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Philip Morris urges damages only in millions

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MIAMI (AP) — The nation's leading cigarette maker would rather pay millions than billions if a jury decides the tobacco industry should pay punitive damages in a case involving up to 700,000 sick Florida smokers.

Attorney Dan Webb, who represents Philip Morris Inc., doesn't want jurors to award punitive damages at all. But he suggested during closing arguments Tuesday that $75 million would be "a fair amount" for his company, based on ready cash and the percentage of customers living in Florida.

The amount would average to $150 per person if split among a midrange estimate of 500,000 sick smokers covered by the landmark class-action lawsuit. Philip Morris is being asked to pay the most money among the five tobacco companies.

The companies have argued that they should not be required to pay any more than their combined net worth of $15.3 billion, the difference between their assets and liabilities. The smokers have asked for $123 billion to $196 billion, with a suggested amount of $154 billion.

"That's a request for a death warrant for each of these five companies," said Webb, the lead tobacco attorney in the case. "That amount will destroy each of these companies, not once, but 10 times over."

The four other tobacco companies — R.J. Reynolds Tobacco, Brown & Williamson Tobacco, Lorillard Tobacco and Liggett Group — were to give their closing arguments Wednesday and Thursday. The jury could get the case by the end of the week.

The six-member jury already has decided that the industry makes a deadly, defective product and awarded $12.7 million in compensatory damages to the three representative smokers. The jury must now decide how much to award in punitive damages, which are intended to punish and deter misconduct.

The key tobacco defense is that the industry has changed its ways since states began suing in 1994, and that $257 billion in settlements with the states is punishment enough.

The case — the first smokers' class-action lawsuit to go to trial — represents the gravest financial threat to the industry since the settlements. Any decision will be appealed and could take at least two years to move through Florida's courts.

Under Florida law, a punitive damages verdict cannot put a company out of business, and judges are required to reduce any award that would. In addition, some tobacco states in recent months have passed laws to protect the tobacco companies from having to post a ruinous amount of money while they appeal.


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