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Cancer victim Richard Boeken decided three years ago that he could settle for $100 million in punitive damages in a suit against tobacco giant Philip Morris USA Inc. But his heirs may not be satisfied with half that amount. On Tuesday, Los Angeles’ Second District Court of Appeal, Division Four, ruled that it would grant Philip Morris a new trial on punitive damages unless Boeken’s survivors agree to yet another reduction in a judgment that originally stood at a nationwide record of $3 billion in 2001. “We are satisfied,” Justice J. Gary Hastings wrote, “that the reprehensible conduct established by the evidence, repeated over four decades, and resulting in the death of Boeken, justifies the highest single-digit ratio that will satisfy due process while furthering California’s policy of punishment and deterrence.” Acting Presiding Justice Norman Epstein and Justice Daniel Curry concurred. The reduction would slice the punitive award from 18 times the $5.5 million in compensatory damages to a ratio of 9-1, the outer limit suggested by the U.S. Supreme Court in 2003′s State Farm Mutual Automobile Insurance v. Campbell, 538 U.S. 408. Los Angeles lawyer Michael Piuze, who represents the Boeken family, said he was disappointed with the ruling and would seek review with the California Supreme Court rather than immediately agree to the Second District’s demand. “$50 million is less than four days’ profit for Philip Morris,” he said in a prepared statement. “This fine will not punish it or deter its future conduct that imperils the health and lives of our citizens.” The court agreed that the defendant’s wealth could be taken into account when deciding the ratio between compensatory and punitive damages. Boeken, a securities dealer, accepted similar terms in 2001 when L.A. County Superior Court Judge Charles McCoy Jr. threatened to grant a new trial unless the original judgment was reduced by $2.9 billion. At trial, jurors found that Boeken had taken up smoking at age 14, had favored Philip Morris’ Marlboros and Marlboro Lights, and had smoked two packs a day for 43 years. He claimed that the company had misled him and other consumers about the safety dangers for years. Boeken eventually contracted lung cancer, which spread to his brain and spine. He died in 2002 and was replaced in the appeal by his trustee, Judy Boeken. The appeal court justices based their decision Tuesday not only on the U.S. Supreme Court’s ruling in State Farm, but also its 1996 ruling in BMW of North America v. Gore, 517 U.S. 559. But even though the justices agreed that $100 million was too high, much of their 75-page ruling lashed out at Philip Morris, saying the company deserved a large punitive hit. “The evidence supports the conclusion that the harms caused to Boeken by Philip Morris’ fraud and defective product were physical, not merely economic,” the court held. “And Philip Morris’ conduct was repeated over a period of almost 50 years with an indifference to the health or safety of Boeken, a physically and psychologically vulnerable target.” The company, the justices noted, was still marketing light cigarettes — fraudulently advertised to be safer than regular cigarettes — at the time of trial. “Philip Morris acted with a conscious disregard of consumer health and safety in the manufacture and marketing of a dangerous product,” the court ruled, “and intentionally took advantage of the consumer expectation that ‘light’ cigarettes were safer.” Philip Morris’ lawyers, Arnold & Porter partners John Carlton and Murray Garnick, of Los Angeles and Washington, D.C., respectively, couldn’t be reached for comment. The ruling is Boeken v. Philip Morris, B152959. The full text of the decision will appear in Thursday’s California Daily Opinion Service.

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