Oregon Supreme Court upholds punitives against Philip Morris.

Agreeing with arguments made by the Center for Constitutional Litigation (CCL) and a group of Oregon ATLA members, the supreme court of that state ruled in February that a $79.5 million punitive damages verdict against Philip Morris should stand. (Williams v. Philip Morris, Inc., Nos. CC 9705-03957, CAA106791, SC S51805, 2006 WL 242456 (Or. Feb. 2, 2006).)

The decision (as all prior decisions in this case) held Philip Morris fully accountable for its wrongdoing over a 40-year period in defrauding the American public about the dangers of smoking.

CCL and the Oregon lawyers represented the plaintiff and argued that the U.S. Supreme Court, in its 2003 decision in State Farm v. Campbell, did not set hard-and-fast ratios for limiting punitive damages and that the tobacco giant's "reprehensible" behavior in misleading the public about the dangers of smoking justified the jury's verdict.

"Philip Morris knew that smoking caused serious and sometimes fatal disease, but it nevertheless spread false or misleading information to suggest to the public that doubts remained about the issue," wrote Judge W. Michael Gillette for the court.

A Multnomah County jury awarded punitive and compensatory damages to the family of a smoker who died of lung cancer in 1997. The plaintiffs claimed the defendant fraudulently hid the addictive qualities of cigarettes. The trial judge reduced the punitive damages award to $32 million, but the appeals court reinstated the original amount.

After the Oregon Supreme Court initially denied review, Philip Morris took the case to the U.S. Supreme Court, arguing that State Farm set forth guidelines limiting punitives to no more than nine times compensatory damages. The High Court handed the case back to the state appeals court to determine whether the Williams award should be reconsidered in light of State Farm.

That court concluded that the award was not unconstitutionally excessive, and the Oregon Supreme Court upheld its ruling, citing the "extreme and outrageous circumstances" of the cigarette maker's conduct.

Calling the award "grossly excessive," Philip Morris said it intends to take the matter back to the U.S. Supreme Court.

"The Oregon Supreme Court closely tracked State Farm's constitutional analysis and made this a particularly unattractive case for further review," said CCL President Robert Peck. "The court focused on the cigarette manufacturer's fraudulent and reprehensible conduct, exposed by this case. That focus appropriately anchored Philip Morris's misconduct to the legitimate purpose of punitive damages."