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CALIFORNIA JUDGE REDUCES AMOUNT OF PUNITIVE DAMAGES
FOR IMMEDIATE RELEASE Contact: Richard A. Daynard August 9, 2001 Edward L. Sweda, Jr. or Mark Gottlieb
617-373-2026
Judge Charles W. McCoy of Los Angeles Superior Court today issued his rulings on several motions filed by tobacco giant Philip Morris in the wake of its devastating courtroom defeat on June 6 when a jury awarded lung cancer victim Richard Boeken $5.54 million in compensatory and $3 billion in punitive damages.
Judge McCoy rejected Philip Morris' attempt to throw out the jury's historic verdict. Philip Morris had asked the judge to reverse the jury's verdict or to declare a mistrial.
As expected, Judge McCoy reduced the amount of punitive damages from the $3 billion awarded by the jury. The award was lowered to $100 million. This is the fourth recent trial to result in significant punitive sanctions against tobacco companies in the past three years. Last year's $145 billion punitive damages award in a Florida class action was far and away the largest punitive damages award in the history of U.S. litigation. Other juries in cases on behalf of individuals have awarded $50 million (reduced by the trial judge to $25 million), $71.5 million (reduced by the trial judge to $32 million) and $20 million.
Northeastern University School of Law Professor Richard A. Daynard, who also is the chair of the Tobacco Products Liability Project, noted what Philip Morris admitted in its Motion for a New Trial, viz., that 'the inevitable result of any sizeable punitive award in this case will be a race to the courthouse by prospective plaintiffs.' The $100 million in punitive damages in the Boeken case remains a powerful testament to the jury's justifiable anger at Philip Morris' long history of corporate wrongdoing.
"As plaintiffs' attorneys have learned how to use effectively internal tobacco industry documents and expert witnesses to prove that the companies engaged in deceptive and negligent conduct without regard to the health of their customers, the cost of getting tobacco cases to trial is rapidly dropping and juries are increasingly siding with the victims. Plaintiffs have achieved a 30% success rate for individual claims reaching trial since 1999, a rate that is more than sufficient to encourage first-rate attorneys to bring these cases in the future," Daynard added.
"The purpose of punitive damages is to make sure that crime, or other outrageous misconduct, does not pay. Even the original $3 billion punitive damage award was -- as Boeken's brief pointed out -- 'just 10% of the total amount Philip Morris voluntarily agreed to pay [but never did] in total punitive damages for its pre-1997 conduct.' Prof. Daynard called the $100 million figure "a good start -- but only a start -- in disgorging from PM its ill-gotten gains." Indeed, since Philip Morris earns $14.7 million in net profits each day, it can pay off the entire award in 6.8 days. Boeken's brief also noted that "Philip Morris has earned $96.57 billion since 1954 (in 2000 dollars) while pursuing its fraudulent business scheme disguised to preserve and extend its tobacco franchise." The $100 million punitive damage award is 0.1% of that amount.
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