Philip Morris USA said Thursday that it would ask the U.S. Supreme Court to reverse a California ruling that has brought the company a step closer to paying record damages to the widow of a deceased smoker.
The California Supreme Court refused Wednesday to hear an appeal of a $55.4-million judgment against the top U.S. cigarette maker, a unit of Altria Group Inc. In June 2001, Philip Morris was found guilty of negligence and fraud in a lawsuit filed by Topanga resident Richard Boeken, a former Marlboro smoker then afflicted with lung cancer who died a few months later at 57.
Unless the U.S. high court agrees to intervene, Philip Morris will have to pay the judgment, plus at least $20 million in interest, to his widow, Judy Boeken.
Although tobacco companies have agreed to pay major out-of-court settlements -- including about $246 billion to resolve litigation with the states -- they have paid barely a handful of judgments to individuals with smoking-related illnesses.
To date, $16.7 million is the most received by a successful plaintiff. Philip Morris paid the sum to Patricia Henley, 58, of Glendale in March, when the U.S. Supreme Court's refusal to review the case ended a seven-year legal battle. The Henley award consisted of $10.5 million in compensatory and punitive damages and about $6.2 million in interest.
Although far bigger, the Boeken judgment is a shadow of its former self.
In the first suit by a smoker ever tried in Los Angeles, a Superior Court jury stunned Philip Morris by awarding Boeken $3 billion in punitive damages on top of $5.54 million in compensatory damages. The trial judge, Charles W. McCoy Jr., shaved the punitive award to $100 million. Then in September -- in the ruling that the state Supreme Court has just declined to review -- a state appeals panel upheld the liability findings but cut punitive damages to $50 million.
In that ruling, the appeals court affirmed that Philip Morris had been guilty of "reprehensible conduct established by the evidence, repeated over four decades, and resulting in the death of Boeken."
Philip Morris executives declined to discuss the case Thursday. But the company filed papers asking the state appeals court to issue a stay allowing the company to delay paying the Boeken award while it seeks the Supreme Court review. If that request is rejected, the company will ask the justices for a temporary stay.
In the motion filed with the appeals court, Philip Morris said it would raise several issues with the justices, including whether the company was protected from liability by federally required warning labels on cigarette packs and whether the $50 million in punitive damages was "constitutionally excessive."
But the cigarette maker's prospects are uncertain at best because the Henley appeal raised similar issues and the justices declined to hear it.
The plaintiff and Philip Morris were both disappointed by Wednesday's refusal by the state Supreme Court to hear the Boeken appeal, said Boeken attorney Michael Piuze. Both sides had challenged the appellate court ruling.
Piuze had argued that the appeals court erred in cutting the award, saying it had misapplied a U.S. Supreme Court decision meant to limit punitive damages. That 2003 decision held that punitive damages typically should not exceed nine times the compensatory damages -- the exact ratio applied in the Boeken case.
But Piuze said this was a guideline, not a rule, that should have no bearing on Philip Morris, a company that Piuze said was responsible for hundreds of thousands of deaths.