Philip Morris Won't Pay State's Share In Tobacco Damages
AP
Date: 05/19/99 4:31am Eastern
By The Associated Press
PORTLAND, Ore. (AP) -- Oregon could be gearing up for a show down
with tobacco giant Philip Morris, which says it won't pay the state's
share of $32 million in damages slapped against the company by an
Oregon court.
At issue is the fate of $19.2 million, part of a $32-million
punitive-damages award granted to the family of Jessie D. Williams, a
Portland resident and longtime Marlboro smoker who died of lung
cancer.
A Multnomah County Circuit Court jury awarded the family $79.5
million in punitive damages against Philip Morris on March 30,
deciding that the cigarette-maker had lied for decades about the link
between smoking and cancer.
On Thursday, Judge Anna J. Brown reduced the amount to $32 million,
ruling that anything larger would violate constitutional guarantees
against excessive punishment.
Under Oregon law, 60% of punitive damage awards goes to a
state fund for crime victim compensation, meaning that Oregon would
be a pull down $19.2 million, if the award withstands the tobacco
company's planned appeal.
Now, the tobacco company is challenging the notion that it has to pay
any punitive damages to the state. In a letter to Oregon Attorney
General Hardy Myers, company attorneys wrote that a multistate
settlement against tobacco companies excuses Philip Morris from
paying the punitive damages to the state.
In November, Oregon joined a nationwide settlement orchestrated by
state attorneys general in which the tobacco industry agreed to pay
the costs of medical treatment for smokers whose health benefits are
covered by the Medicaid system, health insurance for low-income
people.
Under that agreement, Oregon is to receive $2.l billion during the
first 25 years and then about $81 million a year in perpetuity.
Still, the state says it will stand tough against Philip Morris'
refusal to pay in the Williams' lawsuit.
"We will be litigating that," said Kristen Grainger, executive
assistant to Myers. "We could possibly use the same court and judge.
We're now evaluating our options."
Neither Grainger nor Philip Morris attorney Gergory Little would
comment in detail about the looming legal battle, but Little did say
that the company was pleased that Brown reduced the award last week.
"We believe that the reduction was certainly a step in the right
direction, and we're pleased that the punitive damages was
dramatically reduced... and ultimately should be set aside in its
entirety," he said.
The Williams family, on the other hand, hopes the entire judgment
will be reinstated on appeal. In a statement written on behalf of the
family, attorneys said they "emphatically disagree with the court's
conclusion that the award was in any way excessive."
After the trial two jurors said they were angered by Philip Morris
documents that showed the company knew about the disease-causing
properties of cigarettes but continually denied the link between
cancer and smoking.