Tobacco trial judge rules $3 billion punitive damages excessive, suggests $100 million

By Cadonna M. Peyton Associated Press Writer
Saturday August 11, 2001

LOS ANGELES – A judge rejected a record $3 billion damage award against tobacco giant Philip Morris as excessive, offering a dying smoker $100 million instead. 

Thursday’s ruling by Superior Court Judge Charles W. McCoy Jr. left both sides unhappy and the tobacco giant promising an appeal. 

McCoy denounced Philip Morris’ actions as “reprehensible in every sense of the word, both legal and moral.” 

The firm “refused to accept even a scintilla of responsibility for the harm it has done.” the judge wrote in a 27-page ruling. 

But the punitive damages a jury granted to Richard Boeken in June were far above the usual ratio, he ruled. 

In fact, it was the largest award in an individual lawsuit against a tobacco company. 

Boeken was given until Aug. 24 to agree in writing to accept $100 million or the judge said he will grant Philip Morris a retrial on the punitive damages. The judge upheld an additional $5.54 million in compensatory damages for Boeken’s medical expenses and lost earnings. 

Boeken’s attorney, Michael J. Piuze, said “we are grateful for having been afforded a fair trial” but disagreed with the judge’s decision to reduce punitive damages. 

“Philip Morris was fined one week’s earnings,” he said. “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. 

“I think it would have been more productive for society to let the verdict stand,” he added. 

Philip Morris said the entire case would be appealed. 

“This case became an exercise in punishing an unpopular industry,” William S. Ohlemeyer, company vice president and associate general counsel, said in a statement. 

“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.” 

Boeken, 56, of Topanga, has lung cancer that has spread to his brain. The lifelong smoker claimed in his lawsuit that he was the victim of a tobacco industry campaign that portrayed smoking as “cool” but concealed its dangers. 

A jury found the company guilty of negligence, misrepresentation, fraud and selling a defective product. 

McCoy strongly supported the jury’s motivation for the punitive award but found the sum “legally excessive.” The ratio of the punitive damages to compensatory damages was 540-1. The $100 million figure — four times what Philip Morris lawyers had recommended — would reduce the ratio to 18-1. 

McCoy also reprimanded Philip Morris for going to “extraordinary lengths to hide its own scientific information” about the health risks of smoking. 

“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,” the judge ruled. 

It was the second California case in which a judge reduced a damage award against Philip Morris. A $51.5 million award made to lung cancer victim Patricia Henley in 1999 by a San Francisco jury was later reduced to $26.5 million. The case is under appeal. 

Last year, another San Francisco jury awarded Leslie Whiteley $21.7 million in damages against Philip Morris and R.J. Reynolds Tobacco Co. Whiteley, who had lung cancer, has since died. That case also remains on appeal. 

In seeking a retrial of the Boeken case, the company argued that it will likely face similar cases and could not pay $3 billion to every plaintiff. 

Philip Morris also argued that the judge erred in refusing to allow the company to present evidence of Boeken’s past criminal convictions in order to challenge the credibility of his claims. 

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 13 and smoked at least two packs of Marlboros daily for more than 40 years.  

His attorney said Boeken was actaully 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.