$3B Record Punitive Damages in Tobacco Case Reduced to $100M

A California judge ruled yesterday that a $3 billion punitive damage award against Philip Morris was "excessive, but said he will order a retrial only" if the plaintiff does not accept a "record-breaking" $100 million award, the Los Angeles Times reports. Los Angeles County Superior Court Judge Charles McCoy upheld the $5.54 million in compensatory damages for Richard Boeken, a lung cancer patient and Marlboro smoker who successfully argued in a case decided in June that the tobacco company "lied to smokers and the government" about the health risks of smoking (Gorman, Los Angeles Times, 8/10). McCoy said that if Boeken declines to accept the $100 million by August 24, Philip Morris will be granted a new trial "solely on the issue of punitive damages" (AP/New York Times, 8/10). Boeken's attorney, Michael Piuze, said he was "grateful" for the judge's decision not to overturn the jury verdict, but "disagreed" with the reduction, saying that $100 million is not a lot of money for Philip Morris. Piuze said that Boeken would decide in the next two weeks whether to accept the $100 million award. Philip Morris said it would appeal the decision.

The Los Angeles Times reports that while the punitive award reduction provided "some relief" for Philip Morris -- which had argued for a $25 million award -- the "case remains a solid defeat for the tobacco industry," as the $100 million figure is still the "largest judgment against a tobacco company in a lawsuit brought by a single smoker." In a written statement, William Ohlemeyer, Philip Morris vice president and associate general counsel, said, "It's simply not believable that anyone living in America for the past 40 years could testify under oath that they were unaware of the risks of smoking. For these and a multitude of other reasons, this verdict should be reversed." In his decision, McCoy said that while Philip Morris' conduct had "devastating and widespread consequences," the $3 billion award was "legally excessive and ... disproportionate to the compensatory damages" traditionally given for lost earnings and medical relief. Another factor in the decision, he said, was that Philip Morris' "reprehensible" actions will likely lead to successful plaintiff lawsuits in the future (Los Angeles Times, 8/10). "Given the evidence presented at trial here, and the fact that Philip Morris refused to accept even a scintilla of responsibility for the harm it has done, the Court does not doubt that [it] will continue to incur large punitive damage awards in California and elsewhere" (Fairclough, Wall Street Journal, 8/10).