An Oregon appeals court overturned US$ 150-million in punitive damages against Altria Group's Philip Morris USA and sent the case back to a lower court for a new trial to determine the amount of the award.

The Oregon Court of Appeals ruled yesterday in a lawsuit filed by the husband of a pack-a-day smoker who died of lung cancer in 1999. The decision upheld US$ 169,000 in actual damages for the estate of the woman, Michelle Schwarz, and reversed the punitive damages, which were previously reduced to US$ 100-million by the trial judge.
"The environment is improving, with the number of pending individual tobacco suits crashing down," said Thomas Russo, who oversees almost US$ 3-billion at Lancaster, Pa-based Gardner Russo & Gardner, including about 3.7 million Altria shares on 31 December. "It would take a lot to get the trial bar back on their saddle in this area."
In its decision, the court, which is one level below the Oregon Supreme Court, ruled that the trial judge failed to tell jurors they could not punish Philip Morris for harm to smokers outside the state. The decision follows a ruling in February by the state's highest court upholding US$ 79.5-million in punitive damages for the widow of a smoker who died of cancer.
Philip Morris is "pleased" the Oregon appeals court reversed the punitive damages, vice-president and associate general counsel William S. Ohlemeyer said in a statement. The company is reviewing the decision and considering how to respond, Ohlemeyer said.
Altria hopes to resolve its legal difficulties so it can clear the way for a planned breakup that would make the company more valuable to shareholders. (pi)