14-144-cv (L)
Mulholland v. Philip Morris USA, Inc.

                                UNITED STATES COURT OF APPEALS
                                    FOR THE SECOND CIRCUIT

                                    AMENDED SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.


        At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
25th day of March, two thousand fifteen.

Present:    ROSEMARY S. POOLER,
            DEBRA ANN LIVINGSTON,
            CHRISTOPHER F. DRONEY,
                        Circuit Judges.
_____________________________________________________

FLORENCE MULHOLLAND, on behalf of herself and as
adminstratrix of the estate of DAVID MULHOLLAND,

                                    Plaintiff-Appellee-Cross-Appellant,

                           v.                                    14-144-cv (L); 14-265-cv (XAP)

PHILIP MORRIS USA, INC.1,

                        Defendant-Appellant-Cross-Appellee.
__________________________________________

Appearing for Appellant-Cross Appellee:           Scott A. Chesin, Mayer Brown LLP, (Michael
                                                  Rayfield, Mayer Brown LLP; Thomas J. Quigley,
                                                  Winston & Strawn LLP, on the brief) New York,
                                                  N.Y.

Appearing for Appellee-Cross-Appellant:           Jerome H. Block, Levy -Konigsberg, LLP, (Amber
                                                  R. Long, on the brief), New York, N.Y.




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             The Clerk of the Court is directed to amend the caption as above.
Appeal from the United States District Court for the Southern District of New York (Seibel, J.)
and cross-appeal from the United States District Court for the Southern District of New York
(Brieant, J.).


     ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of said District Court be and it hereby is AFFIRMED.

         Philip Morris USA Inc. (“PM USA”) appeals from the August 15, 2013 judgment of the
United States District Court for the Southern District of New York (Seibel, J.), entered after a
jury trial, awarding Florence Mulholland (“Mulholland”) $4,932,269.52 on her claim for failure
to warn, and from the December 9, 2013 order of the district court denying PM USA’s motion
for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50. Florence
Mulholland cross-appeals from (1) the district court’s July 24, 2007 memorandum and order
(Brieant, J.) granting PM USA summary judgment on her claim for punitive damages and (2) the
district court’s denial of her motion to amend the judgment. We assume the parties’ familiarity
with the underlying facts, procedural history, and specification of issues for review.

        PM USA first argues that the district court committed reversible error by failing to
instruct the jury on but-for causation with respect to Mulholland’s claim for failure-to-warn. We
find no error. First, the instruction given by the district court is consistent with the suggested
instruction in the New York Pattern Jury Instructions. See Celle v. Filipino Reporter Enters. Inc.,
209 F.3d 163, 174 (2d Cir. 2000) (“These draft instructions—with extensive citations to cases,
statutes and secondary authorities—are kept up-to-date by a distinguished group of New York
Supreme Court Justices and law professors. They are relied upon in New York courts and in
federal courts in diversity actions.”). Second, PM USA failed to cite a single case where our
Court held that a district court’s failure to include a but-for instruction constituted reversible
error. Assuming arguendo that a but-for instruction could be legally necessary in a specific case,
PM USA has not demonstrated that a but-for instruction would have had any effect on this case.
PM USA contends such an instruction was required in this case because one of its “central
theories was that Mr. Mulholland would have smoked and contracted lung cancer regardless of
any warnings PM USA had giving him.” PM USA Br. at 31. But in finding that PM USA’s
failure to warn was a substantial factor in bring about Mr. Mulholland’s injury (as was required
by the district court’s jury instruction), the jury would necessarily have had to reject the theory
that Mr. Mulholland would have smoked even if he received adequate warning. For the failure to
warn to have had any effect, it cannot be that Mr. Mulholland would have smoked regardless of
any warnings. PM USA’s argument that a but-for instruction would have altered the verdict does
not withstand basic legal scrutiny.

        PM USA also argues that the district court abused its discretion by admitting into
evidence David Mulholland’s deposition testimony that if he had known when he began smoking
in the early 1960s that smoking could cause cancer, then he “wouldn’t have smoked” cigarettes.
The district court initially declined to admit this testimony on the ground that it was “pure
speculation” and not “helpful to the jury.” However, the district court reversed itself after our
decision in United States v. Cuti, 720 F.3d 453 (2d Cir. 2013), finding Cuti “moved the needle .
. . enough” to let the evidence in. PM USA argues that the testimony was speculative and self-


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serving. “Even if we do find that evidentiary rulings were manifestly erroneous, we will not
grant a new trial if we find that the improperly admitted evidence was harmless—i.e., that the
evidence was unimportant in relation to everything else the jury considered on the issue in
question.” Cameron v. City of New York, 598 F.3d 50, 61 (2d Cir. 2010) (internal alteration and
quotation marks omitted). Even assuming arguendo that the district court erred in admitting the
testimony, we do not think this ruling merits granting a new trial. PM USA introduced a great
deal of evidence at trial to support its theory that David Mulholland would have smoked even if
he had been adequately warned, including his testimony that he “never really looked” at the
cigarette warnings once they did start appearing on cigarette packages. But Mulholland
introduced a significant amount of other evidence that David Mulholland would have heeded an
adequate waning if one were given. For example, she introduced expert testimony showing that
many fewer teens take up smoking once exposed to health warnings, she emphasized that David
Mulholland made several attempts to quit smoking once he learned of the hazards of smoking.
She also introduced evidence that he wore protective safety equipment when doing career-related
painting and welding because he knew the health dangers of paint fumes, indicating that he did
avoid risks when he knew about them. On balance, we conclude that any error in admitting the
testimony was harmless.

        In her cross-appeal, Mulholland argues that the district court erred in granting PM USA
summary judgment on her punitive damages claim. The district court found that the Master
Settlement Agreement (“MSA”) entered into by New York State with the nation’s major tobacco
companies, including PM USA, barred private plaintiffs such as Mulholland from suing for
punitive damages. The district court concluded that because the New York Attorney General
brought the suit acting as parens patriae on behalf of the citizens of New York, Mulholland was
in privity with the New York Attorney General and punitive damages were barred. On appeal,
Mulholland argues she was not in privity with the Attorney General, such that res judicata does
not apply to her punitive damages claim.

        There is no error. Both New York Appellate Divisions to consider this issue have
concluded that punitive damages are public, not private, and private plaintiffs are barred from
seeking punitive damages for the same course of conduct against the same defendants as were
involved in the MSA. Fabiano v. Philip Morris Inc., 862 N.Y.S.2d 487,490 (1st Dep’t 2008)
(internal citation omitted); see also Shea v. Am. Tobacco Co., 901 N.Y.S.2d 303 (2d Dep’t 2010)
(“Based on the master settlement agreement and consent decree judgment, the Supreme Court
properly determined that the defendants were entitled to the dismissal of the plaintiffs’ claims for
punitive damages on the basis of the doctrine of res judicata.”); see also Grill v. Philip Morris
USA, Inc., 653 F. Supp. 2d 481, 498 (S.D.N.Y. 2009) (finding res judicata barred plaintiff’s
claim for punitive damages in action against cigarette manufacturer); Pahuta v.
Massey-Ferguson, Inc., 170 F.3d 125, 134 (2d Cir. 1999) (“We are bound, as was the district
court, to apply the law as interpreted by New York's intermediate appellate courts . . .).

        Nor do we find that the district court abused its discretion in denying Mulholland’s
motion to amend the judgment. “[D]istrict courts may alter or amend judgment to correct a clear
error of law or prevent manifest injustice.” Munafo v. Metro. Transp. Auth., 381 F.3d 99, 105 (2d
Cir. 2004) (internal citation omitted). In calculating the judgment at issue here, the district court
applied the same methodology that this Court set forth for molding verdicts into judgments in
wrongful death cases in Bauman v. Keene Corp. (In re Joint E. Dist. & S. Dist. Asbestos Litig.),

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18 F.3d 126, 128 (2d Cir. 1994). While Bauman discusses a method only for cases where
prejudgment interest applied to the “entire verdict[],” neither Bauman nor any other case clearly
mandates a specific method of calculating settlement set offs in cases involving wrongful death
and non-wrongful death damages, or clearly states that application of the Bauman method to
cases involving both types of damages would be unacceptable. See id. Further, Mulholland has
not demonstrated that the district court’s method for calculating interest resulted in a manifest
injustice. Finding no abuse of discretion, we affirm.

       We have considered the remainder of the arguments raised in both the appeal and the
cross-appeal and find them to be without merit. Accordingly, the judgment of the district court
hereby is AFFIRMED.

                                                    FOR THE COURT:
                                                    Catherine O’Hagan Wolfe, Clerk




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