Oregon Jury Takes Second Look At Tobacco Suit Damages

A Portland jury is reconsidering a $100 million damage award against Philip Morris in a suit over low-tar cigarettes that goes back more than a decade.

In 2002, a jury awarded $150 million in punitive damages after finding Philip Morris deceived Michelle Schwarz of Salem into thinking low-tar cigarettes were a healthier alternative.

In appeals, the amount was reduced by $50 million, and then the award was sent back for reconsideration.

The Oregonian reported the case could be another windfall for Oregon’s crime victim compensation fund, which reaped millions after the conclusion of a suit a Portland janitor’s family filed against Philip Morris.

The fund gets 60 percent of punitive damage awards. Earlier this week, Oregon legislators moved to use about $40 million from the Portland case to patch the state budget.

In opening statements Thursday for a proceeding that could last four weeks, an attorney for her estate said Schwarz began smoking in 1964 when she was 18, tried to quit but failed, and in 1976, switched to the low-tar cigarette Merit, believing they weren’t as harmful as regular cigarettes.

“She smoked these low-tar cigarettes from 1976 until her death in 1999,” said attorney Larry Wobbrock. “She smoked them up until she got sick and couldn’t.” She died at 53 after cancer spread from her lungs to her brain.

Attorney Frank Kelly for Philip Morris said Schwarz should have known that smoking in general was dangerous. She had known since she was a little girl growing up in the 1950s and early 1960s – her parents were smokers – that it was dangerous, Kelly said.

Kelly said that it was widely believed in the 1960s, 1970s and later that the less tar there was in cigarettes, the better. Even the U.S. Public Health Service – using the voice of James Earl Jones – promoted that message in 1976, he said.

Schwarz’s family filed suit in 2000, and in 2002 the jury awarded $168,514 for economic and noneconomic damages, and $150 million in punitive damages. At the time, it was the largest punitive damages award in an individual smoker case in the nation.

A judge later reduced the punitive damages to $100 million.

In 2010, the Oregon Supreme Court reversed the punitive damages award, saying that the U.S. Supreme Court had created a fine distinction for instructing jurors on what to consider in awarding punitive damages: A jury can’t impose punitive damages to punish a defendant directly for harm to other smokers, but it can consider evidence of harm to others in judging how reprehensible a defendant’s actions were.