Calif. jury ponders punitive damages vs. tobacco co's
SAN FRANCISCO, March 21 (Reuters) - A California jury headed back to court Tuesday to deliberate possible punitive damages against two major tobacco companies one day after they awarded $1.7 million to a woman who developed lung cancer after smoking for 2
The Superior Court jury's verdict Monday against Philip Morris Cos Inc. and R.J. Reynolds Tobacco Holdings Inc. was the latest blow against the embattled tobacco industry, which has faced a string of consumer lawsuits in recent years.
It is also the first to find cigarette makers responsible for the health of people who took up smoking after the surgeon general required warning labels on all cigarette packages in 1965 -- demolishing a key tobacco industry defense against court action by former smokers.
``This really reflects a total collapse of the industry's ability to defend itself in court,'' Richard Daynard, a professor at Northwestern University and head of a research project on the tobacco industry, told the San Francisco Chronicle after Monday's late verdict.
Both Philip Morris and R.J. Reynolds declined to comment on the verdicts, saying it was inappropriate to discuss the case while it was still underway.
In the case, Leslie Whiteley sued the cigarette makers after being diagnosed with lung cancer. The 40-year-old mother of four from Ojai, Calif., began smoking at age 13 and did not quit until her cancer diagnosis in 1998.
Whiteley also smoked marijuana, which tobacco industry lawyers argued was the chief cause of her cancer.
But in its verdict, the 12-member Superior Court jury found that the tobacco companies acted with malice, knew about the health hazards of smoking and deliberately misled the public about those dangers. It also found that the two companies committed fraud.
The decision awarded Whiteley $1.47 million for medical costs and pain and suffering, and awarded her husband Leonard $250,000 for loss of companionship.
Jurors now must begin hearing evidence on possible punitive damages, which could lead to a far larger award against the tobacco companies.
Credit Suisse First Boston tobacco analyst Bonnie Herzog said the current set of deliberations were expected to last for several days, with no decision expected before Friday.
``Given the pro-plaintiff answers to the special verdict form questions, we believe the punitive damage amount could be substantial,'' Herzog said in a research note.
``Although we expect Philip Morris and R.J. Reynolds to appeal this verdict, we are not confident that it will be overturned considering there is nothing significant that occurred during the trial that highlights the companies have a strong case for appeal,'' she said.
The Whiteley case is the first California case by an individual smoker to go to trial since a San Francisco jury last year awarded $51 million to Patricia Henley, a smoker who sued Philip Morris after developing lung cancer.
The judge later cut that award to $26 million, and the case is now on appeal. Shortly after the Henley verdict, an Oregon jury awarded $81 million to the family of a smoker of Philip Morris' Marlboro cigarettes, an award which was later cut to $32 million.
The San Francisco jury returned its verdict after the close of trading on the New York Stock Exchange Monday. On Tuesday, Philip Morris and RJR both faced some early trading pressure, although appeared to recover following a U.S. Supreme Court decision which found that the U.S Food and Drug Administration lacked the power to regulate tobacco products.