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A judge ruled Thursday that a jury's $3 billion verdict against Philip Morris was excessive but the tobacco giant will get a retrial only if the cancer-stricken plaintiff won't accept a settlement of $100 million.
Los Angeles County Superior Court Judge Charles McCoy ruled on a motion by the company arguing that the punitive award was excessive and that the company will likely face similar cases and could not pay $3 billion to every plaintiff.
Shortly after the decision was rendered, New York-based Philip Morris U.S.A., maker of cigarette brands such as Marlboro, Merit and Virginia Slims, said it would mount an aggressive appeal challenging McCoy's refusal today to overturn the jury's $3 billion punitive damage award to Richard Boeken.
Despite the significant reduction, Philip Morris called the $100 million amount "grossly excessive and both unprecedented and unconstitutional under California and federal law."
"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," said William Ohlemeyer, Philip Morris vice president and associate general counsel.
Ohlemeyer noted that the additional grounds requiring reversal or a new trial include the court's improper exclusion of evidence relating to Boeken's credibility, improper admission of evidence associated to the adequacy of the health warnings mandated by federal law, and erroneous instruction of the jury on key issues.
In the 1970s Boeken was convicted of two felonies involving stolen property and 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 against former boss, pleaded guilty to the felony and was ordered to pay a fine and $50,000 restitution.
However, McCoy ruled during the trial that Boeken's criminal record was irrelevant to the tobacco lawsuit and could prejudice the jury.
McCoy denied the company's motion for a new trial except with respect to the excessiveness of the punitive damages award. With respect to the issue of excessive punitive damages, Judge McCoy granted the motion unless the plaintiff accepts the reduced award by Aug. 24. If Boeken rejects the $100 million award, a new trial will be granted solely on the issue of punitive damages.
In June, a jury awarded Boeken 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 with lung cancer, claimed in his lawsuit that he was the victim of a tobacco industry campaign that portrayed smoking as "cool" but concealed its dangers.
McCoy said he supported the jury's thinking, but found the $3 billion sum "legally excessive." The $100-million punitive award is "reasonable," he added
McCoy, the trial judge, also denied a Philip Morris motion asking for a new trial on grounds that he erred in refusing to allow the company to present evidence of Boeken's past criminal convictions. The convictions, the company contended, challenged the credibility of his claim that he believed smoking was safe.