Philip Morris Loses Appeal


A California appeals court upheld a $26.5 million damage award against Philip Morris Cos., rejecting the number-one tobacco company's arguments that the award is excessive.
New York-based Philip Morris will appeal the case to California's Supreme Court, it said in a statement.

The award to longtime Marlboro smoker Patricia Henley isn't excessive by constitutional standards, the court said. The 1999 verdict was the first in a series of victories plaintiffs won against tobacco companies on the West Coast, and may signal how other multimillion awards will fare on appeal.

"We agree with the jury and the trial court that only a very substantial award was sufficient to reflect the moral opprobrium in which defendant's conduct can and should be held," said Justice Patricia Sepulveda, writing for the three-judge panel.

Jurors awarded Henley $1.5 million in compensatory damages and $50 million in punitive damages in 1999 on her claims that Philip Morris misled consumers about the health risks of smoking. Superior Court Judge John Munter later cut the total award to $26.5 million.

The reduction left Philip Morris with a punitive bill 17 times greater than the compensatory damage award. The U.S. Supreme court has ruled that punitive awards must be based on appropriate evidence and be rationally related to compensatory damages, Philip Morris's lawyers argued.
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