Smokescreen - The Stories That Never See The Courtroom by Miki Beckstrom

 

In 1998, the Attorney Generals of 46 states, as well as five United States territories, signed an agreement with the leading manufacturers of tobacco and cigarettes. This settlement, known as the Master Settlement Agreement (MSA), became a monumental settlement that changed the capacity of tobacco companies' operations forever.

The main interest in the MSA was to reduce smoking in the U.S. with a specific interest in reducing smoking in teens and youth. And the MSA was successful. Cigarette smoking in teens decreased from 36.4% in 1997 to 8.8% in 2017. 

The success of the agreement is widely attributed to the provisions of the settlement itself. So what did the agreement even consist of? The first condition required the companies to pay billions to remedy the costs associated with smoking related illnesses. Phillip Morris USA, one of the tobacco companies involved, was required to pay a lump sum of $10 billion, and an established structured settlement that requires them to pay $200 billion over the course of 25 years. Additionally, beyond the 25 years, they will continue to make payments annually. The associated costs with the settlements have required cigarette manufacturers to increase prices of cigarettes. This fact alone has limited accessibility to cigarettes for teenagers.

Another provision of the agreement was adding restrictions to the marketing of tobacco products. These include:

• prohibiting the advertisement of tobacco products to target teens
• banning the use of cartoons in advertisement 
• banning paid promotional agreements in entertainment and media
• prohibiting tobacco brands from sponsoring youth events

The agreement also eliminated company practices that obscured potential health risks of products, established the Truth Initiative program, and required the release of internal documents. Additionally, each of the signing states made a covenant not to sue, and will not be able to bring any future legal claims based on the actions of the companies at issue in this case. All of the aforementioned provisions of this monumental settlement have influenced tobacco usage, and have had altering affects on our society today.

Question:

I was personally shocked at the payout. What were your initial reactions to that number? Does it seem proportional to you?

Hypothetical 1:

A major benefit to settlements is being able to avoid a long and expensive litigation process. Had this case gone to trial, how would you imagine the reward differing from the conditions of the settlement? Would the court have ruled in the favor of the states?

Hypothetical 2 (for fun):

With the rise of electronic cigarettes and nicotine pouches, nicotine usage in teens has begun to climb again. If you were involved with settlement negotiations for a similar agreement, what provisions would you consider requiring?

Footnotes

1. https://www.naag.org/our-work/naag-center-for-tobacco-and-public-health/the-master-settlement-agreement/#:~:text=In%201998%2C%2052%20state%20and,with%20treating%20smoking%2Drelated%20illnesses.
2. https://truthinitiative.org/who-we-are/our-history/master-settlement-agreement
3. https://www.philipmorrisusa.com/products/tobacco-settlement-agreements
4. https://www.naag.org/attorney-general-journal/tobacco-master-settlement-agreement-msa-20-years-later/
5. https://edge.sitecorecloud.io/altriaclien9c5f-altriaclien2f33-prod0b41-3d12/media/Project/Altria/PMUSA/Products/Tobacco-Settlement-Agreements/master-settlement-agreement.pdf?sc_lang=en

Evelin Lagos’ Blog Post: Unpacking the Trial & Appeals Process: Liebeck v. McDonald's

 

In 1992, 79-year-old Stella Liebeck ordered coffee at a McDonald’s drive-thru and, while parked, she placed the cup between her legs to remove the lid and add cream. The coffee spilled, causing severe third-degree burns across sixteen percent of her body that required hospitalization and skin grafts. When McDonald’s refused to cover her medical bills, she filed a lawsuit seeking damages.

The Trial Phase
During the trial, the court seated a jury selected from a jury venire after conducting voir dire. Liebeck served as a fact witness, testifying about the incident, while an expert witness in thermodynamics testified that McDonald's kept its coffee at dangerously high temperatures (180–190°F) compared to other restaurants. Defense counsel subjected the expert to cross-examination.

Following the judge's jury instructions on the civil standard of proof (requiring a preponderance of the evidence rather than the criminal "beyond a reasonable doubt" standard), the jury reached a verdict. They found McDonald’s liable and awarded $200,000 in compensatory damages (reduced due to her minor fault) and $2.7 million in punitive damages. Because the punitive award was excessive, the trial judge entered a judgment modifying it downward via remittitur. (Had an award been incorrectly low, the judge could have used an additur).

The Appellate Phase
Following the judge’s remittitur, both sides prepared to appeal. In civil procedure, a dissatisfied party acts as the appellant by filing a notice of appeal, while the opposing party acts as the respondent. McDonald’s sought to overturn the liability verdict, while Liebeck planned to cross-appeal to restore her full punitive award.

As an appeal as a matter of right, appellate judges would have reviewed the trial record for legal errors under standards like abuse of discretion, with the power to affirm the verdict or reverse and remand it back to the trial court. Any higher appeal would have required a discretionary writ of certiorari. However, before the appellate court heard the case, both parties reached a confidential out-of-court settlement to avoid prolonged litigation.

1. Discussion Question: The jury awarded Liebeck millions of dollars in punitive damages, but then the judge reduced this amount using remittitur in Liebeck. In your view, why do judges have post-trial tools like remittitur and additur? Where should courts draw the line between respecting a jury's verdict and correcting an "excessive" award?
2. Hypothetical Scenario: Suppose that during trial, the judge erroneously excluded McDonald’s key safety evidence. McDonald's appeals as a matter of right. If the appellate court determines the trial judge committed an abuse of discretion, what action will the appellate court take regarding the judgment (reverse), and where does the case go next (remand)? 

Sources:

https://www.law.cornell.edu/wex/Liebeck_v_McDonalds_Restaurants_1994

https://www.findlaw.com/injury/product-liability/the-mcdonald-s-coffee-cup-case-separating-mcfacts-from-mcfiction.html

https://www.tortmuseum.org/liebeck-v-mcdonalds/

Discovery Disaster: PDV USA, Inc. v. Interamerican Consulting Inc. By Kendra Hurst

 

Introduction

In May of 2020, PDV USA, Inc. v. Interamerican Consulting Inc., PDV brought a breach of contract complaint against Interamerican in the United States District Court, S.D. New York. for a failure to provide contracted services to their satisfaction. This case addresses the obligation to turn over evidence during discovery and the preservation of evidence.

Facts

After contracting Interamerican to provide explicit consulting services, PDV made initial payments of $15 million to Interamerican as agreed, before any contracted services were provided. After the receipt of initial reports PDV claimed Interamerican's failure to provide services, and did not pay the remaining $35 million due on July 15th, 2017 as required by the contract. They made known to Interamerican that the amount would be paid only if the agreed upon services were fulfilled.

In December of 2017 Interamerican sought legal advice in anticipation of litigation, which the court upholds as the point at which Interamerican should have reasonably inferred that they were under an obligation to preserve evidence. However, documentation obtained from Interamerican showed that they failed to implement a litigation hold until late 2018. 

During discovery, Interamerican failed to provide messages in the form of emails, WhatsApp messages, and other mobile messages to PDV, and PDV was only made aware of a large portion of existing communication when the documents were produced by the government and other third parties. At this point, PDV sought sanctions against Interamerican for their failure to preserve clearly relevant evidence.

The court found that Interamerican engaged in selective deletion of messages, encryption of messages that where known to be relevant to the case, that Interamerican gave shifting explanations as to why some messages where produced while others where not, gave contradictory testimony, and engaged in obfuscation and obstruction wherein Interamerican downplayed the significance of the missing documentation.

Ruling 

In January of 2026, the court ruled that Interamerican failed in their duty to preserve, spoliated relevant evidence, that PDV USA had been prejudiced, and that Interamerican acted in bad faith. The court found a failure to preserve evidence and awarded partial sanctions of an adverse inference instruction and attorney's fees in favor of PDV USA.

Response

Question: At what point does the obligation to preserve evidence arise?

Hypothetical: Suppose Interamerican had not sought legal advice in 2017 - would this have changed the courts finding of a failure of a duty to preserve?

Citations

(Note: you may need to already be logged in to Westlaw for the case link to take you directly to the case in question.) 

PDV USA, Inc. v. Interamerican Consulting Inc., No. 20-CV-3699 (JGK) (RWL), 2026 WL 203036 (S.D.N.Y. Jan. 27, 2026) https://www.westlaw.com/Document/I310e18c0fbc211f093a3f9604e31fef9/View/FullText.html?transitionType=Default&contextData=(sc.Default)&VR=3.0&RS=cblt1.0

Caitlin Oyler, ESI Spoliation Sanctions & Discovery Misconduct: Court Finds Intent to Deprive and Imposes Adverse Inference in PDV USA v. Interamerican, CODISCOVR (Feb. 12, 2026), https://codiscovr.com/esi-spoliation-sanctions-discovery-misconduct-court-finds-intent-to-deprive-and-imposes-adverse-inference-in-pdv-usa-v-interamerican/.

PDV USA, Inc. v. Interamerican Consulting Inc., No. 20-CV-3699 (JGK) (RWL), 2026 WL (S.D.N.Y. Jan. 27, 2026) (Lehrburger, M.J.), https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1:2020cv03699/537042/297/.

Rule 37 Failure to Make Disclosures or to Cooperate in Discovery; Sanctions 

Rule 34 Producing Documents, Electronically Stored Information, and Tangible Things, or Entering onto Land, for Inspection and Other Purposes 

 

Anatomy of a Civil Case: The Digital Evidence Problem By Meghan Corales

 

When most people think about discovery in a civil case, they probably imagine attorneys exchanging documents, taking depositions, and answering interrogatories. Today, however, an enormous amount of potentially relevant evidence exists electronically. Emails, text messages, social-media posts, photographs, cloud files, search histories, and even metadata can become important evidence. This creates a significant question during pretrial proceedings: When does a party have a duty to preserve electronically stored information?

Under Federal Rule of Civil Procedure 26, parties must discuss discovery and preservation issues early in the litigation. The rule specifically recognizes the importance of addressing the preservation and production of electronically stored information when developing a discovery plan. This can be complicated because electronic information is constantly being created, modified, automatically deleted, or overwritten.

The duty to preserve becomes especially important when litigation is pending or reasonably anticipated. Rule 37(e) provides that if electronically stored information that should have been preserved is lost because a party failed to take reasonable steps to preserve it, courts may impose measures to address the resulting prejudice. More serious sanctions, such as an adverse inference or dismissal, require a finding that the party intended to deprive the opposing party of the information.

This raises an interesting issue: How much information should a person or business realistically be expected to preserve? It would be unreasonable to require someone to permanently save every email, text, photograph, or computer file simply because a lawsuit might someday occur. The federal rules recognize this by focusing on taking “reasonable steps” rather than demanding perfection.

At the same time, allowing relevant evidence to disappear can undermine the fairness of the litigation process. For example, deleting potentially relevant text messages after learning that a lawsuit is likely could create serious problems, even if the deletion occurs through an ordinary phone setting.

Ultimately, electronically stored information demonstrates how technology has changed the discovery stage of civil litigation. Attorneys must think about preservation early, understand where their clients' information is stored, and make reasonable decisions about what needs to be protected. As digital evidence becomes even more central to civil cases, courts will continue to face the difficult balance between preserving evidence and preventing discovery from becoming unnecessarily expensive and burdensome.

Question: Where should courts draw the line between a reasonable duty to preserve electronic evidence and an unreasonable expectation that parties save everything?

Sources:

• Federal Rule of Civil Procedure 26
• Federal Rule of Civil Procedure 37
• U.S. Courts — Federal Rules of Civil Procedure

Tashina Barber - Factual Findings on Appeal: A Copyright Case

Cartoon by Mike Twohy/ CartoonStock. Used with permission.

I recall coming across Sedlik v. Von Drachenberg during one of my social media scrolling sessions. The case caught my attention because it involved Kat Von D, a well-known tattoo artist, and a photograph of jazz musician Miles Davis. Photographer Jeffrey Sedlik sued Katherine Von Drachenberg, aka Kat Von D, after she used his copyrighted photo of Miles Davis as a reference for a tattoo. The dispute provides an example of federal jurisdiction and the different roles of trial and appellate courts.

One of the first questions I had was why this case was filed in federal court rather than state court, and I quickly found my way to 28 U.S.C. § 1338. Federal district courts have original jurisdiction over copyright claims, while state courts do not have jurisdiction over copyright infringement claims.

At trial, the case ultimately went before a jury. The jury found that several of Kat Von D’s works, including the tattoo and sketch, were not substantially similar to Sedlik’s photograph. For other images that reproduced the photograph, the jury concluded that the use was fair use. For those interested in more background, the Center for Art Law article “Shhhhhh”: Kat Von D and Tattoo Fan Art – Sedlik v. Von Drachenberg (2021) provides a helpful overview of the photograph, tattoo, and arguments leading to the jury’s decision.

Sedlik appealed. This past January, the Ninth Circuit panel affirmed the district court’s judgment. What stood out to me was the panel’s treatment of the jury’s factual findings. Rather than deciding for itself whether the works were substantially similar, the panel gave deference to the jury as the factfinder. However, the Ninth Circuit later agreed to rehear the case en banc and vacated that panel opinion, meaning the appeal remains an ongoing case.

This case helped me understand that an appeal is not simply an opportunity to retry a case. The jury has an important role in deciding factual disputes, while appellate courts review those decisions under specific standards.

Question: Why do you think appellate courts are reluctant to overturn a jury’s factual findings?

Hypothetical: What if the trial judge, rather than the jury, had decided that the tattoo was not substantially similar to the photograph? Would that change how the appellate court reviewed the decision?

References

28 U.S.C. § 1338 (2018). https://www.law.cornell.edu/uscode/text/28/1338 

Center for Art Law. (2021). “Shhhhhh”: Kat Von D and tattoo fan art - Sedlik v. Von Drachenberg. https://itsartlaw.org/art-law/shhhhhh-kat-von-d-and-tattoo-fan-art/

Cornell Law School, Legal Information Institute. (n.d.) Fair use. https://www.law.cornell.edu/wex/fair_use 

Sedlik v. Von Drachenberg, No. 24-1869 (9th Cir. 2026). Google Scholar. https://scholar.google.com/scholar_case?case=13486228210150193593&q=Sedlik+v.+Von+Drachenberg&hl=en&as_sdt=6,45 

United States Courts. (n.d.) U.S. federal courts circuit map. https://www.uscourts.gov/file/document/us-federal-courts-circuit-map

When Facts Matter: Ford Motor v. Montana and What it Means for Personal Jurisdiction (an illustrative post by a student in a prior year)

 

 

In today’s polarized society, it seems like there isn’t much that we can all agree on. However, the recent Supreme Court term proved that there was at least one thing all justices could agree on—at least when it comes to one specific set of facts in one specific case. The decision comes from a products liability case in Montana, and at its core is the issue of personal jurisdiction.

We will be learning more about the issue of jurisdiction in the coming weeks, but let’s just start with this: Personal Jurisdiction is the court’s power over the parties in a lawsuit. It is also a due process issue—is it fundamentally fair that a defendant in a lawsuit in one state can be compelled to travel to another state to defend themselves? Personal jurisdiction comes in two forms: general and specific. To illustrate the difference, let’s use the above-mentioned Ford Motor Company v. Montana 8th District Court case as an example. Here is a link that gives a brief summary of the facts and issues in the case. You should review this link before proceeding further. At the core of the case is a claim over a faulty 1996 Ford Explorer. 

Let’s take a look at the key facts:

• Ford Motor Company’s principal place of business is Michigan.
• The injured party was a resident of Montana, where the injury also occurred.
• The car was not initially purchased in Montana, and plaintiff did not directly purchase the car from the Ford Motor Company.
• The car was not manufactured in Montana.
• Ford maintained a network of dealerships and service centers in Montana.
• Ford advertised and marketed the exact model that caused the injury in the state of Montana at the time it was manufactured.

Given the above facts, the question before the Court was whether it was fundamentally fair for Ford to be required to defend itself in Montana (specific personal jurisdiction), or should the suit take place in Michigan where Ford is based (general personal jurisdiction)? Ford based its argument that the Montana court did not have personal jurisdiction over it on a decision in a 2016 Supreme Court Case: Bristol Meyers Squibb v. California, in which a similar case was dismissed because of a lack of ties between the plaintiffs and the state where the suit took place (California). However, the court found this to be a fundamentally different set of facts {1}. In the Montana case, the court found that Ford did have sufficient ties to Montana to justify bringing a suit there—through its networks of dealerships and advertisements—including advertising the very make and model causing the injury. This, alone, is enough to apply the principal of specific personal jurisdiction in this case {2}.

As you can see—facts matter! Change one or more of the bulleted points above, and the case could have been decided differently. Taking into account this brief summary I wanted to pose two questions:

1. Of the above listed facts, which one would have the biggest impact on the outcome of the case if it were to change?
2. Do you agree with the expanded view of what constitutes specific personal jurisdiction? Why or Why Not?

Footnotes:

{1} https://www.jdsupra.com/legalnews/united-states-supreme-court-clarifies-1772847/

{2} https://law.emory.edu/news-and-events/releases/2021/04/scouts-analysis-ford-motor-company-v.-montana-eighth-judicial-district-court.html

WELCOME TO THE LAWSUITS & LITIGATION CLASS BLOG

    This blog is an integral component of our Lawsuits and Litigation MLS course. The purpose of the blog is to (1) promote out of class discussion on topics related to the course and (2) raise litigation questions or legal issues that are of interest to you so they may be discussed in class. You will be making posts and comments on the blog throughout the semester. See the course syllabus for details.

The blog is private and is not visible to search engines, although if someone learned the Blog URL they could access it.  Only blog authors (myself and you all) may make posts or comments.  The blog uses the Blogger platform, which is a Google product. Consequently, you must have a Gmail account in order to post on the blog.

We are going to have a great semester!

Cheers,

Randy