Oregon Court of Appeals: Philip Morris Jurors Acted Reasonably

Posted on Jul 17, 2015

The Oregon Court of Appeals recently found that the jury who awarded $25 million in punitive damages to the estate of a deceased smoker acted reasonably in setting this award. In explaining its decision, the Court compared Philip Morris' behavior to that of someone who committed "manslaughter" under Oregon criminal law. An appeal is likely.

"Punitive damages" are damages that are not intended to compensate a plaintiff for her loss, but instead, to punish the defendant for its behavior. There are special rules that govern the proof of punitive damages, and how they are distributed. One factor a jury considers in assessing punitive damages is the wealth of the defendant.

In this particular case, the deceased smoker began smoking at the age of 18. Due to concerns about her health, the deceased, Michelle Schwarz, switched to a lower tar cigarette that was introduced in 1976. Nonetheless, the smoker died in 1999 due to a brain cancer caused by metastatic lung cancer.

The Court explained that the cigarette company engaged in a decades-long scheme to defraud smokers, and keep them smoking, even though it knew the consequences of continued tobacco use. The Court also reasoned that in introducing lower tar cigarettes, the tobacco company was sending a message that the cigarettes were safer and healthier, when in fact they were not.

This case began in 2000 as a wrongful death suit. In 2002, a jury in Multnomah County awarded $160,000 in compensatory damages, and $150 million in punitive damages. However, a judge reduced the punitive damage award to 100 million, and on the first appeal, the Oregon Court of Appeals struck down the $100 million award, and the Oregon Supreme Court refused to reverse or change the Court of Appeals decision.

As the cigarette company continues its appeals, the judgment entered against it earns 9% per annum interest. Attorneys for the plaintiffs expect the litigation to continue for another one to five years.