Philip Morris Should Comply with Oregon Supreme Court
Published on December 28th, 2011 09:06
Tobacco giant Philip Morris USA has to pay Oregon 60% of a $79.5 million award in a long-standing lawsuit filed by the family of a Portland smoker.
The cigarette producer’s parent company, Altria Group Inc., stated it will lower its full year revenue prospects based on the costs connected to the payments for this and the separate case of the former smoker. In compliance with Oregon law, 60% of penal damages awards should be allocated to a state fund in order to compensate crime victims. Although Philip Morris has paid the family its share of the judgment it disputed the demand to pay the state.
The cigarette company declared that the state surrendered its right to levy that money with the company's master accord and satisfaction agreement in 1998 with 46 states, six U.S. regions and the District of Columbia over claims related to smoking. Recently the Supreme Court revoked a lower court decision and stated that the state’s share of exemplary damages is adequate no matter what kind of lawsuit brought to the award. The money at stake is from a 1999 verdict of jury in a lawsuit filed by the family of Jesse Williams, who had died several years ago from lung cancer.
After many years of calls, Philip Morris finally paid the family in 2009, thus complying with the Supreme Court's decision. The payment, constituted more than $61 million, which includes economic losses, the 40 % share of exemplary damages, interest and costs. A government representative stated that there was no specified estimate of how much the state’s 60% share is worth at present, taking into consideration interest and costs, and there was some anticipation it will be assembled soon. "We think that it won’t be the end of the litigation," Tony Green, spokesman for Attorney General John Kroger stated in an interview.
A message expecting any comment was left for Altria. In a declaration, the Richmond, Va.-based company stated it plans to enter a pre-tax charge of about $62 million related to trials in the two cases and approximately $57 million in related interest costs. Thus, Altria forecasts to gain $1.58 to $1.64 per share for the 2011 fiscal year. Recently it expected to gain $1.60 to $1.66 per share.
Excepting- several other non-recurring items, the company plans to gain $2.01 to $2.07 per share for the year. Experts of the tobacco industry expect Altria to present adjusted profits of about $2.03 per share for the fiscal year. According to recent data, the he company’s shares dropped 6 cents in after-hours trading. On Friday has closed at $28.41, down 27 cents.
