Ore. High Court Reaffirms $79.5M Award in Philip Morris Case

February 4, 2008

The Oregon Supreme Court for a third time has allowed a $79.5 million punitive-damages judgment against Philip Morris, an award twice struck down by the U.S. Supreme Court, which suggested it was excessive.

The award was for the family of Jesse Williams, a former Portland janitor who started smoking during a 1950s Army hitch and died in 1997, six months after he was diagnosed with lung cancer. A jury in Portland made the award in 1999.

The Oregon Supreme Court said in last Thursday’s ruling that Philip Morris and the tobacco industry worked during the 1950s on a “program of disinformation” to create doubt about the dangers of smoking. Williams “learned from watching television that smoking did not cause lung cancer,” but, once he came down with it, said the “cigarette people” had lied to him.

Thursday’s ruling followed a decision by the U.S. Supreme Court last year to send the case back to Oregon.

The state Supreme Court was told to reconsider the award based on its decision about instructions for the trial jury that Philip Morris had proposed and the trial judge rejected.

The Oregon high court on Thursday said there were other defects in the instructions, violating Oregon law, that justified the trial judge’s decision.

The Oregon court said that, for example, the instructions Philip Morris suggested would have forbidden the jury to consider the profits the tobacco company made through misconduct that was not illegal.

The Oregon Supreme court decision Thursday didn’t take issue with the U.S. Supreme Court on another point it raised — that Oregon courts couldn’t allow jurors to use punitive damages to punish a defendant for harm done to anybody who wasn’t part of the suit.

The instructions about punitive damages have been at the center of the legal battle over the suit brought by Williams’ widow, Mayola.

Philip Morris, which has its largest cigarette plant in Richmond, Va., will appeal Thursday’s ruling to the U.S. Supreme Court, the tobacco maker said. Business groups have watched the case closely as a precedent setter for large jury awards in product liability suits.

The Oregon high court made its first decision in 2002, refusing to hear an appeal from Philip Morris.

Then the U.S. Supreme Court rejected the judgment of nearly $80 million, saying that punitive damages generally should be held to no more than nine times actual economic damages. It declined, however, to make that a firm rule.

In the Williams case, the family was awarded $521,000 in actual damages. The punitive damages are about 150 times greater.

Next, the Oregon Supreme Court upheld the punitive damages, citing “extraordinarily reprehensible” conduct on the part of Philip Morris officials.

Then came the U.S. Supreme Court’s second take on the case, last year, a narrower ruling that did not address the size of the award but only how juries could consider the conduct of defendants in determining punitive damages.

Philip Morris, a unit of Altria Group, called Thursday’s decision inexplicable.

“The U.S. Supreme Court did not take the time and effort to consider this case and remanded it to the Oregon Supreme Court in order for that court to reach the same erroneous decision,” said William Ohlemeyer, vice president and associate general counsel for Philip Morris USA.

A lawyer on the family’s side, James Coon of Portland, said the Oregon court was right to focus on whether the jury instructions were correct under Oregon law. It is a threshold question that has to be answered before the courts consider whether the damages are unconstitutionally large.

The family released a statement hailing the decision. Should the Williams suit prevail, Oregon law requires that 60 percent of the punitive damage award go to a statewide fund to assist crime victims.

Edward Sweda Jr. of the Tobacco Products Liability Project at Northeastern University School of Law in Boston said it’s possible the U.S. Supreme Court won’t reconsider the size of the award.

Associated Press Writer Sarah Skidmore contributed to this report.

The Oregon decision is at:

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