Ore. trial court to reconsider $100M tobacco case
Headline Legal News
The Oregon Supreme Court has ruled that Philip Morris does not have to pay $100 million in punitive damages to the family of a smoker who sued the tobacco giant over its low-tar cigarettes.
The case, however, is going to another jury to decide just how much the death of Michelle Schwarz from lung cancer in 1999 will cost Philip Morris — and legal experts say it could easily be another big award.
A Multnomah County jury in Portland originally awarded the Schwarz family $150 million in March 2002 before the trial judge reduced it to $100 million.
On Thursday, the Oregon Supreme Court vacated the $100 million award and sent the case back to the trial court to reconsider the punitive damages after ruling the judge failed to properly instruct the jury.
The court said the judge should have told the jury it could not punish Philip Morris directly for harm caused to others besides Schwarz.
But the court also supported the trial judge, who had rejected jury instructions the tobacco company had requested.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.