$150M tobacco verdict tossed

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PORTLAND, Ore. (AP) – A landmark $150 million jury verdict against Philip Morris was vacated Wednesday by an appeals court which ordered a new trial for the cigarette maker after a trial judge ruled the verdict was excessive.

The March 2002 verdict was the first such award in the nation based on claims that low-tar cigarettes led smokers to believe they were less dangerous than regular cigarettes.

A jury ordered Altria Group Inc. unit Philip Morris to pay $150 million in punitive damages to the estate of Michelle Schwarz, of Salem, Ore., who died of lung cancer in 1999 at age 53.

The jury had agreed with lawyers for her family, who claimed that Philip Morris fraudulently marketed its low-tar Merit brand as safer than regular cigarettes.

But Multnomah County Circuit Judge Roosevelt Robinson found that amount “grossly excessive” and reduced it by a third, to $100 million.

The Oregon Court of Appeals vacated the jury verdict Wednesday and remanded the case for a new trial solely to determine the amount of punitive damages.

The court ruled that it was proper for Robinson to reduce the award, but the verdict should get thrown out because he had failed to give the jury specific instructions requested by the tobacco company.

A spokesman for the Altria said company attorneys were reviewing the ruling.

“It’s a fairly complicated opinion, but obviously they’ve overturned the punitive damages,” said spokesman John Sorrells.

Calls to attorneys for the estate of Schwarz and her husband, Paul, were not immediately returned.

The jury also awarded $168,000 in compensatory damages to Schwarz’s family, which Philip Morris attorneys have argued also should be overturned.

Robinson said in his ruling to reduce the damages to $100 million that the amount was consistent with the jury verdict but still enough to deter and punish the tobacco company.

The tobacco company attorneys had argued that Robinson should have followed a 2001 U.S. Supreme Court ruling that recommended there should be no more than a 9-to-1 ratio between punitive damages and other damages awarded to compensate for losses.

AP-ES-05-17-06 1716EDT


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