Judge rules $3 billion tobacco fine excessive

The Associated Press
Friday August 10, 2001

LOS ANGELES — A judge ruled Thursday that a $3 billion punitive damages verdict against tobacco giant Philip Morris was excessive but he will only grant a retrial of the punitive issue if the cancer-stricken plaintiff won’t accept $100 million instead. 

Superior Court Judge Charles W. McCoy ruled on a motion by the company which argued, among various reasons, that the punitive award was excessive and that it will likely face similar cases and could not pay $3 billion to every plaintiff. 

In June a jury awarded Richard Boeken, 56, the multibillion-dollar punitive award in addition to $5.5 million in compensatory damages. It was the largest award in an individual lawsuit against a tobacco company. Boeken, a lifelong smoker whose lung cancer has spread, claimed in his lawsuit that he was the victim of a tobacco industry campaign that portrayed smoking as “cool” but concealed its dangers. Boeken would have to file a written consent to the reduction by Aug. 24 or Philip Morris will be granted a retrial “solely on the issue of punitive damages,” the judge wrote. 

Boeken’s attorney, Michael J. Piuze, said “we are grateful for having been afforded a fair trial” but indicated Boeken wouldn’t accept the reduced judgment. 

“Philip Morris was fined one week’s earnings. This is the same as a $1,000 fine against a $50,000-a-year wage earner. Philip Morris truly was not punished enough. The punishment did not fit the crime,” he said. 

William S. Ohlemeyer, Philip Morris’s vice president and associate general counsel, said the company will appeal. 

“This case became an exercise in punishing an unpopular industry,” he said. “Our appeal will request a complete reversal and retrial on multiple grounds, not the least of which was the passion and prejudice the jury displayed in reaching its verdict.” 

“It’s simply not believable that anyone living in America for the past 40 years could testify under oath that they were unaware of the risks of smoking.” 

In a 27-page ruling, McCoy strongly supported the jury’s motivation even though he found the $3 billion sum “legally excessive because it produced an excessive punitive-to-compensatory ratio.” 

“The jury plainly, and with substantial evidentiary support, found Philip Morris’ conduct reprehensible,” the judge wrote. “The record fully supports findings that Philip Morris knew by the late 1950s and early 1960s that the nicotine in cigarettes is highly addictive, that substances in cigarette tar cause lung cancer, and that no substantial medical or scientific doubt existed on these crucial facts.” 

He said the court’s independent judgment was that a $100 million punitive award was “reasonable.” 

Tom Harrison, publisher of Lawyers Weekly USA, said he expected the damages to be reduced but was still surprised by the $100 million sum. 

“It’s staggering,” he said. “It’s far, far, far more than any other punitive award that has been upheld on appeal in California. Philip Morris will obviously appeal ... and try to get the punitive damages reduced any further.” 

Harrison said that the decision hurts the tobacco company in the court of public opinion and it also makes it harder to fight. 

“When you have a judge say this conduct is worth $100 million in punitive damages it is harder to minimize,” he said. “It’s easy to criticize a runaway jury it’s harder to criticize ’runaway’ judge.” 

McCoy, the trial judge, also denied a Philip Morris motion that asked for a new trial on grounds that he erred in refusing to allow the company to present evidence of Boeken’s past criminal convictions in order to challenge the credibility of his claim that he believed smoking was safe. 

In the 1970s Boeken was convicted of a felony involving stolen property and another one for possession of a small amount of heroin. 

In 1993, he pleaded guilty to a federal charge of aiding and abetting wire fraud involving a telephone boiler room operation that sold oil and gas properties from 1986 to 1988 in Wyoming. Boeken testified for the government in the prosecution of his former boss, pleaded guilty to the felony and was ordered to pay a fine and $50,000 restitution. 

McCoy ruled during the trial that Boeken’s criminal record was irrelevant to the tobacco lawsuit and could prejudice the jury. 

Boeken said he took up cigarettes at age 13 and smoked at least two packs of Marlboros daily for more than 40 years. His attorney said Boeken was able to kick heroin and alcohol, but renewed his smoking habit after trying to quit several times. 

Boeken was diagnosed in 1999 with lung cancer, which spread to his lymph nodes, back and brain. Boeken quit smoking for eight months after being diagnosed but later resumed smoking Marlboros.