Supreme Court Upholds $79.5 Million Punitive Award Against Philip Morris

Tobacco giant Philip Morris must pay more than $79.5 million in punitive damages to the widow of a longtime Oregon smoker, the U.S. Supreme Court has ruled.

The nation’s highest court denied Philip Morris’ appeal on the grounds that the massive financial award, previously approved by the Oregon Supreme Court, went against an earlier U.S. Supreme Court ruling limiting the amount of punitive damages in the case.

The lawsuit at the center of the case was filed by Mayola Williams, whose husband died of lung cancer in 1997 after smoking Philip Morris’ Marlboro cigarettes for more than 40 years. The husband, a public school janitor from Portland, smoked up to three packs a day and believed assurances by tobacco industry that smoking posed no health risk.

Supreme Court Sets Aside, Then Upholds Award

Williams was awarded $821,000 in compensatory damages, but that amount later was reduced to $521,000. She also was awarded $79.5 million in punitive damages, which are permitted by courts to in effect punish defendants for their conduct. With interest, the award ballooned to more than $145 million.

In 2003, the U.S. Supreme Court set aside the punitive damages after ruling that such damages may be no more than nine times the compensatory damages in a case. The Oregon Supreme Court upheld the award, sending the case back to the U.S. Supreme Court, which in 2007 set aside the award for a second time. The court held that the jury award was unconstitutional as it imposed damages to punish a defendant for harm done to people who were not parties to a lawsuit.

In 2008, the Oregon Supreme Court upheld the $79.5 million punitive damages award for a second time and ruled that since Philip Morris had included flawed jury instructions in the case, the company had waived its claim of federal constitutional error. Philip Morris appealed again and the U.S. Supreme Court heard arguments on the case in December 2008.

Today, the high court dismissed Philip Morris’ latest appeal and said the appeal should not have been granted by lower courts. The move leaves in place the $79.5 million award against the tobacco company.

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