn't weave back in.
It doesn't, but again, Restatement Third
spends enormous amounts of time
wiping out the substantial contributing factor stuff.
It doesn't sort of opine that it's still okay
to do substantial contributing factor
in conspiracy, or it just doesn't discuss it at all?
-: Your Honor, especially when you move into Section 27
of the Restatement Third, it makes it clear that,
and I think conspiracy falls within this,
although it doesn't touch conspiracy
that was already addressed in the second and not revised.
It makes it clear that when there are these multiple causes,
which is almost inherent in a conspiracy
that you have multiple actors and multiple forces,
then you have to instruct that the conduct
of the defendant has to have been a cause.
It couldn't be clearer,
which is exactly what Judge Kazanjian instructed
and some of the notes as well
as the toxic tort conspiracy cases
and notes make it clear that these multiple cause,
we won't even say multiple factor, multiple causes,
you can't immunize a defendant
just because it's also possible that addiction
or that peer pressure-
-: You can have multiple but-for causes,
that's not a problem.
-: You can have multiple but-for causes
and then what the jury needs to know
is that this defendant's conduct was a cause of harm
and it couldn't have been clearer.
from the instructions- -: So to be helpful to,
'cause we're not only to deciding your case,
but if we made clear
that the language Judge Kazanjian uses,
not the substantial contributing factor language,
but the language she uses about causation
is the appropriate additional language
in a conspiracy case.
That makes sense to you.
That's the proper interpretation.
She should give the standard instruction
plus that line without getting
into substantial contributing factor.
-: Her instructions in this case were perfect, Your Honor.
And if that's your question.
-: Well, no, that's not my question.
-: And if you're saying- -: My question is-
-: What if you wiped out substantial factor?
I don't think the substantial contributing factor language
is helpful, but we also need
a clear standard going forward.
If that language is removed,
it avoids this fight and confusion,
but it will also make clear that this is,
you have to prove it's a cause in addition
to giving the standard conspiracy language.
Is that sentence adequate to solve the causation issue?
-: I do follow you, Your Honor.
Let's put substantial factor on the side
and focus just on the instructions she gave.
They were perfect.
She told the jury they had to find
that the conduct of Philip Morris
as a conspirator caused the harm.
They were perfect.
They were exactly precisely verbatim
what my brother requested.
Of course, he didn't object to them.
He asked for them and he got them.
-: Wait, so you're saying your opposing counsel
asked for the following: "in pursuing such a conspiracy,
Philip Morris and the other tobacco companies performed acts
which injured Mrs. Greene,
namely such acts were a substantial contributing factor
in causing her cancer."
You're saying that if I look back at what they requested,
they requested that?
-: I'm saying that her causation instruction,
I was asked to put substantial factor aside.
I'm gonna tell you what Philip Morris asked for.
Philip Morris said as to the concerted action theory,
causation is proven if conspirators performed acts
which caused Mrs. Greene's lung cancer.
As to power of coercion,
causation is proven if her lung cancer resulted from-
-: Yeah, so that's the second theory of conspiracy.
I'm going to the first theory of conspiracy
where she actually says substantial contributing factor
in causing the cancer.
-: So I was trying to answer the question
that let's say we move that aside.
Now if we want to bring that back,
no, my brother, well my brother actually did,
if you look at the colloquy
that he wants you to read carefully,
he actually did want substantial contributing factor.
He wanted but-for and substantial
contributing factor. -: Which is what she gave.
-: Which is essentially what she gave.
So yes, but she also narrowly defined substantial factor
as reasonable reliance on a false statement
and injury as a result.
-: But now you're mixing up the two theories of conspiracy,
which I think is wrong.
-: Well, I'm bringing the substantial factor
'cause that's where she said it.
Well, that's where she says to the one of the two theories.
You're right, Your Honor.
But she narrowly defined-
-: So if I find, if I look at the record
and let's just say I don't think there's waiver
and the second theory of conspiracy
was accurately instructed as but-for,
but the first theory was not, what do I do?
-: Well, first of all- -: I have to send it back?
-: Well first of all,
the jury found liability on both theories.
And second of all, I just don't see,
and I guess this gets back to the previous question,
I just don't see how her telling the jury
that they have to find causation on both of the two theories
and then explaining substantial factor
could possibly be grounds for sending it back, Your Honor.
There was no confusion and the proof is in the pudding.
The jury was nuanced in its causation findings.
If the concern is jury confusion,
we know they weren't confused about causation
because they thought it through
and that's why there was individual negligence
on Philip Morris's part, but no causation.
This was a jury that was thinking carefully
about causation and I don't think there's any showing here
that there was jury confusion.
And my counsel that's- -: Can I ask?
I'm now a little confused
and maybe Justice Wendlandt's ahead of me, though.
So there are two different conspiracy theories.
Is the substantial contributing factor given
in both instructions?
It's given in both.
Mr. Bogdanow: My memory is that she included
in both, I believe.
-: But she also includes a causation instruction in both?
And separate from the substantial contributing factor thing?
Mr. Bogdanow: Correct.
-: So even in duel,
we say that the problem
with the substantial contributing factor is when it's given
without the but-for instruction.
Here though, it sounds like we've got
a causation instruction
in both of these.
So even it may be consistent with,
I know you want duel limited, they want it expanded,
but it sounds like it may be that the causation instruction
she gave in both conspiracy theories
removes the danger that we identified in duel
because it puts in a causation requirement
so that the jury can't just skip the causation requirement.
-: That is our position, Your Honor. Precisely.
I think, unless any further question on that,
I should spend at least a few minutes on-
-: Yeah. Could you talk about- -: Interest?
-: So the interest,
I mean if we're Argentina, 12% makes a lot of sense,
but we're not Argentina
and there's a big
differential here and we can't punish appeals, right?
We don't wanna punish 'cause we're gonna punish meritorious
as well as unmeritorious appeals.
How is a 12% interest in a low-interest environment,
we've a low-inflation environment which is what we are now.
So although we're in a,
times have changed, but a year or two ago,
12% was crazy compared to what,
you know, the interest rates were.
So what do we do here?
Why is it a rational basis for this,
'cause it's a really sloppy baggy statute but-
-: The rational purpose is it compensates for loss of use.
And I'll get into what that means exactly.
It avoids market fluctuations,
which is a rational purpose,
and it promotes administrative ease in calculation.
Now why is it a fair,
or it doesn't even have to be fair,
it just can't be irrational.
Why is it a rational statute on the interest?
Well, the prime rate, which my brother raised in his brief,
it's not the only indicator
of what would've happened with that money.
For example, that money could have been invested
in the long-term Standard & Poor
and it would've been about the same,
as explained in our brief,
it would've been about the same as 12%.
It would've been about 11.5%.
Even better if it was invested in Philip Morris
on the Standard & Poor, than it would've been skyrocketing.
She could have invested it in real estate.
There are a number of things
that could have happened with that money.
The 12% is substantially lower
than what plaintiffs have to spend
to get by during litigation.
Much lower.
They can spend anywhere easily up to 30% interest rates
to borrow to get by.
And it's much lower than an investment rate of 12%.
Why? 'Cause it's simple interest.
It's simple interest, 1% per month, period.
And so it is so much lower than when you invest at 12%
and you get the compounding.
It's not an outlier.
They're at least a half a dozen states
that have interest rates, some above, up to 15%,
some slightly below, 10%.
-: So let me just do that for you for a second.
-: Sure, Your Honor. -: What if it were 1%
rather than 12%?
Would you be arguing the same thing.
-: If 1%? -: Yeah, I mean,
instead of doing a- -: If the interest rate was 1%,
unfortunately for my clients,
then it would be hard for me to argue
that that was irrational.
This is a legislative decision.
In fact, until this hearing,
I have never heard of any court ever telling a legislature,
"Your interest rate is unconstitutional."
For the first time today I heard
that there was a trial judge in Illinois
who made that as similar decision.
I know nothing about that case,
but I can tell you I am aware of no published decision,
no appellate court ever saying to a legislature,
"We don't like your interest rate. Change it."
And if there were one, I know my esteemed brother-
-: But again, just to push you a little bit.
Mr. Bogdanow: Yes, Your Honor.
-: So any interest rate the legislature sets is okay,
either a really low one or a really high one
because of these, and I thought your factors are good.
It's simple to calculate.
It doesn't fluctuate with the times.
So again, 30% works, 1% works,
0.0001% works, anything works?
-: I've given a lot of thought to that question, Your Honor.
Let's say that the legislature imposed a 200% interest rate.
I'd be in a tough position to stand here
and call that rational.
And this court would be in a tough position
to figure out what to do about it
and what this court has done in situations
where something is that completely outrageous
would probably be to say to the legislature,
"This sounds out of bounds
and at some point you gotta fix it,"
'cause courts don't jump in.
This court should not jump in and decide what's, you know,
what to do about the interest rate.
But that's not this case, 'cause 12%,
it's totally within the bounds
of a rational and reasonable interest rate.
It's similar to Hawaii, New Mexico, Rhode Island,
Connecticut, Vermont.
We can't all of a sudden now tell all of these states
that your interest rates are wrong
and Massachusetts is wrong.
It's just not an irrational statute.
Could there ever be a point? Minus 10%.
Sure, Your Honor, but that's not this case.
I'll just close it out with quoting this court,
"The legislature's decision to maintain the 12% rate
in tort judgements against private parties,
despite fluctuating conditions
is undoubtedly its prerogative."
That was in the Secretary of Administration case
that we've both cited.