The Case of Schwarz v. Philip Morris USA (2002): When “Low Tar” Promises Led to a $150 Million Verdict (Later Reduced)
In the complex landscape of tobacco litigation, the case of Schwarz v. Philip Morris USA (2002) stands out. It highlights the legal battles fought over the marketing of “low tar” cigarettes and their alleged misrepresentation as a safer alternative to regular cigarettes. This case, which initially resulted in a significant $150 million award for the plaintiff, only to be later reduced, offers valuable insights into product liability, fraud, and the ongoing struggle to hold tobacco companies accountable for the health consequences of their products.
The Backstory: Michelle Schwarz and “Low Tar” Cigarettes
Michelle Schwarz began smoking in 1964 at the age of 18. Like many smokers, she attempted to quit multiple times but struggled with nicotine addiction. In an effort to mitigate the perceived health risks, Schwarz switched from Benson & Hedges to Merit, a Philip Morris brand marketed as having lower tar and nicotine levels. Tragically, Michelle Schwarz died of lung cancer in 1999 at the age of 53.
Her husband, Paul Scott Schwarz, as the personal representative of her estate, filed a lawsuit against Philip Morris, alleging negligence, strict product liability, and fraud. The central argument was that Philip Morris misrepresented “low tar” cigarettes as a safer alternative, leading Michelle Schwarz to believe she was reducing her risk by switching brands.
The 2002 Trial and the Initial Verdict
The trial in 2002 presented compelling evidence regarding Philip Morris’s marketing practices and internal knowledge about the dangers of smoking. The plaintiff’s legal team emphasized that Schwarz had switched to Merit cigarettes based on the belief that they were less harmful. They argued that Philip Morris knew “low tar” cigarettes were not truly safer and that smokers often compensated by inhaling more deeply or smoking more cigarettes, negating any potential reduction in risk.
After deliberating for nearly five days, the jury sided with the plaintiff. They awarded $168,514 in compensatory damages to cover medical expenses and pain and suffering. More significantly, they imposed $150 million in punitive damages, sending a strong message to Philip Morris. This amount included $115 million for fraud, $25 million for negligence, and $10 million for strict liability due to marketing a defective and unreasonably dangerous product.
The Appeal and Reduction of Damages
Philip Morris immediately announced its intention to challenge the verdict, arguing that it was inconsistent with the law and the facts of the case. The company contended that the jury’s decision was more of a general condemnation of Philip Morris than a specific finding of liability directly linked to Michelle Schwarz’s illness.
The case went through a series of appeals and remands. The Oregon Supreme Court ultimately sent the case back for a new trial limited to the amount of punitive damages, concluding that the trial court had not properly instructed the jury on the issue of punitive damages. A subsequent jury in 2012 awarded $25 million in punitive damages.
Legal and Ethical Implications
Schwarz v. Philip Morris USA (2002) raises several critical legal and ethical questions:
- Product Liability: Were “low tar” cigarettes defectively designed or marketed? Did Philip Morris fail to adequately warn consumers about the risks of these products?
- Fraud: Did Philip Morris intentionally mislead consumers about the safety of “low tar” cigarettes? Did they know these cigarettes were not a safer alternative and conceal this information?
- Punitive Damages: What is the appropriate level of punitive damages in cases of corporate misconduct? How should juries be instructed to ensure that punitive damages are fair and proportionate?
The case also highlights the challenges of proving causation in tobacco litigation. While there is overwhelming evidence that smoking causes lung cancer and other diseases, it can be difficult to establish a direct link between a specific brand of cigarettes and a particular individual’s illness.
The Broader Context of Tobacco Litigation
Schwarz v. Philip Morris USA (2002) is just one chapter in the long and complex history of tobacco litigation. For decades, tobacco companies successfully defended themselves against lawsuits, often arguing that smokers assumed the risks of smoking and that federal laws preempted state law claims.
However, the tide began to turn in the 1990s, as internal tobacco company documents were leaked, revealing that the industry had long been aware of the addictive nature of nicotine and the health risks of smoking. This led to a wave of lawsuits by states seeking to recover healthcare costs associated with smoking-related illnesses. The Master Settlement Agreement (MSA) in 1998 resulted in major tobacco companies agreeing to pay billions of dollars to states and to curtail certain marketing practices.
Individual lawsuits against tobacco companies have also continued, with varying degrees of success. While large punitive damage awards are rare, these cases serve as a reminder of the human cost of smoking and the ongoing efforts to hold tobacco companies accountable.
Lessons Learned and Future Considerations
The case of Schwarz v. Philip Morris USA (2002) offers several important lessons:
- Marketing Matters: Tobacco companies can be held liable for misrepresenting the safety of their products, even if those products are legal.
- Transparency is Crucial: Internal company documents can be powerful evidence in litigation.
- The Fight Continues: Despite decades of litigation, the battle against tobacco use is far from over.
As the tobacco industry evolves and new products like e-cigarettes emerge, it is crucial to remain vigilant and ensure that consumers are fully informed about the risks of all tobacco products. Continued legal action, combined with public health initiatives, can help to reduce the burden of smoking-related diseases and protect future generations.
While the initial $150 million award in Schwarz v. Philip Morris USA (2002) was later reduced, the case remains a significant example of the legal challenges faced by tobacco companies and the ongoing fight for accountability in the face of the devastating health consequences of tobacco use. What responsibility do companies have to ensure their products are not misrepresented?