Reuters reports that Philip Morris Cos. has been ordered by a Los Angeles jury to pay a record $28 billion in punitive damages to a 64-year-old woman suffering from terminal lung cancer. The award reportedly was the largest to a single individual in US history.
The woman blamed the company for not warning her of the dangers of smoking. The company already had been hit with $850,000 in compensatory damages in the case.
Philip Morris said it would appeal the judgment, describing it as "inconsistent with the evidence and applicable law."
While analysts say they expect the jury award to be reduced, the general consensus seems to be that the company’s described strategy of stressing individual responsibility of smokers had failed.
The woman blamed the company for not warning her of the dangers of smoking. The company already had been hit with $850,000 in compensatory damages in the case.
Philip Morris said it would appeal the judgment, describing it as "inconsistent with the evidence and applicable law."
While analysts say they expect the jury award to be reduced, the general consensus seems to be that the company’s described strategy of stressing individual responsibility of smokers had failed.
- KC's View:
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Ironically, as the jury award was being made, Canadian scientists were releasing a study saying that women who start smoking when they are teenagers are 70 percent more likely to develop breast cancer than non-smokers,
And, at the NACS convention, a coalition of six tobacco companies and a growing number of retailers announced today that they are joining forces “to seek legislative relief from anti-competitive cigarette trade practices of the tobacco industry's market leaders,”
Which reminds us of Nero reaching for his fiddle as Rome burned. (Except Rome wasn’t going up in a puff of poisonous smoke…)
When the judgment was announced, Philip Morris’s stock price dropped, closing seven percent under their lowest level since December 2000, pulling down other tobacco stocks as well.
Beyond that, we simply don’t know what to say…except how do companies keep getting hit with these kinds of verdicts and stay in business?
