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Citing the U.S. Supreme Court's ruling this year in State Farm v. Campbell, a California appellate court has ordered a lung cancer victim's

$25 million award of punitive damages against Philip Morris reduced to $9 million-six times her compensatory damages of $1.5 million.

The ruling was noteworthy in two respects: It came grudgingly from a court that had previously affirmed the ruling, and it extended the concept of a ratio between compensatory and punitive damages from economic injury to personal injury cases, which the U.S. Supreme Court has not done.

"In light of Campbell we do not believe the 17-to-1 ratio reflected in the present judgment can withstand scrutiny," Justice Patricia Sepulveda wrote for the three-judge First District Court of Appeal panel in Henley v. Philip Morris Inc. (A086991).

"As we read the case, a double-digit ratio will be justified rarely, and perhaps never in a case where the plaintiff has recovered an ample award of compensatory damages."

Patricia Henley claimed she first started smoking in 1961 or 1962, at the age of 15, having been misled by a tobacco industry campaign denying any link between smoking and serious illness, and became addicted.

In 1997, she was diagnosed with lung cancer, which is now in remission, and she sued in 1999 under a new state law allowing individuals to recover for newly discovered smoking-related illnesses.

A San Francisco Superior Court jury awarded her $1.5 million in compensatory damages and $50 million in punitive damages, which the trial judge reduced to $25 million.

The Court of Appeal already had affirmed the judgment, but the California Supreme Court remanded it for reconsideration in light of Campbell.

"We conclude that in light of that decision, the $25 million on punitive damages awarded in this matter cannot be sustained on the present record, but that an award of $9 million would satisfy the constitutional standards enunciated in that case," Sepulveda wrote for the appellate panel.

"According we will reverse for a new trial on punitive damages unless plaintiff agrees to a reduction of the judgment to reflect such smaller award. In all other respects we reiterate our previous decision."
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Publication:Liability & Insurance Week
Geographic Code:1USA
Date:Sep 29, 2003
Previous Article:WATCH ON THE MEDIA.

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