Court Overturns Tobacco Verdict

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

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

A jury had ordered Philip Morris to pay $150 million in punitive damages to the estate of Michelle Schwarz of Salem, Ore., who died of lung cancer in 1999 at 53. The jury had agreed with attorneys 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 had 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. The appeals court ruled that Robinson had failed to give the jury specific instructions requested by the tobacco giant.

The court also upheld the jury’s verdict against Philip Morris on fraud, negligence and liability.

A spokesman for 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,” spokesman John Sorrells said.

Calls to attorneys for the estate of Schwarz and her husband, Richard, were not immediately returned.

The jury also had awarded $168,000 in compensatory damages to Schwarz’s family, which Philip Morris attorneys have argued also should be overturned.