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Press release from Business Wire

Philip Morris USA Says Oregon Supreme Court Rejects Damage Award

Thursday, June 24, 2010

Philip Morris USA Says Oregon Supreme Court Rejects Damage Award12:41 EDT Thursday, June 24, 2010 RICHMOND, Va. (Business Wire) -- The Oregon Supreme Court today affirmed a lower court's order setting aside a $100 million punitive damages award in a personal injury case brought by an individual smoker. The Court held that, as a result of constitutional violations at trial, Philip Morris USA (PM USA) was entitled to a new trial on the issue of punitive damages. “We believe the Oregon Supreme Court's ruling properly recognized the constitutional limits in assessing punitive damages,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of PM USA. “The Oregon Supreme Court correctly held that the trial court violated the U.S. Constitution by allowing the jury to impose punitive damages to punish for harm to non-parties,” said Garnick. The United States Supreme Court has ruled that constitutional restrictions forbid imposing punitive damages on such a basis. In this case, which was originally brought 10 years ago in 2000, a Multnomah County jury awarded approximately $168,000 in compensatory damages and $150 million in punitive damages against PM USA, and the trial court later reduced the punitive award to $100 million. In 2006, an intermediate appellate court affirmed the compensatory award, but reversed the punitive damages award and ordered a retrial on punitive damages. The case is Schwarzv. PM USA.