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A massive $150 million punitive jury verdict in Portland, Ore., against Philip Morris Cos. Inc. to the estate of a smoker who died of lung cancer may be a harbinger of a new wave of judgments against the tobacco industry. The recent verdict included $115 million in punitives on the plaintiff’s charge that Philip Morris had committed fraud in its marketing of “light” cigarettes. This judgment was the first in the nation where a jury has specifically found a tobacco company made, in the words of the jury verdict form, “false representations that ‘low tar’ cigarettes delivered less tar and nicotine to the smoker and were therefore safer and healthier than regular cigarettes.” Michelle Schwarz began smoking when she was 18 years old and switched to Merit, a lighter-tar cigarette made by Philip Morris in 1976. Schwarz was diagnosed with lung cancer in February 1998 and, despite treatment, died on July 13, 1999. She was 53. Her estate sued Philip Morris, contending that the product caused her death. The causes of action included the traditional charges of negligence and product defects — and fraud. The plaintiff contended that Philip Morris “had knowingly marketed a false pretense, that a smoker could reduce the health risks by switching to a low-tar cigarette,” said plaintiffs’ attorney Charles S. Tauman of Portland’s Bennett, Harman, Morris & Kaplan. The company did not specifically say in its advertising that the cigarette was safer, he said, but did indicate that “by switching, a smoker could reduce the number of milligrams of toxin that comes into your body.” Philip Morris’ ads included referrals to FTC smoking-machine tests that Merit delivered 8 milligrams of tar, or about half that of regular cigarettes. The plaintiff contended that Philip Morris knew these tests were misleading and that the cigarette “delivers double that amount,” or about the same amount as other cigarettes, Tauman said. By using the numbers, he said, the ads gave a “scientific” cachet to the lower-tar delivery claims. The Portland jury agreed, awarding $168,000 in compensatory damages and $150 million in punitives, including $115 million on the fraud claim. Schwarz v. Philip Morris Inc., No. 0002-01376 (Mulnomah Co., Ore., Cir. Ct.). After the verdict, Philip Morris announced that it was inconsistent with the law and with the facts of the case. The company had not advertised its light cigarettes as “safe, safer or less hazardous,” said William S. Ohlemeyer, vice president and associate general counsel. “The company didn’t promote these as less hazardous,” he said, though the federal government and medical community did. Ohlemeyer said the industry never hid its disdain for the smoking-machine tests on the amounts of tar delivered. “When the FTC proposed these tests in 1966, Philip Morris said publicly that they were going to mislead people.” He said the plaintiffs’ claim is barred by law because of the warning label on all cigarette packs. Philip Morris never sold a light cigarette before 1969, he noted, three years after the warning labels were introduced. The judge in the most recent trial, he said, “did not instruct the jury properly on the pre-emptive nature of the labeling.” Plaintiffs’ attorneys currently suing the industry say that the decision points to what one called the Achilles’ heel of the tobacco industry. “The industry’s defense has always been that they’ve tried to make smoking safer by making cigarettes with lower tar,” said Stephen Sheller of Philadelphia’s Sheller, Ludwig & Badey. “Now we know these cigarettes are worse for you.” The claim against “light” cigarettes, he said, also trumps another salient industry defense, “that it’s the smoker’s fault.” Sheller, who has filed several deceptive trade practices actions against the industry over “light” cigarettes, did not represent the plaintiff in the Portland case but provided documents to the plaintiffs. Philip Morris will appeal and expects to succeed, Ohlemyer said.

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