Bad Day for Big Tobacco

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Bad Day for Big Tobacco

NEW YORK -- A $150 million jury verdict against cigarette maker Philip Morris was upheld Wednesday by the Oregon Court of Appeals, which overturned a trial judge's ruling that the verdict was excessive.

An Associated Press report noted that a jury in 2002 ordered the tobacco company to pay $150 million in punitive damages to the estate of Michelle Schwarz, who died of lung cancer in 1999 at age 53.

But Multnomah County Circuit Judge Roosevelt Robinson found that amount "grossly excessive" and reduced it by a third to $100 million.

The appeals court, however, said the verdict complied with federal law and ordered Robinson to reinstate the full amount.

Philip Morris is a unit of New York-based Altria Group Inc.

Meanwhile, Florida attorney general Charlie Crist said Wednesday that cigarette maker Brown & Williamson owes the state $17 million as part of the landmark 1997 tobacco settlement after the company failed to report the sale of billions of cigarettes by a newly-created subsidiary, according to the AP.

Under the multibillion-dollar settlement, Brown & Williamson along with other manufacturers were to pay a lump sum of $550 million to the state and annual payments thereafter based on the volume of cigarette sales, Crist said in the motion filed in state court in Palm Beach County.

Brown & Williamson, operating under the name Star Tobacco & Pharmaceuticals Inc., failed to report the sales of 7 billion cigarettes and has refused to provide the state with documentation of the transactions, according to the motion. The filing seeks $17 million in back payments and a contempt of court fine.

"They've been making regular payments, but the payments were not up to what they should be," Crist said in the AP report. "We are asking the court to require this company to live up to its part of the bargain and stop shortchanging the citizens of this state."

R.J. Reynolds was combined with Brown & Williamson in 2004 to create Reynolds American Inc., the second-largest U.S. cigarette maker. Company officials in Winston-Salem, N.C., didn't immediately return a phone call seeking comment.

The settlement called for Philip Morris USA, R.J. Reynolds Co., Brown & Williamson and Lorillard Tobacco Co. to pay the state more than $13 billion over 25 years. To date, Florida has received more than $4 billion in payments, Crist said.