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Oregons budget benefits from historic tobacco verdict

Philip Morris, one of the largest tobacco manufacturers in the world, will pay Oregon $56 million - the remainder of punitive damages that were the result of a 1997 lawsuit filed by the family of a Portland smoker who died of lung cancer.

That Jan. 13 decision came after the Oregon Supreme Court rejected a request from Philip Morris to reconsider a December 2011 court ruling that said the tobacco company - maker of many popular brands of the drug, including Marlboro and Virginia Slims - must pay the state damages. Under Oregon's 'split recovery' law, the state is entitled to 60 percent of a punitive damage award in certain cases to be paid to the Criminal Injuries Compensation Account of the Department of Justice's Crime Victims' Assistance division.

Part of the award will fund crime victims programs, but the Oregon Attorney General's office says a majority will help the Legislature deal with the budget deficit.

'This was a historic win for the Department of Justice and for Oregon,' said Attorney General John Kroger in a statement Jan. 17.

The Oregon Supreme Court upheld the state's share of the award on Dec. 2, 2011 after more than a decade of appeals by Philip Morris, which had until this month sought to avoid paying Oregon its 60 percent portion of the total award, according to court documents. Philip Morris had already paid compensatory and part of the punitive damages to the Jesse Williams estate.

Williams died of lung cancer in 1997 after decades of smoking cigarettes made by Philip Morris. His estate filed a complaint that year against the company, alleging fraud and negligence by the manufacturer caused his death. A Multnomah County jury awarded $79.5 million in punitive damages in 1999. Over time, interest has accrued on that award, which has been the subject of protracted appeals in the state court and in the United States Supreme Court.