updated 5/17/2006 8:09:05 PM ET 2006-05-18T00:09:05

A landmark $150 million jury verdict against Philip Morris was vacated Wednesday by an appeals court which ordered a new trial a new trial to reconsider damages against the tobacco manufacturer after a trial judge ruled the amount was excessive.

The March 2002 verdict, later reduced to $100 million, was the first such award in the nation based on claims that low-tar cigarettes led smokers to believe they were less dangerous than regular cigarettes.

A jury ordered Philip Morris to pay $150 million in punitive damages to the estate of Michelle Schwarz, of Salem, who died of lung cancer in 1999 at age 53.

The jury had agreed with lawyers for her family, who claimed that Philip Morris fraudulently marketed its low-tar Merit brand as safer than regular cigarettes.

But Multnomah County Circuit Judge Roosevelt Robinson found that amount “grossly excessive” and reduced it by a third, to $100 million.

The Oregon Court of Appeals overturned the jury verdict Wednesday and sent the case back to the circuit court to reconsider the amount of punitive damages.

The appeals court ruled that Robinson had failed to give the jury specific instructions requested by the tobacco company, but that he had the authority to reduce the amount of damages.

The appeals court also upheld the portion of the jury ruling on fraud, negligence and liability by Philip Morris.

A spokesman for the Altria Group Inc., parent of Philip Morris, said company attorneys were reviewing the ruling.

“It’s a fairly complicated opinion, but obviously they’ve overturned the punitive damages,” said spokesman John Sorrells.

Calls to attorneys for the estate of Schwarz and her husband, Richard, were not immediately returned.

The jury also awarded $168,000 in compensatory damages to Schwarz’s family, which Philip Morris attorneys have argued also should be overturned.

Robinson said in his ruling to reduce the damages to $100 million that the amount was consistent with the jury verdict but still enough to deter and punish the tobacco company.

The tobacco company attorneys had argued that Robinson should have followed a 2001 U.S. Supreme Court ruling that recommended there should be no more than a 9-to-1 ratio between punitive damages and other damages awarded to compensate for losses.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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