Court tosses punitive damages against Big Tobacco

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By Bill Mears

CNN Washington Bureau

WASHINGTON (CNN) -- Splitting 5-4, the U.S. Supreme Court on Tuesday threw out a nearly $80 million punitive damages ruling against Philip Morris.

The damages had been awarded in a suit brought by the family of an Oregon man who died from a smoking-related disease.

The case, Philip Morris USA v. Williams, tested the power of juries to impose large punitive awards against tobacco and other well-heeled corporations in product-liability cases.

In their ruling, the justices decided to follow recent precedent that punitive damages should, in most cases, match "actual" damages.

An Oregon jury had ruled in favor of the estate of building custodian Jesse Williams, who died in 1997 after having smoked as many as three packs per day for 47 years.

1999 award overturned

A jury awarded his estate $800,000 in compensatory damages in 1991 and almost 100 times that -- $79.5 million -- in punitive damages.

In arguments before the justices in October, a lawyer for Philip Morris USA argued that juries can punish a tobacco company by awarding damages to a smoker's widow but not to other smokers.

Attorney Andrew Frey argued that the family of a longtime smoker deserved compensation based only on individual harm, not harm to the public at large.

The justices had seemed torn over how to apply past precedents limiting punitive damages against Big Tobacco and other deep-pocketed corporations in product-liability cases to the case of Williams.

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