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• Big Tobacco's loss might become Oregon sick and needy's gain 

As the Oregon Legislature convened Wednesday for the start of a monthlong legislative session, key lawmakers proposed spending much of a $56 million dollar legal windfall to avoid cutting services for the sick and needy.

Three legislators in charge of writing the state's financial plan suggest taking three-quarters of the income from a court victory over tobacco giant Philip Morris, roughly $41 million, to shrink a $200 million spending gap.

They'd use budget maneuvers and service cuts to cover the rest of the deficit. "Philip Morris' unwilling contribution to our state coffers came at a very opportune time," said Rep. Dennis Richardson, R-Central Point, a co-chairman of the Budget Committee.

Budget writers discussed their proposal as lawmakers began their first even-year session since voters decided to make the Legislature meet annually.

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Oregon’s budget benefits from historic tobacco verdict 

That Jan. 13 decision came after the Oregon Supreme Court rejected a request from Philip Morris to reconsider a December 2011 court ruling that said the tobacco company — maker of many popular brands of the drug, including Marlboro and Virginia Slims — must pay the state damages. Under Oregon’s “split recovery” law, the state is entitled to 60 percent of a punitive damage award in certain cases to be paid to the Criminal Injuries Compensation Account of the Department of Justice’s Crime Victims’ Assistance division.

Part of the award will fund crime victims programs, but the Oregon Attorney General’s office says a majority will help the Legislature deal with the budget deficit.

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Oregon Scores $56M From Philip Morris In Smoker's Suit 

Philip Morris USA Inc. will fork over $56 million to Oregon after failing to nix a 1999 punitive damage award to the state in a lawsuit brought by a deceased smoker's family, Oregon's attorney general said Tuesday.

After more than a decade of appeals, the Oregon Supreme Court in December held up Oregon's share of the $79.5 million that a jury awarded to the family of a Portland smoker who died from cancer. On Friday, the court turned down the tobacco giant's request that it reconsider its decision, according to Oregon Attorney General John Kroger.

Philip Morris attorneys told the state Tuesday that the company would end its long-fought battle and shell out the remainder of the punitive damage award and pay interest.

"This was a historic win for the Department of Justice and for Oregon," Kroger said in a statement.

Steve Callahan, a spokesman for Altria Group Inc. — which owns Philip Morris — said the payment would end a 14-year-old dispute that has gone before the U.S. Supreme Court three times.

Under Oregon law, 60 percent of punitive damage awards go to the state's crime victims' compensation fund. While some of the $56 million won from Philip Morris will fund crime victims programs, a majority of it will go to ease the state's budget deficit, according to Kroger.

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• Philip Morris agrees to pay Oregon $56 million in punitive damages in Jesse Williams' death  

Tobacco company Philip Morris has agreed to pay $56 million in punitive damages and interest to the state of Oregon, finally ending a 14-year battle over damages in the death of a Portland smoker.

An attorney for Philip Morris called the Oregon Department of Justice Tuesday, saying the company was giving up its fight after the Oregon Supreme Court refused to reconsider.

In December, the court ruled that Oregon was entitled to collect punitive damages in the death of retired school custodian Jesse D. Williams, 67, who smoked as many as three packs of Marlboros a day and died of lung cancer in 1997. A Multnomah County jury had awarded $79.5 million in punitive damages in the case -- and by Oregon law, 60 percent of that award was to go to Oregon and the rest was to go to Williams' estate. With interest and because of an agreement with Williams' estate, the state's share of the money today amounts to $56 million.

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• Attorney General: Philip Morris to pay Oregon $56 million 

The Oregon attorney general says Philip Morris USA Inc., has agreed to pay $56 million to a state crime victims fund after more than a decade fighting punitive damages awarded to the family of a Portland smoker who died of cancer.

The decision follows an Oregon Supreme Court ruling in December that rejected the tobacco giant's challenge to a portion of the punitive damages from a 1999 case.

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Philip Morris Ordered to Pay Oregon over $47 Million  

In reaching its decision, the Oregon Supreme Court held that “the state’s statutory right to a share of punitive damages is not a ‘released claim,’ as that term is defined in the [MSA], and therefore, the state did not release its right to pursue payment of its statutory interest in 60 percent of the Williams punitive damages award when it [signed the MSA].” The MSA releases claims “directly or indirectly based on, arising out of or in any way related” to certain specified tobacco-related conduct. In the court’s view, the state’s interest in the punitive damages award did not arise out of any direct participation in the Williams case but, instead, by operation of Oregon law. Therefore, any claim to the money made by the state would be to enforce a statute, not to recover damages for Philip Morris’s tobacco-related conduct. In short, according to the court, the state’s right “to the statutory share is not, even indirectly, related to or dependent on the tobacco-related conduct that is described in the MSA.”

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• Altria Records Charges and Interest of $119 Million for Tobacco and Health Judgments Related to the Williams and Bullock Cases  

Altria Group, Inc. (Altria) (NYSE: MO) today announced that its operating subsidiary, Philip Morris USA Inc. (PM USA) is recording a fourth- quarter pre-tax charge of $62 million related to tobacco and health judgments in the Williams and Bullock cases as well as incurring approximately $57 million in interest costs related to those two cases. . . .

Altria revises its 2011 full-year guidance for reported diluted EPS from a range of $1.60 to $1.66 to a range of $1.58 to $1.64, primarily due to 2011 fourth-quarter charges of four cents per share associated with the tobacco and health judgments related to the Williams and Bullock cases, partially offset by favorability related to tax items.

In connection with its decision to redefine adjusted diluted EPS as described above, Altria forecasts that 2011 full-year adjusted diluted EPS, as redefined to exclude special items listed below in Table 1, will be in the range of $2.01 to $2.07. This represents a growth rate of 6% to 9% from a 2010 adjusted base of $1.90 per share, which was not impacted by tobacco and health judgment charges.

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Ore. Supreme Court Overturns Lower Court's Decision in Williams Case  

Philip Morris USA Inc. said the Oregon Supreme Court has held that the company is required to pay the state 60% of a $79.5 million punitive damages award plus interest in a 14-year old individual smoking and health case.

The decision resulted in the Williams case, where in 1999 an Oregon jury awarded compensatory and punitive damages to an individual smoker. Under Oregon law, the state is entitled to 60% of any punitive damages award. PM USA argued that the state released any right to collect the award when it signed the Master Settlement Agreement (MSA) with tobacco companies in 1998.

"We believe that the Oregon Supreme Court misapplied the law and reached an erroneous result," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of PM USA. "As the lower court recognized, the state released its claims to any punitive damages when it signed the [MSA]."

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Ore. High Court Tells Philip Morris To Pay State $47M ($$) 

The Oregon Supreme Court ruled Friday that Philip Morris USA Inc. must pay Oregon about $47.7 million from a 1999 wrongful death verdict, rejecting the tobacco maker's argument that the state had forfeited its right to the money by signing a 1998 master settlement agreement with cigarette makers. . . .

Although Oregon law entitles the state to take 60 percent of any punitive damages award, the master settlement agreement should have barred Oregon's attempts to collect punitive damages in a 14-year-old individual death suit, according to Altria Group Inc., which owns Philip Morris.

“We believe that the Oregon Supreme Court misapplied the law and reached an erroneous result,” Murray Garnick, associate general counsel of Altria, said. “This decision is grossly unfair and contrary to the language and spirit of the master settlement agreement.” . . .

But the tobacco company refused to pay Oregon's portion of the award, saying the 1998 settlement released it and the other tobacco companies from past and future claims relating to the their tobacco-related conduct.

The Supreme Court, however, in reversing an appellate decision that would have let Philip Morris escape the damages payment, ruled the state was not a party to the Williams case and that it had a right under law to take a portion of the damages award, regardless of the nature of the underlying litigation.

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Oregon Supreme Court Upholds Verdict Against Tobacco Giant 

Despite the fact that the $79.5 million reward only represents about 2 ½ weeks of profit for the company, Philip Morris wasted a decade on appeals and stonewalling to fight the ruling. Specifically, Philip Morris has refused to pay the 60 percent punitive damages award an Oregon jury ordered to go to the state. In Oregon, punitive damages are shared with the state’s crime victims’ fund. The money is then used to help victims and their families offset the cost of mental health counseling, medical care and lost earnings.

“Today’s decision sends a strong message to corporations that have wronged Oregon consumers that they will be held accountable for their actions,” said EFO Executive Director Angela Martin.

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• WILLIAMS v. RJ REYNOLDS TOBACCO COMPANY - Argued and submitted September 19, 2011. 

This is a certified appeal from the Court of Appeals. See ORS 19.405 (describing process for certification of appeal to this court). The dispute arises out of the case of Williams v. Philip Morris, Inc., in which, in 1999, a jury awarded the Estate of Jesse Williams (the Williams estate) compensatory damages and $79.5 million in punitive damages for Philip Morris, Inc.'s (Philip Morris) fraud and negligence leading to the smoking-related lung cancer death of Jesse Williams. After over a decade of appeals, during which the case has been before this court multiple times, the punitive damages award now has been affirmed.1 Philip Morris has paid the compensatory damages and part of the punitive damages to the Williams estate, but has refused to pay the 60 percent of the jury's punitive damages award that is allocated to the state under Oregon's split recovery statute, ORS 31.735.2 The state and the Williams estate have sought to force Philip Morris to pay that 60 percent share, either to the state, as the statute directs, or, alternatively, to the Williams estate. The trial court ruled that the state had released its claim to those punitive damages in a settlement agreement in another action, and that the Williams estate also has no right to the portion of the punitive damages award allocated to the state under ORS 31.735. The state and the Williams estate appealed that ruling to the Court of Appeals, which certified the appeal to this court. We now hold that the state's statutory right to a share of punitive damages is not a "released claim," as that term is defined in the settlement agreement in the other action, and therefore, the state did not release its right to pursue payment of its statutory interest in 60 percent of the Williams punitive damages award when it settled that other action. We therefore reverse the judgment of the trial court.

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Court: Philip Morris Must Pay Millions To Oregon 

Tobacco company Philip Morris USA Inc. must pay Oregon 60 percent of a $79.5 million award in a long-running lawsuit filed by the family of a Portland smoker, the state Supreme Court ruled Friday.

The cigarette maker's parent company, Altria Group Inc., said it will lower its full-year earnings expectations based on the costs tied to the payments for this and a separate case by a former smoker.

Under Oregon law, 60 percent of punitive damage awards must go to a state fund to compensate crime victims. Philip Morris paid the family its share of the judgment but contested the requirement to pay the state.

The company argued that the state released its right to collect that money with the company's master settlement agreement in 1998 with 46 states, five U.S. territories and the District of Columbia over claims about smoking.

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• Oregon Supreme Court orders $99 million award against Philip Morris  

The Oregon Supreme Court said Friday that Philip Morris USA must pay an additional $99 million, on top of the millions it has already paid after a 1999 jury penalized the cigarette maker for causing the death of a Portland smoker.

The ruling could represent the end to a 14-year fight over damages in the death of retired Portland school custodian Jesse D. Williams. He smoked as many as three packs of Marlboros a day and died of lung cancer in 1997 at age 67.

In 2009, the U.S. Supreme Court shot down Philip Morris' appeal that the award of $79.5 million in punitive damages was unjust. The cigarette maker paid Jesse Williams' widow, Mayola, economic and noneconomic damages -- plus 40 percent of that punitive award, and 9 percent interest, as required by state law. That amounted to $61 million.

But Philip Morris continued to dig in its heels when it came to paying the state the remaining 60 percent of the punitive damages award, plus interest. Today, that amounts to $99 million.

The state was worried it would never collect on the $99 million. So the state and Mayola Williams agreed to split any award, 55 percent to the state and 45 percent to Williams. If the state lost, the court could have award all $99 million to Williams.

If Friday's ruling stands, Williams will get an additional $45 million from Philip Morris. The state will get almost $55 million.

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MAYOLA WILLIAMS and STATE OF OREGON v. RJ REYNOLDS TOBACCO COMPANY; FRED MEYER, INCORPORATED; and PHILIP MORRIS COMPANIES, INC. (PDF) 

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Oregon Supreme Court Overturns Lower Court’s Decision in Long-Running Williams Case 

Philip Morris USA (PM USA) said today that the Oregon Supreme Court held that the company is required to pay the state 60% of a $79.5 million punitive damages award plus interest in a 14-year old individual smoking and health case.

"This decision is grossly unfair and contrary to the language and spirit of the Master Settlement Agreement"

Today’s decision resulted in the Williams case, where in 1999 an Oregon jury awarded compensatory and punitive damages to an individual smoker. Under Oregon law, the state is entitled to 60% of any punitive damages award. PM USA argued that the state released any right to collect the award when it signed the Master Settlement Agreement with tobacco companies in 1998.

“We believe that the Oregon Supreme Court misapplied the law and reached an erroneous result,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Philip Morris USA. “As the lower court recognized, the state released its claims to any punitive damages when it signed the Master Settlement Agreement.”

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This decision is grossly unfair and contrary to the language and spirit of the Master Settlement Agreement.
Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking for Philip Morris USA on the OR Supreme Court decision requiring PMUSA to pay the state 60% of a $79.5 million punitive damages award plus interest in the 14-year-old Williams case.