Oregon Supreme Court rejects smoker's $100 million damage award..

June 28, 2010 The Oregon Supreme Court on Thursday, June 24th upheld a lower court’s ruling that set aside a $100 million punitive damages award brought by a smoker of Philip Morris cigarettes. The court ruled that Philip Morris USA was entitled to a new trial because of constitutional violations during the original trial in Multnomah County Circuit Court, which began in 2000. Specifically, the Supreme Court said the trial court erred in its instructions to the jury on punitive damages.

It remanded [sends an appealed case back to the trial court for further action] the case to the circuit court for a new trial limited to the question of punitive damages.

Background:
In this case, which was originally (see paragraph below) brought 10 years ago in 2000, a Multnomah County jury awarded approximately $168,000 in compensatory damages and $150 million in punitive damages against PM USA, and the trial court later reduced the punitive award to $100 million. In 2006, an intermediate appellate court affirmed the compensatory award, but reversed the punitive damages award and ordered a retrial on punitive damages.

The original lawsuit was filed by Paul Scott Schwarz on behalf of his late wife, Michelle Schwarz. The suit accused Philip Morris of negligence, strict product liability and fraud in the manufacture, marketing, and research of the company’s low-tar cigarettes. According to court documents, Michelle Schwarz switched to the Philip Morris low-tar Merit cigarette brand in 1976. She continued to smoke one pack of cigarettes a day after she switched brands, believing that low tar and nicotine filters weren’t as unhealthy as “full-flavored” cigarettes. She died in 1999 at age 53 from a brain tumor that was the result of metastatic lung cancer.

In 2006, the Oregon Court of Appeals affirmed the compensatory damages but ordered a retrial on punitive damages. The case then made its way to the Oregon Supreme Court. It was argued and submitted last November 2009.

The Oregon Supreme Court 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,. The U.S. Supreme Court has ruled that constitutional restrictions forbid imposing punitive damages on such a basis.

References: PM USA Entitled to New Trial Oregon Supreme Court rejects punitive damage award, CSP Daily News, 6/28/2010; Oregon High Court Voids $100 Million Punitive Awards, Grants New Trial On Amount, Posted by Gerald C. Matics, (gerald.matics@lexisnexis.com.), Litigation Resource Community, 6/28/2010.