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Press release from Business Wire

Oregon Supreme Court Overturns Lower Court's Decision in Long-Running Williams Case

Friday, December 02, 2011

Oregon Supreme Court Overturns Lower Court's Decision in Long-Running Williams Case16:35 EST Friday, December 02, 2011 RICHMOND, Va. (Business Wire) -- Philip Morris USA (PM USA) said today that the Oregon Supreme Court held that the company is required to pay the state 60% of a $79.5 million punitive damages award plus interest in a 14-year old individual smoking and health case. Today's decision resulted in the Williams case, where in 1999 an Oregon jury awarded compensatory and punitive damages to an individual smoker. Under Oregon law, the state is entitled to 60% of any punitive damages award. PM USA argued that the state released any right to collect the award when it signed the Master Settlement Agreement with tobacco companies in 1998. “We believe that the Oregon Supreme Court misapplied the law and reached an erroneous result,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Philip Morris USA. “As the lower court recognized, the state released its claims to any punitive damages when it signed the Master Settlement Agreement.” In 1998, the nation's leading cigarette manufacturers signed the Master Settlement Agreement with 46 states, five U.S. territories and the District of Columbia. The Master Settlement Agreement was an historic agreement that imposed significant restrictions on a range of cigarette marketing activities and required the participating manufacturers to make billions of dollars of settlement payments to the states. In return, states including Oregon agreed to release claims “directly or indirectly based on, arising out of or in any way related, in whole or in part to” allegations of tobacco-related conduct. “This decision is grossly unfair and contrary to the language and spirit of the Master Settlement Agreement,” Garnick added. The remaining 40% of punitive damages plus interest was previously paid to the plaintiff in this case. ALCS Media Relations804?484?8897