The United States Supreme Court allowed an $80 million dollar punitive damages
award alone to be upheld in essence requiring Phillip Morris to pay the award. The case involved a deceased smoker and was awarded to his widow. The litigation lasted ten years and started in 1999 when a jury in Oregon held that Philip Morris was liable for misleading her husband that cigarettes were not harmful, nor addictive. The $80 million award doubled to $150 million because of all the appeals and delays of Philip Morris.
Just how foolish are these juries?
We've all heard about the woman awarded "millions" just for spilling coffee on herself. But how many people know the actual facts of the case: That McDonald's brewed its coffee about 20 degrees hotter than anyone else,despite the risk of spilling as customers fumbled with their cups while in the drive through lane? That this scalding coffee could cause third degree burns in just a few seconds? That several hundred other customers had suffered burn injuries before this one? How many people know that the 81 year old woman suffered third degree burns requiring skin grafts? How many people know that the attorneys for McDonald's refused a request to settle just for the payment of her medical bills? Did you know that the judge reduced the award more than 80% from $2.9 million to $480,000? I'm sure you read the front page article regarding the $2.8 million award, but how many of you read the newspaper( if anyone reported it) when the judge cut it back to $480,000? Most people do not know the whole story. So the moral of this story is don't make any opinions on any case UNLESS you know all of the facts. Just like in this tobacco case.
The case was appealed to the Court on two previous occasions where it was returned to the Oregon Supreme Court who left the verdict stand. The decision to leave the award alone by the Supreme Court, indirectly states that in some cases such an award is justified. Of course, if Philip Morris had paid the award back in 1999, then Philip Morris would not owe any additional money,i.e., the extra $70 million that was incurred in interest over the ten year period, but they chose not to.
Punitive damages are awarded to discourage companies from reprehensible conduct
. Reprehensibility is the most important factor in judging the reasonableness of a punitive award. The Oregon Court expressed outrage at Philip Morris's conduct. This is the third time that the United States Supreme Court has passed on deciding that the award was too high which should send a message to big business.
As a footnote, under Oregon law, 60% of the money must go to the state. Philip Morris is refusing to pay the money to the state. Go figure. Sounds like someone may have another claim for punitive damages. When will they ever learn?
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