$28 Billion Philip Morris Award Slashed

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$28 Billion Philip Morris Award Slashed

LOS ANGELES -- Superior Court Judge Warren Ettinger on Wednesday upheld a California jury's decision that Philip Morris was partially responsible for Betty Bullock's lung cancer, yet declared her record-breaking $28 billion punitive damages award "excessive," and said that $28 million would instead be "a reasonable sum to be awarded against Philip Morris in these circumstances."

The judge simultaneously denied the tobacco company's request for a new trial, arguing that it provided "no evidence" to refute Bullock's allegations the company had repeatedly lied to the public about the dangers of smoking, the Associated Press reported.

Philip Morris promised to appeal.

"A critical element was what the plaintiff knew about the health risks of smoking, and whether anything the company ever said or did improperly influenced her smoking decisions. The company believes the evidence was clear that Mrs. Bullock was aware of the risks and never relied, to her detriment, on anything the company said or did," said William Ohlemeyer, Philip Morris Cos. vice president and associate general counsel, said in a statement.

During the past decade, jury awards against tobacco companies, both in class action suits and suits filed by individuals such as Bullock have continued to grow, a fact that poses several ominous problems for large tobacco companies such as Philip Morris.

"Their appellate lawyers now have to be perfect in quite a few cases, and frankly seeing some of the developments at the trial level, we expect that most, if not all of these awards will withstand appellate review," Edward Sweda, senior attorney with the Tobacco Products Liability Project, based at Northeastern University School of Law in Boston, told the Associated Press.

New York-based Fitch Ratings, a credit rating agency, said this week that major tobacco companies could be put on review for possible credit downgrades if they lose such cases in the courtroom.

Fitch Ratings analyst Judi Malter, citing the $145 billion Engle judgment in Florida, said if the tobacco firms lose in the appeal process, Fitch may review their ratings for a downgrade, according to a Reuters news report.

The Engle case was the largest award in U.S. history. To date, domestic cigarette companies have never lost a case on appeal which resulted in a payout, Malter added.