U.S. Supreme Court Grants Philip Morris Temporary Stay of $10.5 Million Damage Award in California Lawsuit
The U.S. Supreme Court on Wednesday agreed to let Philip Morris USA delay paying a $10.5 million damage award to former smoker and California resident Patricia Henley Reyes until the court acts on an appeal of the judgment, the Wall Street Journal reports (Wall Street Journal, 10/28).
In the lawsuit, Reyes -- who smoked Marlboro cigarettes from the early 1960s to 1997, when she was diagnosed with lung cancer -- alleged that Philip Morris USA concealed evidence about the risk and addictiveness of its products.
A San Francisco Supreme Court jury in 1999 awarded Reyes $1.5 million in compensatory damages and $50 million in punitive damages. A judge later halved the award to $25 million, and the California Supreme Court last year ordered an appellate court to review the 1999 ruling to comply with two U.S. Supreme Court decisions that ordered reviews of cases with high punitive damage awards.
The U.S. Supreme Court rulings did not specify an "absolute formula" to determine what punishment is reasonable, but the court did suggest that punitive damage awards be no more than nine times the amount of other damage awards in the case and that a company's wealth should not be a factor in a jury's decision. A state appellate court in Sept. 2003 reduced the damages to $10.5 million.
The California Supreme Court in September upheld the damage award, marking the first time the state has upheld such a ruling in a health-related smoking case (California Healthline, 9/17).
Philip Morris has said it wants a new trial because the original judgment was issued before the U.S. Supreme Court's ruling on punitive damage awards (Wall Street Journal, 10/28).
Following the September ruling, Reyes' attorney Madelyn Chaber said that the award reflected "a 6 to 1 ratio [in damages]," adding, "I don't think they (Philip Morris) have any other issues that the (U.S.) Supreme Court is going to care about" (California Healthline, 9/17).
According to the AP/Bakersfield Californian, the Supreme Court's temporary stay order, which prevents Reyes from collecting any part of the award until the case is heard, "indicated that all nine court members participated, including Chief Justice William H. Rehnquist," who last week was hospitalized with thyroid cancer (AP/Bakersfield Californian, 10/27).