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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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• Court throws out cigarette suit similar to Ore. case 

A similar case involving a $100 million punitive damage award against Philip Morris is pending before the Oregon Court of Appeals.

In March of 2002 an Oregon jury found in favor of the estate of Michelle Schwarz of Salem, who died of lung cancer in 1999 at age 53.

It was the first such award in the nation.

The court reversed the verdict and sent the case back to Madison County court with instruction to dismiss the class-action lawsuit.

The state Supreme Court ruled in a 4-2 decision that the Federal Trade Commission specifically allowed companies to characterize their cigarettes as "light" and "low tar," so Philip Morris did not improperly mislead customers about the health impacts of its cigarettes.

"If the FTC has specifically authorized the use of the terms .... PM USA (Philip Morris) may not be held liable under the Consumer Fraud Act, even if the terms might be deemed false, deceptive or misleading," Justice Rita Garman wrote for the majority.

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• Court hears appeal of tobacco damages 

SALEM — A lower court's $100 million punitive damage award against cigarette maker Philip Morris should be overturned as unconstitutional, the state Court of Appeals was told Monday.

The March 2002 judgment in Multnomah County was the first such award in the nation based on claims that low-tar cigarettes are as dangerous as regular ones.

Edward Sweda, a lawyer for the Tobacco Products Liability Project at Northeastern University, said Monday he believes the Oregon award is tied, with a California case, as the largest unreversed punitive damage award involving a single smoker.

"This is a very important case on the national scene,'' Sweda said in a telephone interview. . . .

An Oregon jury found in favor of the estate of a Michelle Schwarz of Salem, who died of lung cancer in 1999 at age 53.

Lawyers for the estate argued that Philip Morris fraudulently marketed its low-tar Merit brand as safer than regular cigarettes. The company says it never claimed Merits were healthier than regular filtered cigarettes.

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• Philip Morris Denied New Trial in $100 Million Oregon Verdict  

Philip Morris Cos., the world's largest tobacco seller, lost a bid for a new trial over a $100 million damage award to an Oregon smoker's family.

Multnomah County Judge Roosevelt Robinson's ruling today clears the way for both sides to appeal portions of the case brought by the family of Michelle Schwarz, who died of lung cancer in 1999. . .

Relatives of Schwarz, who died at 53, plan to appeal the judge's decision in May to cut the damage award to $100 million from $150 million, said attorney Chuck Tauman.

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Judge Reduces $150M Award Vs. Tobacco 

A judge on Thursday reduced a landmark $150 million punitive award against Philip Morris to $100 million, saying the original amount was "grossly excessive."

Judge Roosevelt Robinson's ruling came six weeks after a jury ordered the tobacco company to pay $150 million in punitive damages to the estate of Michelle Schwarz, who died of lung cancer in 1999 at age 53.

Philip Morris said in a statement it "will mount a vigorous appeal" in hopes of overturning the entire award.

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U.S. Light Cigarette Case Under Close Scrutiny 

The Australian Competition and Consumer Commission is carefully examining legal developments in the United States after a major court judgement against a tobacco company over the use of terms such as 'light' and 'mild' on cigarette packaging, ACCC Chairman, Professor Allan Fels, said today.

An Oregon jury has ordered tobacco giant Philip Morris pay US$150 million after a smoker of low tar cigarettes, now deceased, had argued that Philip Morris gave a misleading impression that they were safer than normal cigarettes.

"The ACCC is interested in the outcome of that case and will consider any information that might be relevant to the ACCC's own investigation into whether Australian consumers have been misled by the use of the terms here", Professor Fels said.

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Philip Morris Light Cigarette Trial Yields $150M Verdict 

A massive $150 million punitive jury verdict in Portland, Ore., against Philip Morris Cos. Inc. to the estate of a smoker who died of lung cancer may be a harbinger of a new wave of judgments against the tobacco industry.

The recent verdict included $115 million in punitives on the plaintiff's charge that Philip Morris had committed fraud in its marketing of "light" cigarettes. This judgment was the first in the nation where a jury has specifically found a tobacco company made, in the words of the jury verdict form, "false representations that 'low tar' cigarettes delivered less tar and nicotine to the smoker and were therefore safer and healthier than regular cigarettes." . .

Philip Morris' ads included referrals to FTC smoking-machine tests that Merit delivered 8 milligrams of tar, or about half that of regular cigarettes. The plaintiff contended that Philip Morris knew these tests were misleading and that the cigarette "delivers double that amount," or about the same amount as other cigarettes, Tauman said. By using the numbers, he said, the ads gave a "scientific" cachet to the lower-tar delivery claims.

The Portland jury agreed, awarding $168,000 in compensatory damages and $150 million in punitives, including $115 million on the fraud claim. Schwarz v. Philip Morris Inc., No. 0002-01376 (Mulnomah Co., Ore., Cir. Ct.).

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Lawyer takes risk for vision of the right 

It was perhaps the defining moment of Wobbrock's career, but his face never betrayed it.

Certainly, Wobbrock said later, he was pleased that the jury made a statement that Philip Morris had fraudulently marketed low-tar cigarettes as a healthier alternative to regular smoking.

But even sitting in his office with the door closed, Wobbrock still didn't celebrate his stunning success. He didn't pull out a bottle of scotch to toast the moment, the way many lawyers would. . .

In the end, he smoked because he had to, Wobbrock said. "If it (quitting) was a matter of resolve, my father would have done it. Eighty-five percent of the people (who smoke) want to quit. That tells you something."

The more Wobbrock read, the angrier he got.

"I think cigarette companies are evil. I think they're really evil, and I think they're striving for respectability but they don't deserve it. They're drug dealers, and they target children," he said.

Wobbrock said that winning the Schwarz case made him feel that he had settled a personal score as well. "They ought to pay for whatever they've done to Michelle Schwarz, my father and 15 million other people," he said.

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LETTER: Only the lawyers win / Once again jurors gave money to relatives of a person who had a choice  

Michelle Schwarz [who died of lung cancer in 1999, after smoking for about 25 years] knew the risks of smoking. It seems that no one is responsible for their own actions anymore. They will say it's not for the money. Yeah, right.

The real winners in all of this are the lawyers. There will be years of appeals and the relatives probably will not end up with a dime once the lawyers get their hands on their share of the loot.

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EDITORIAL: This isn't tobacco country 

About now, executives at tobacco giant Philip Morris may be crafting an in-house warning label to paste to the Northwest corner of their sales maps: "Pitching cigarettes in Oregon could be hazardous to our economic health." . .

The Portland verdict ought to send two messages to Philip Morris and other cigarette makers. One is that in Oregon, at least, juries are eager to punish tobacco companies for deceptive marketing over the years of "low tar" and "ultralight" cigarettes that actually are just as harmful to health as regular smokes. The tobacco industry faces similar lawsuits in 11 other states.

The second message is that Oregon is no longer fertile ground for growing tobacco or smokers. The state's expanded anti-smoking effort launched in 1996 is taking hold. Thanks to its Quit Line, tobacco prevention campaign and other programs, cigarette smoking in Oregon is down 29 percent, far better than the 13 percent drop nationally. . .

Massive jury awards against the tobacco industry grab the headlines.

But not smoking is the real victory.

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