March 22, 2005 - High Court turns away Philip Morris

The U.S. Supreme Court refused to hear an appeal by Philip Morris of a $16 million award to a smoker who contracted lung cancer.

The court's refusal to review the case was the last gasp for Altria Group Inc.'s Philip Morris, which had been fighting for six years to overturn the damages award to Patricia Henley.

Henley was diagnosed with lung cancer in 1998 after more than 30 years as a Marlboro smoker. In February 1999, a jury in San Francisco Superior Court decreed that the company had lied about the risks and addictiveness of smoking and was responsible for Henley's cancer, and awarded her $51.5 million.

Although the award eventually was reduced to $10.5 million, Philip Morris will have to write a check for $16.7 million because of interest accrued during the years of appeals. Henley, 58, said she planned to give most of the money to a foundation to teach children about the ills of smoking and treat kids with respiratory ailments and cancer.

"This is a good day for the children," said Henley, who had long complained that her case would never end. "This is punishment money from the tobacco industry, but it needs to be turned into money that's going to help people."

Henley's original jury award was three times what she had asked for. But the victory was just the beginning of an endurance contest. The case pingponged through the legal system, three times going back and forth between the state Court of Appeal and the California Supreme Court to resolve various issues.

Along the way, the original award was reduced twice -- first to $26.5 million, then to $10.5 million. But the state Supreme Court in September refused Philip Morris' request to overturn the liability finding, prompting the company to seek a reprieve from the U.S. Supreme Court.
 
Over the years, cigarette makers have lost in the trial court about 20 times, but most of these defeats are in various stages of appeal or have been reversed.

Henley is to become only the fourth individual smoker, and the first from California, to collect a damages award. In the other three cases, tobacco companies paid compensatory damage of $196,000 to more than $3.4 million to three Florida smokers.
 
Henley’s award would be the largest payment and the first punitive damages ever paid to an individual smoker.

Henley's $10.5-million award consisted of $1.5 million in compensatory and $9 million in punitive damages. After the trial judge had cut the jury's original punitive damages award to $25 million from $50 million, appellate judges reduced it further to conform with a 2003 ruling by the U.S. Supreme Court that punitive damages generally should be no more than nine times the compensatory award.

Henley said Monday that after paying taxes and legal fees, she would keep the compensatory damages to live on and donate the rest to the Patricia Henley Foundation, based in Santa Barbara.
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