Oregon Supreme Court orders $99 million award against Philip Morris
Published: Friday, December 02, 2011, 6:18 PM Updated: Friday, December 02, 2011, 6:28 PM
By Aimee Green, The Oregonian The Oregonian
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 tobacco 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 US$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 US$99 million.
The state was worried it would never collect on the US$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 awarded all $99 million to Williams.
If Friday’s ruling stands, Williams will get an additional US$45 million from Philip Morris. The state will get almost US$55 million.
More
The Oregonian’s continuing coverage of the case of the estate of Jesse Williams vs. R.J. Reynolds.
In arguments before the court in September, Philip Morris contended that the state of Oregon had already signed off on its right to the money because in 1998 – one year before the jury’s verdict – then-state Attorney General Hardy Myers had agreed not to pursue any more claims for injuries from tobacco exposure. The clause was part of a settlement brokered with Philip Morris, other tobacco companies and 46 states for the billions of dollars the states had paid and would continue to pay for health care for ailing, low-income smokers.
Under that deal, the tobacco companies agreed to pay Oregon $2.1 billion during the first 25 years and then about $81 million a year in perpetuity.
But attorneys for the state of Oregon and Mayola Williams argued the state was simply trying to collect on the 60 percent due to it under the state’s punitive-damages law. The type of case it was — in other words if it dealt with tobacco or something else — didn’t matter, said the attorneys for the state and Williams.
On Friday, the Oregon Supreme Court agreed.
“We’re happy with the result,” said Tony Green, spokesman for the Oregon Department of Justice. He declined to comment further because he’s not sure the case is really over.
Jim Coon, one of the Portland attorneys representing Williams, said it is possible that attorneys for Philip Morris could continue to fight, but their avenues to do so are severely limited.
“Will Philip Morris accept the judgment and actually pay what the jury said it needs to pay?” Coon said. “Or are they going to make up some other argument? They’ve got high-priced lawyers, the best that money can buy.”
Coon said Philip Morris could ask the Oregon Supreme Court to reconsider.
He says it’s unlikely that the U.S. Supreme Court would consider the issue because it deals with a state law, the Oregon punitive-damages statute.
Attorneys for the tobacco maker didn’t return a call seeking comment Friday. A Philip Morris spokesman emailed a news release. He said he couldn’t answer questions, including whether the company would appeal.
“We believe that the Oregon Supreme Court misapplied the law and reached an erroneous result,” Murray Garnick is quoted as saying in the news release. Garnick is client services senior vice president for Philip Morris USA’s parent company, Altria Group.
At the time of the 1999 award, it was the largest punitive damages award against a tobacco company in the United States.
The state’s $55 million would go into the Oregon crime victims’ compensation fund, which pays for everything from medical bills to funerals for victims of violent crime. The money, however, would likely flood the fund with more than it needs to meet current demand. State lawmakers, however, have the power to reallocate the money — and that’s likely given state’s budget shortfalls in schools, police, prisons and other programs.
