Pubdate: Mon, 07 Jun 1999 Source: Nation, The (US) Copyright: 1999, The Nation Company Contact: http://www.thenation.com/ Author: Bob Van Voris PHILIP MORRIS TARGETS PUNITIVES Says '98 Deal Means State Must Forgo Its Share Of Trial Award. Philip Morris Inc. thinks it has found a loophole to help take the sting out of an $80 million punitive damages award in March to the family of an Oregon man who died of cancer. Lawyers for the company, the largest cigarette manufacturer in the United States, on May 13 succeeded in getting Portland, Ore., state court Judge Anna J. Brown to knock the number down to $32 million. Williams v. Philip Morris, No. 9705-03957. And they have put Attorney General Hardy Myers on notice they intend to lay 60% of that figure off on the state of Oregon. Mr. Myers' office is fighting back, but whatever the outcome, critics fear it is just one of many unwelcome surprises that may result from the convoluted $206 billion agreement between the industry and 46 state attorneys general in November. The Oregon controversy began with a letter from Jeffrey M. Wintner, a lawyer at New York's Wachtell, Lipton, Rosen & Katz, written several weeks after the jury in the Williams case delivered its verdict. Mr. Wintner pointed to a recent piece of Oregon tort reform legislation that calls for 60% of punitive damages to be paid to the state rather than to the plaintiffs. Mr. Wintner wrote that the state's share constitutes a released claim under the settlement and that Philip Morris does not have to pay. Mr. Myers answered that Philip Morris has it wrong, and his office will seek a ruling to back him up. The controversy may play out in other states as well. The Oregon statute is one of at least seven so-called split-award laws nationwide, said Andrea Curcio, a professor at Georgia State University College of Law. "One of the things that really worries me is nobody out there has taken a really close look at this thing," said Graham Kelder, a lawyer at the Tobacco Control Resource Center, an anti-tobacco group based in Boston. When the settlement was announced in November, attorneys general had less than a week to decide whether or not to sign. Some critics said that was not nearly enough time to give the deal proper consideration. And they pointed out several potential loopholes. For example, the agreement permits the companies to obtain an offset for the proceeds of any new federal excise taxes that are earmarked for the states. Mr. Kelder oversaw a two-month project, completed in March, to analyze the settlement agreement--all 60,000 words worth--with funding from the American Cancer Society. Another possible loophole was revealed recently when the Wawa store chain advertised a sale on Philip Morris' Marlboro cigarettes on Pennsylvania billboards, despite the fact that, under the agreement, tobacco companies are not to use billboards. Faced with criticism, Wawa took the sign down. This article appeared in the June 7, 1999 issue of The National Law Journal. - --- MAP posted-by: Patrick Henry