Family of Smoker Awarded $80 Million by Oregon Jury

Tobacco giant Philip Morris on Tuesday suffered a second straight devastating loss in a lung cancer case, a record-breaking $80-million jury verdict in Portland, Ore., that is sure to spawn a flood of new claims against embattled cigarette makers.

The award to a Marlboro smoker’s family tops last month’s $51.5-million verdict in San Francisco in another case involving a lung cancer victim who smoked Marlboro.

The consecutive huge defeats suggest a sea change in juror attitudes toward the tobacco industry that have been hardened by disclosures of internal documents appearing to show that tobacco companies lied for decades about the hazards and addictiveness of smoking.

In both victories, plaintiffs’ lawyers shredded the defense that had, in effect, shielded cigarette makers throughout four decades of litigation--namely, that people make their own decisions to smoke and are stuck with the consequences of that choice. In these latest cases, plaintiffs clearly got jurors to look past the behavior of smokers to the conduct of the industry.

The Oregon case was filed by Joann Williams-Branch, the daughter of Jesse D. Williams, a former custodian for the Portland public schools who smoked for more than 40 years and died of lung cancer in 1997 at the age of 67. The jury of six men and six women deliberated 2 1/2 days at the end of a monthlong trial in Multnomah County Circuit Court. It was the first smoking and health case ever tried in Oregon.

“We are very gratified that the jury accepted the proposition that Philip Morris has been withholding information and making misrepresentations for the last half-century,� said Charles S. Taumann, a lawyer for Williams-Branch.

“We’re disappointed, but we . . . believe that this verdict will be reversed,� said John J. Mulderig, associate general counsel for Philip Morris. The result “reflects an emotional position on the part of the jury not based on the evidence,� he said.

In the San Francisco case, Philip Morris was ordered to pay compensatory and punitive damages to Patricia Henley, a Los Angeles woman diagnosed with cancer last year. Given that city’s reputation as being unconventional, the verdict--in which jurors awarded more than three times the amount Henley’s lawyers had requested--might have been seen as an aberration. Such a result in Portland, a more mainstream city, will be harder to dismiss.

For industry leader Philip Morris, the $80-million award amounts to less than a couple of days of cigarette sales. Still, for the firm and its smaller rivals, the implications are ominous.

Health authorities say more than 400,000 Americans die each year of smoking-related ailments and that hundreds of thousands more suffer health problems linked to smoking. All of these people are potential plaintiffs, and if just a small fraction sued--and a small fraction of those were to win--the industry could be overwhelmed.

“A limited number of verdicts are no problem at all, but if these are harbingers of large numbers of verdicts, then that’s disaster for the industry,� said Gary T. Schwartz, a professor and expert in tort law at UCLA.

Richard Daynard, a Northeastern University law professor and founder of the Tobacco Products Liability Project, which promotes lawsuits against the industry, noted Tuesday that the demise of asbestos companies began when juries, angered by disclosures in internal documents, started hitting them with punitive damages.

“I think they [the tobacco companies] are not going to be able to stop the flood,� Daynard said.

The Portland verdict came on the heels of some positive legal news for the industry. A jury in Akron, Ohio, recently found tobacco companies not liable in a major class-action suit brought by labor union welfare funds seeking recovery of smoking-related health-care costs. And on Monday, a federal appeals court upheld a lower court’s decision to dismiss a similar class-action suit on behalf of Pennsylvania labor trust funds.

But Philip Morris shares plunged 9% on news of the Portland verdict, falling $3.44 to close at $37.75. Other tobacco shares also slid, but less dramatically, on the New York Stock Exchange. RJR Nabisco fell $1.19 to $27.75, and Loews, owner of cigarette maker Lorillard Tobacco, sank $2.69 to $78.56. BAT, parent of Brown & Williamson Tobacco, rose 6 cents to $18.06 on the American Stock Exchange.

The jury found Philip Morris guilty of negligence and misrepresentation, a verdict that will result in $521,485 in compensatory and $79.5 million in punitive damages. The jury actually awarded about $81 million, but under state law the compensatory portion will be trimmed. The panel found the company negligent on an 11-1 vote and split 9 to 3 on the misrepresentation count. The punitive damages verdict also came on a 9-3 vote.

Putting aside their traditional defiance, tobacco companies recently have struck major out-of-court settlements. They agreed to pay the states $246 billion over 25 years to reimburse smoking-related health-care costs and to pay $349 million to settle a class-action suit by flight attendants over the effects of secondhand smoke.

But up to now, they haven’t had to pay a nickel to an individual plaintiff in a smoking and health case. However, there have been several recent signs that the industry’s brilliant courtroom record was coming to an end.

The Portland and San Francisco verdicts mean that in four of the last six trials of suits by individual smokers, juries have found for the plaintiffs. In 1996 in Florida, a jury ordered Brown & Williamson to pay $750,000 to lung cancer sufferer Grady Carter, and in 1998 another Florida jury hit B&W; with a $1-million damage award.

Both those results were later overturned on appeal. In two other Florida cases, defendant R.J. Reynolds was found not liable. Several hundred more claims by individual smokers against tobacco companies are pending in courts across the country.

Lawyers for Philip Morris said they will ask Multnomah County Circuit Judge Anna J. Brown to set aside the verdict or reduce the damage award. Barring success in those efforts, they said, they will appeal.