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Supreme Court to Review Tobacco Award
October 30, 2006

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News Summary

The U.S. Supreme Court will decide whether a $79.5-million punitive-damages award against Philip Morris was justified based on the company's actions in marketing cigarettes, or excessively higher than the compensatory damages awarded in the case, USA Today reported Oct. 27.

An Oregon jury ordered the tobacco firm to pay the award to Mayola Williams, who sued the company for fraud and negligence after her husband, a longtime Marlboro smoker, died of lung cancer in 1997. The punitive damages were 97 times higher than the compensatory damages awarded to Williams; the jury said that Philip Morris should be punished harshly to deter the company from repeating its deception in the future.

The tobacco company has appealed the award all the way to the Supreme Court, arguing that the punitive-damages award is excessive and violates the due-process guarantees of the 14th Amendment to the Constitution. Business groups like the National Association of Manufacturers also say that the courts should not allow juries to grant big awards to "send a message" to errant companies.

The high court will hear arguments in the case this week, and observers are curious about how the addition of Chief Justice John Roberts and Justice Samuel Alito will affect the court's decisionmaking. In recent years, the court has ruled that punitive damage awards more than 10 times compensatory damages could be presumed to be excessive.

The Oregon Supreme Court previously upheld the award to Williams. "There can be no dispute that Philip Morris's conduct was extraordinarily reprehensible," the court ruled. "(It) knew that smoking caused serious and sometimes fatal disease, but it nevertheless spread false or misleading information to suggest ... that doubts remained about that issue. ... The scheme was damaging the health of a very large group of Oregonians -- the smoking public -- and was killing a number of that group." 

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