Oregon court undoes $100 million tobacco judgment

PORTLAND, Ore. – A landmark jury award of $100 million in damages against Philip Morris was thrown out Wednesday by an appeals court, which ordered a new trial to reconsider damages against the tobacco manufacturer.

The narrow 5-4 ruling by the Oregon Court of Appeals upheld the jury’s verdict on fraud and negligence against Philip Morris, and left open only the question of how much money the company should pay to the estate of a former smoker.

The jury had awarded $150 million to the family of Michelle Schwarz of Salem, but a judge later reduced that amount to $100 million. Schwarz died of lung cancer in 1999 at age 53.

Chuck Tauman, a lawyer for the Schwarz family, said the case would be appealed to the Oregon Supreme Court, while a spokesman for the tobacco company said an appeal would be considered. The court decision Wednesday did not alter Philip Morris’ liability.

Tauman said the complex ruling rested on a very narrow technical question about whether the trial judge properly interpreted his duty to give the jury instructions requested by the tobacco company.

“The court mentioned there were 21 assignments of error that Philip Morris alleged were justified for reversal and they were successful on only one of them,” Tauman said.

Overall, he said, the appeals court affirmed the bulk of the ruling, adding support to other cases against Big Tobacco.

“When you look at the effect on public policy and other litigation, it was an overall win for the plaintiffs,” Tauman said.

The March 2002 verdict was the first such award in the nation based on claims that low-tar cigarettes led smokers to believe they were less dangerous than regular cigarettes.

The jury had agreed with lawyers for the Schwarz family, who claimed that Philip Morris fraudulently marketed its low-tar Merit brand as safer than regular cigarettes.

Multnomah County Circuit Judge Roosevelt Robinson found the $150 million award “grossly excessive” and reduced it by a third.

Tauman noted that Robinson, who died in 2004, had called the case one of the crowning achievements of his legal career.

If it survives appeal, the case will be returned to a different trial judge, and a different jury will be selected, Tauman said.