Jury Orders Philip Morris to Pay $3B to Smoker

A Los Angeles jury Wednesday ordered Philip Morris Inc. to pay more than $3 billion in damages to Richard Boeken, a 56-year-old smoker with lung cancer, the Los Angeles Times reports. The Times reports that the verdict marks "one of the largest jury awards in history" and "once-invincible" Big Tobacco's "worst defeat at the hands" of an individual plaintiff (Levin/Moultrie, Los Angeles Times, 6/7). The state jury, which found Philip Morris guilty on six counts, including fraud, negligence and manufacturing a "defective product," awarded Boeken $5.54 million in compensatory damages and $3 billion in punitive damages (Kaufman, Washington Post, 6/7). During the case, Michael Piuze, Boeken's attorney, "mounted an emotional assault" against Philip Morris, arguing that the company "glamorized smoking" despite medical evidence of the "harmful effects" (Sterngold, New York Times, 6/7). Piuze "expressed satisfaction" with the verdict and criticized the tobacco company. "They're liars. They've lied for 50 years," he said, adding, "They lied, lied, lied and lied and lied. Now in 2001, Philip Morris admits that tobacco causes lung cancer" (Jablon, AP/Philadelphia Inquirer, 6/7). However, lawyers for Philip Morris "assailed" the verdict and "vowed" to appeal the decision. "This verdict is outrageous and holds our legal system up to ridicule," William Ohlemeyer, associate general counsel for the tobacco company, said (Vanden Brook, USA Today, 6/7). During the trial, Philip Morris argued that "nothing Philip Morris did caused Boeken to smoke or kept him from quitting" -- an argument rejected by the jury (Los Angeles Times, 6/7).

Maurice Leiter, a lawyer with Arnold & Porter, the firm that represented Philip Morris, called the verdict "unjustified," adding, "We don't believe the evidence justifies the verdict or the award" (New York Times, 6/7). Ohlemeyer said that Philip Morris would ask Judge Charles McCoy to set aside the "outrageous" and "wildly out of line" verdict. The Los Angeles Times reports that trial judges often reduce such "gargantuan" awards (Los Angeles Times, 6/7). Under California law, punitive damages must "bear a reasonable relationship" to compensatory damages, usually about three times the amount in "high price tag" cases, Ohlemeyer said (Fairclough, Wall Street Journal, 6/7). Marc Cohen, a Goldman, Sachs and Co. tobacco industry analyst, said that Philip Morris would likely win an appeal to overturn the judgment. "There's no doubt that a $3 billion verdict is eye-catching, but it's also a story book verdict. They won't allow it to stand," he said (New York Times, 6/7).

Meanwhile, Philip Morris has begun "shopping around the contours of a bill" that would allow the FDA to regulate the sale of tobacco products, but "the company is having a hard time finding" lawmakers to support the plan. In recent months, Philip Morris has met with congressional leaders from both parties, as well as members of the Senate and House committees that oversee the FDA, "searching for a champion" for the proposal, but "volunteers are in very short supply." Steven Parrish, head of legislative affairs for Philip Morris, said, "There hasn't even been a hearing. It's going to be tough to get anything passed this year." According to the New York Times, Philip Morris hopes that regulation will "actually make it easier to do business," establishing a "single standard" on issues such as labeling "instead of a different one for every state." However, Philip Morris has found that "tobacco is no longer the pressing issue in Congress that it was just a few years ago." William Corr, vice president of the Campaign for Tobacco-Free Kids, said, "With this administration, there's a sense that tobacco legislation just isn't going anywhere." Still, the New York Times reports that the agenda "may change with control of the Senate changing hands," pointing out that Sen. Edward Kennedy (D-Mass.), incoming chair of the Senate Health, Education, Labor and Pensions Committee, which oversees the FDA, has "already pledged to hold hearings" on tobacco regulation (Winter, New York Times, 6/7).