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Smoker with cancer is awarded $3-billion

The decision against Philip Morris is thought to be the largest ever for an individual suing a U.S. corporation.

©Washington Post

© St. Petersburg Times,
published June 7, 2001

A Los Angeles jury Wednesday ordered the Philip Morris Cos. to pay $3-billion in punitive damages to a 56-year-old smoker with cigarette-caused lung cancer -- by far the largest damage award ever in a single cigarette case and possibly the largest ever for an individual suing an American corporation.

The state jury, which ruled against Philip Morris on six counts of fraud, negligence and making a defective product, rejected company arguments that stockbroker Richard Boeken had freely chosen to smoke. Boeken said that he started smoking at age 13 before warnings went on cigarette packs, and despite efforts to quit was unable to stop his two-pack-a-day habit for 40 years.

Company officials said the award was "not rational" and vowed an appeal.

"For the jury to award punitive damages in this amount not only defies credibility and common sense, it makes a mockery of our judicial system," said William Ohlemeyer, Philip Morris vice president and associate general counsel. "It is the result of legal errors we believe will require reversal of this verdict."

Juror Denise Key said of the punitive damages: "We thought that figure would hurt them, make them stand up and take notice. We want them to be responsible, to put on their product that the product will kill so when you smoke you smoke at your own risk."

Whatever may happen on appeal, the decision is the latest in a pattern of escalating and enormous judgments against the tobacco industry. While the industry continues to win most individual lung cancer cases, other juries in California and Oregon have awarded damages of $25-million, $21.7-million and $80-million to individual smokers over the past two years in cases against Philip Morris and other tobacco companies. In addition, Florida returned a $146-billion judgment against the industry in a class action case last year -- by far the largest damages award ever. Philip Morris was one of five tobacco companies in that case.

All of these cases are on appeal, and trial judges have already knocked down some awards substantially. But the trend in cigarette damage cases is clearly toward larger verdicts and could ruin the industry unless appeals courts step in.

Still, the award may not pass a new test adopted by the U.S. Supreme Court, some lawyers warned.

"The punitive damage award has to bear some relationship to compensatory damage," said attorney Michael Hausfeld, who sued tobacco companies in May, claiming they violated federal racketeering laws to hook children on cigarettes.

"Clearly here the punitive award is an expression of total outrage, and I'm not sure under the Supreme Court test for a single individual that kind of a differential would be upheld," Hausfeld said.

Boeken had sought more than $12-million in compensatory damages such as medical bills and lost earnings, and between $100-million and $10-billion in punitive damages.

Boeken's attorney, Michael Piuze, said he was pleased with the verdict and continued his attack on Philip Morris, which sells a majority of cigarettes sold in the U.S.

He said the company had been lying about the effects of cigarettes for 50 years. "I believe the tobacco industry has had an undeserved long run of luck in litigation," Piuze said. "I believe (an award like Wednesday's) should have happened long ago."

During the trial, Philip Morris acknowledged that cigarettes can cause lung cancer but said that Boeken was aware of that danger for much of the time that he smoked and could have quit. Boeken, who smoked two packs of Marlboros daily from 1957 to 1991, when his cancer was diagnosed, said that he had been hooked on cigarettes.

Piuze said his client was once addicted to heroin and alcohol as well; he kicked those habits but was unable to stop smoking. His cancer has spread to his brain, and his prognosis is poor, the lawyer said.

In addition to the $3-billion in punitive damages, the jury, which began deliberations on May 22, gave Boeken $5.54-million in compensatory damages to pay for medical bills, lost wages, and pain and suffering.

According to judgments compiled by the National Law Journal, the $3-billion punitive damages award may be the largest for a single individual ever against an American corporation. Juries returned larger awards against Texaco in 1985, against Exxon in 1994 and against General Motors in 1999, but none of those cases involved individual plaintiffs.

There have been six earlier cases in which plaintiffs won individual awards since the mid 1990s, said Richard Daynard, a law professor and chairman of the Tobacco Products Liability Project at Northeastern University School of Law in Boston.

But only one of those plaintiffs has actually received any money, a 70-year-old ex-smoker who got $1.1-million from Brown & Williamson Tobacco Corp. after a 1995 jury award. The company is appealing the verdict to the Supreme Court, but was ordered to make the payment.

Shares of Philip Morris finished regular trading Wednesday at $50, down 83 cents. In after-hours trading, shares fell $1.75 to $48.25.

- Information from the Associated Press was used in this report.

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