Court upholds $79.5 mn ruling against tobacco giant

USA
Court upholds $79.5 mn ruling against tobacco giant
By IANS, Feb 3, 2006 - 3:37:37 PM

The Oregon Supreme Court Thursday upheld a $79.5-million punitive damages award given to the family of a smoker who died of cancer.

The court said that the award against tobacco giant Philip Morris was not excessive given the "extreme and outrageous circumstances" which saw the company continue to aggressively market cigarettes despite clear evidence of the cancer-causing properties.

The ruling upheld a 1999 award by a county court jury to the family of Jesse D. Williams, a janitor who died in 1997 of lung cancer at the age of 67. The lawsuit, known as the Williams-Branch case, was brought on behalf of Williams' family.

The county court jury awarded $821,000 dollars in compensatory or actual damages, which were reduced under state law to $521,000. The trial court reduced the punitive damages award to $32 million, but in a June 2002 ruling the Oregon Court of Appeals reinstated the original $79.5 million punitive damage award.

Altria Group Inc., the parent company of Philip Morris, said in a news release Thursday the award, which is 152 times the compensatory judgment, is grossly excessive and bears no reasonable relation to the compensatory judgment in violation of the US Supreme Court's decision in State Farm v. Campbell. In that 2003 decision, the US Supreme Court imposed limitations on the imposition of punitive damages and stated that, in cases involving substantial actual or compensatory damages, punitive damages generally should not exceed the amount of compensatory damages.

Later in 2003, the US Supreme Court granted review of the case, directed the Oregon Court of Appeals to vacate its June 2002 opinion and ordered reconsideration of the case in view of State Farm. However, the Oregon Court of Appeals, and now the state's Supreme Court, rejected the US Supreme Court's holdings regarding punitive damages.

"Because this decision violates the rules set forth in State Farm, Philip Morris USA will once again seek review of this case by the US Supreme Court," William S. Ohlemeyer, Philip Morris USA vice president and associate general counsel, said in the release.

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