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• $300 million trial into the 'reprehensibility' of Philip Morris begins again  

Ten years after a Multnomah County jury awarded $150 million after finding Philip Morris deceived a low-tar cigarette smoker into thinking she'd chosen a healthier alternative, the case is before a jury again.

The Oregon Supreme Court overturned the first jury's punitive-damage award because of the way the jury was instructed to deliberate. This time, with a slight but important tweak to the instructions, a new 12-person jury will decide how reprehensible the tobacco maker's actions were in causing the death of Salem resident Michelle Schwarz. The jury can award up to $300 million. Jurors were not told about the original verdict of $150 million.

Opening statements began today in the courtroom of Judge Henry Kantor. The trial is expected to last four weeks. . . .

Schwarz began smoking in 1964 when she was 18. She tried to quit but failed. In 1976, Philip Morris introduced a low-tar cigarette under the brand Merit. Schwarz, who smoked a pack a day, believed the low-tar cigarettes weren't as harmful as regular cigarettes, so she switched.

"She smoked these low-tar cigarettes from 1976 until her death in 1999" at age 53, said Larry Wobbrock, an attorney for Schwarz's estate. "She smoked them up until she got sick and couldn't."

Schwarz died after contracting lung cancer that metastasized with a tumor in her brain. The family's attorneys successfully argued to the first jury that Philip Morris was aware that low-tar smokers tended to inhale more deeply and hold the smoke longer in their lungs -- enabling smokers to rationalize a habit they would otherwise consider deadly.

"The case is no longer about the conduct of Michelle Schwarz. It's about the misconduct of Philip Morris," Wobbrock said.

An attorney for Philip Morris, however, spoke at length about how Schwarz should have known that smoking in general was dangerous. . . .

Kelly also said Philip Morris doesn't make $300 million of profit in five days. What's more, he said Philip Morris has paid dearly for damage caused by smoking -- $55 billion since 1997 as part of an agreement with 50 state attorneys general. About $526 million of that has gone to Oregon.

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• AUDIO: Court Gives New Life To $150 Million Tobacco Lawsuit 

Tobacco giant Philip Morris could be back on the hook for a $150 million judgement. The Oregon Supreme Court Thursday gave the green light for a jury to reconsider the amount of damages to be awarded to the family of a woman who died after years of smoking.

Michele Schwarz died in 1999 of complications from lung cancer. Her family sued Philip Morris, whose parent company is now called Altria. . . .

Now, the Oregon Supreme Court has ruled that the case should go back to trial, but only to determine the amount of damages, not whether those damages were justified.

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• ESTATE OF SCHWARZ v. PHILIP MORRIS INCORPORATED 

WALTERS, J.

The decision of the Court of Appeals is affirmed. The judgment of the circuit court is affirmed in part and reversed in part, and the case is remanded to the circuit court for further proceedings.

WALTERS, J.

The Due Process Clause of the Fourteenth Amendment[ 2 ] prohibits a jury from imposing punitive damages to punish a defendant directly for harm caused to nonparties. However, a jury may consider evidence of harm to others when assessing the reprehensibility of the defendant's conduct and the appropriate amount of a punitive damages verdict. Philip Morris USA v. Williams, 549 US 346, 356-57, 127 S Ct 1057, 166 L Ed 2d 940 (2007) (Williams II). In this "low-tar" tobacco case, we decide that the trial court correctly refused defendant's requested instruction that would have informed the jury on the impermissible uses of evidence of harm to others without also instructing the jury on its permissible use, but that the trial court erred in giving an instruction on punitive damages that was, conversely, incomplete and therefore incorrect. We affirm the decision of the Court of Appeals vacating the jury's punitive damages award, Estate of Michelle Schwarz v. Philip Morris Inc., 206 Or App 20, 135 P3d 409 (2006), and remand the case to the trial court for a new trial limited to the question of punitive damages.

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Supreme Court sends tobacco case back to lower court for reevaluation  

The Oregon State Supreme Court released an opinion Thursday on a case involving Philip Morris Inc., a large tobacco company, and the estate of a woman who died from complications with lung cancer. . . .

While such information cannot be used directly in determining the amount awarded in punitive damages, it is usable in determining the reprehensibility of the defendant’s conduct.

The Court ruled that this must also be made clear to the jury through implicit instruction. It wrote “when the law draws a line between the proper and improper use of evidence, a jury instruction must be equally explicit in describing what falls on each side of that line.” . . .

Norman Williams, a law professor at Willamette University and unrelated to the plaintiff in Williams v. Philip Morris Inc., was involved with punitive damage litigation before he was a professor. He said that the ruling, while constitutionally consistent, could potentially confuse a jury and more guidance would have been useful. . . .

Williams described the awarded amount as “shocking” and “grossly excessive.”

“That’s not even close to permissible,” Williams said.

Williams said that juries in cases like this “typically act reasonable and don’t award mammoth punitive damage awards,” but large defendant’s like tobacco corporations, motor companies and insurance providers were equally likely to be hit by a “runaway jury.”

As the issue that reached the court was on the instruction of the jury, not the appropriateness of the punitive damage awards, there is potential for this case to be re-appealed after the remand of the case.

“I would be surprised if on remand, there isn’t a significant battle regarding just how much punitive damages could be awarded,” Williams said.

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Ore. trial court to reconsider $100M tobacco case 

The Oregon Supreme Court has ruled that Philip Morris does not have to pay $100 million in punitive damages to the family of a smoker who sued the tobacco giant over its low-tar cigarettes.

The case, however, is going to another jury to decide just how much the death of Michelle Schwarz from lung cancer in 1999 will cost Philip Morris — and legal experts say it could easily be another big award.

A Multnomah County jury in Portland originally awarded the Schwarz family $150 million in March 2002 before the trial judge reduced it to $100 million.

On Thursday, the Oregon Supreme Court vacated the $100 million award and sent the case back to the trial court to reconsider the punitive damages after ruling the judge failed to properly instruct the jury.

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Philip Morris $100 Million Punitive Verdict Reversed (Update2)  

Philip Morris USA won a ruling from the Oregon Supreme Court blocking a $100 million punitive damage verdict awarded to the husband of Michelle Schwarz, an Oregon woman who died of lung cancer in 1999.

The court today ordered a new trial on punitive damages, ruling that the jury that awarded the money received faulty instructions from the trial judge. Today's ruling upholds the decision of a state appeals court.

The Oregon Supreme Court found that the trial court should have told jurors that they weren't permitted to award punitive damages to punish Philip Morris for harm caused to anyone other than Schwarz.

"The trial court did, in giving the uniform jury instruction, permit the jury to consider evidence of harm to nonparties in assessing punitive damages," Justice Martha Lee Walters wrote on behalf of the court.

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Oregon Supreme Court says Philip Morris doesn't have to pay $100 million to deceased smoker's family  

The Oregon Supreme Court today declined to reinstate $100 million in punitive damages that cigarette maker Philip Morris was ordered to pay to the family of a deceased low-tar smoker.

The high court upheld a 2006 decision by the Oregon Court of Appeals, which faulted a Multnomah County Circuit judge's instructions to a jury on how to determine punitive damages. The Supreme Court said a new trial can be held to re-determine how much the family of Michelle Schwarz should receive.

The jury award of $168,514 -- for economic losses, pain and suffering -- still stands. . . .

In its opinion today, the Oregon Supreme Court acknowledged the "fine" distinction the law makes in instructing jurors on how to award punitive damages. A jury may not impose punitive damages to punish a defendant directly for harm to other smokers, the court said. But a jury may "consider evidence of harm to others when assessing the reprehensibility of the defendant's conduct."

The U.S. Supreme Court had not established this standard at the time of the Schwarz verdict.

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Philip Morris USA Says Oregon Supreme Court Rejects Damage Award 

-The Oregon Supreme Court today affirmed a lower court's order setting aside a $100 million punitive damages award in a personal injury case brought by an individual smoker. The Court held that, as a result of constitutional violations at trial, Philip Morris USA (PM USA) was entitled to a new trial on the issue of punitive damages.

"We believe the Oregon Supreme Court's ruling properly recognized the constitutional limits in assessing punitive damages," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of PM USA. "The Oregon Supreme Court correctly held that the trial court violated the U.S. Constitution by allowing the jury to impose punitive damages to punish for harm to non-parties," said Garnick. The United States Supreme Court has ruled that constitutional restrictions forbid imposing punitive damages on such a basis.

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• Oregon Supreme Court rejects $100 million cigarette verdict  

Philip Morris won’t have to pay $100 million or more in punitive damages to the estate of a Salem woman who died of cancer related to cigarette smoking.

But a ruling today by the Oregon Supreme Court sends that case back to Multnomah County Circuit Court, where a jury will decide the amount of damages.

In 2002 a jury awarded $150 million in punitive damages against the cigarette maker, later reduced by the trial judge in Portland to $100 million. But the Oregon Court of Appeals reversed that award on a 5-4 vote in 2006 — and the Supreme Court upheld that reversal on a 5-0 vote. Two justices did not participate.

The case turned on one of the trial judge’s instructions to the jury that the appellate courts ruled was erroneous. The high court said a jury, not the justices, should decide the amount of punitive damages.

“It is still the constitutional role of the jury to decide all facts, including those necessary to assess punitive damages in the first instance,” Justice Martha Walters wrote for the high court. “We cannot decide the damages that a correctly instructed jury would award, and we therefore must remand this case for a jury’s decision.”

The case was brought by the family of Michelle Schwarz of Salem, who died in 1999 of a brain tumor linked to lung cancer. She was 53.

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• State high court ponders award in cigarette lawsuit  

A multimillion-dollar award from Philip Morris to the estate of a Salem woman will hinge on a narrow legal point argued Monday in the Oregon Supreme Court.

At stake is a 2002 jury award of $150 million in punitive damages against the cigarette maker, later reduced by the trial judge to $100 million, and then reversed in 2006 by the Oregon Court of Appeals.

On a 5-4 vote, the appeals court upheld a verdict of fraud and negligence against Philip Morris, and an award of $169,000 in compensatory damages to the family of Michelle Schwarz, who died of lung cancer in 1999 at age 53.

Schwarz's family argued in Multnomah County Circuit Court that Philip Morris had fraudulently marketed its low-tar Merit brand, which Schwarz switched to in 1976, as safer than regular cigarettes.

But the appeals court ruled the jury should not have considered the harm to individuals outside Oregon in deciding the amount of punitive damages.

The appeals court ordered new proceedings in circuit court to determine only those damages, but the case was appealed to the Oregon Supreme Court.

A lawyer representing the Schwarz family, Maureen Leonard of Portland, said Monday that "more reprehensible conduct (by Philip Morris) justifies higher punitive damages."

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Schwarz v. Philip Morris - Backgrounder and commentary on Court of Appeals Decision 5-17-2006 

COMMENTARY

Mark Gottlieb, Director of the Tobacco Products Liability Project ("TPLP") at Northeastern University School of Law, emphasized that, "It is important to note that the basis for reversing the punitive damages award was not its size but rather a technical issue stemming from a one sentence jury instruction that a 5-4 majority of the Court believed should have been given. To think that omission of the instruction prompted this jury to issue a mere $150 million punitive damages verdict on behalf of victims of Philip Morris's fraud and negligence all over the country would seem absurd. Perhaps the Oregon Supreme Court will agree that the failure to include the instruction was, at most, harmless error."

Edward L. Sweda, Jr., Senior Attorney for TPLP noted that, "Because of its long history of wrongdoing in Oregon, Philip Morris still faces the likelihood of having to pay substantial punitive damages in this case."

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• Punitive tobacco damages reversed  

A divided Oregon Court of Appeals on Wednesday issued a split decision in a landmark tobacco lawsuit, upholding a jury award of $168,514 in compensatory damages against cigarette maker Philip Morris but reversing $100 million in punitive damages.

The ruling affirmed a Multnomah County jury's 2002 decision that Philip Morris fraudulently marketed low-tar cigarettes as a healthier alternative to ordinary smokes.

But a majority of the court also decided to send the question of punitive damages back for a new trial because the lower court failed to tell the jurors not to punish Philip Morris for conduct that hurt people in other states. . . .

Although both sides in the Schwarz case plan to appeal, both found something to like about the appeals court ruling.

"Not only did they uphold the fraud, but they upheld the jury finding that the fraud was sufficiently reprehensible to justify punitive damages," said Charles Tauman, an attorney for the Schwarz family. "These two findings are very important to other cases around the country." . . .

Although the lawsuit subsequently filed by her family made several claims, the groundbreaking thrust of her case was that Philip Morris lied to smokers by selling Merits as a less harmful alternative to ordinary cigarettes when company officials were well aware that smokers altered their habits to get more nicotine.

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Oregon Court Overturns $150 Million Altria Damages (Update3) 

An Oregon appeals court overturned $150 million in punitive damages against Altria Group Inc.'s Philip Morris USA and sent the case back to a lower court to reconsider the award.

The ruling came in a suit filed by the husband of a woman who died of cancer related to smoking, according to the complaint. The decision today upheld $169,000 in actual damages for the estate of Michelle Schwarz, who died of lung cancer in 1999, and reversed the punitive damages, which were previously reduced to $100 million by the trial judge.

``The environment is improving, with the number of pending individual tobacco suits crashing down,'' said Thomas Russo, who oversees almost $3 billion at Lancaster, Pennsylvania-based Gardner Russo & Gardner, including about 3.7 million Altria shares on Dec. 31. ``It would take a lot to get the trial bar back on their saddle in this area.''

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• Schwarz v. Philip Morris 

EDMONDS, J.

On appeal, award of punitive damages vacated and remanded for new trial limited to determination of amount of punitive damages; otherwise affirmed. Cross-appeal dismissed as moot.

Linder, J., concurring.

Armstrong, J., concurring in part, dissenting in part.

Rosenblum, J., concurring in part, dissenting in part.

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• Court Vacates Verdict vs. Philip Morris 

A landmark $150 million jury verdict against Philip Morris was vacated Wednesday by an appeals court, which ordered a new trial to reconsider damages against the tobacco manufacturer after a trial judge ruled the amount was excessive.

The March 2002 verdict, later reduced to $100 million, was the first such award in the nation based on claims that low-tar cigarettes led smokers to believe they were less dangerous than regular cigarettes. . . .

The appeals court also upheld the portion of the jury ruling on fraud, negligence and liability by Philip Morris.

A spokesman for the Altria Group Inc., parent of Philip Morris, said company attorneys were reviewing the ruling.

"It's a fairly complicated opinion, but obviously they've overturned the punitive damages," said spokesman John Sorrells.

A jury ordered Philip Morris to pay $150 million in punitive damages to the estate of Michelle Schwarz, of Salem, who died of lung cancer in 1999 at age 53.

The jury had agreed with lawyers for her family, who claimed that Philip Morris fraudulently marketed its low-tar Merit brand as safer than regular cigarettes.

But Multnomah County Circuit Judge Roosevelt Robinson found that amount "grossly excessive" and reduced it by a third, to $100 million.

The Oregon Court of Appeals overturned the jury verdict Wednesday and sent the case back to the circuit court to reconsider the amount of punitive damages.

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