updated 3/31/2009 2:50:41 PM ET 2009-03-31T18:50:41

Ten years and a day after a jury awarded Mayola Williams nearly $80 million in punitive damages in her fight with a cigarette maker, the Supreme Court said Tuesday she can collect her share.

The court threw out the appeal of that award by Altria Group Inc.’s Philip Morris USA, frustrating the efforts of business interests that hoped to use this case to get the court to set constitutional limits on damages awarded by juries.

Williams stands to collect between $60 million and $65 million from a pot that has grown to more than $155 million because of accrued interest.

In a one-sentence order, the court left in place a ruling by the Oregon Supreme Court in favor of Williams. The state court has repeatedly upheld the verdict finding Philip Morris accountable for misleading people into thinking cigarettes were not dangerous or addictive.

The justices heard arguments in the case in December. On Tuesday, with no explanation, justices said they are not passing judgment on the legal issues that were presented. Instead, it is as if the court had declined to hear the case at all.

Philip Morris had argued that the award should be thrown out and a new trial ordered because of flaws in the instructions given jurors before their deliberations.

Business interests had once hoped the high court would use the case to set firm limits on the award of punitive damages, intended to punish a defendant for its behavior and deter a repeat offense.

Because the court itself said nothing about the case, it is hard to read much into the decision, said experts on both sides of the case.

Murray Garnick, Altria’s associate general counsel, expressed disappointment with the ruling, but said the decision does not undo earlier high court rulings reining in punitive damages awards. “While we had hoped for a different outcome, the Supreme Court has decided not to review a narrow procedural ruling by the state court,” Garnick said.

Robert Peck, Williams’ Washington-based lawyer, read the outcome differently. He said the court has signaled a willingness to allow large awards in certain circumstances. “I think we can take from this long tale that if the behavior is sufficiently reprehensible, then larger awards are merited,” Peck said.

The case has bounced around appellate courts since shortly after Williams prevailed, on March 30, 1999, in the claims of fraud she pursued on behalf of her late husband, Jesse, a longtime smoker.

Jesse Williams was a janitor in Portland who started smoking during a 1950s Army hitch and died in 1997, six months after he was diagnosed with lung cancer.

His widow was awarded $800,000 in actual damages. The punitive damages are about 97 times greater. A state court previously cut the compensatory award to $521,000.

The original $79.5 million punitive damages verdict grew at a rate of 9 percent a year, because of interest authorized by Oregon law. Sixty percent of the total is supposed to go to an Oregon crime victims fund, although the company said Tuesday it plans to contest the portion owed the state.

The Oregon high court made its first decision in 2002, refusing to hear an appeal from Philip Morris.

Then the U.S. Supreme Court rejected the punitive damages, saying in another case that damages generally should be held to no more than nine times actual economic damages. It declined, however, to make that a firm rule.

Next, the Oregon Supreme Court upheld the punitive damages, citing “extraordinarily reprehensible” conduct by Philip Morris officials.

Then came the U.S. Supreme Court’s second take on the case. In 2007, the court said in a 5-4 decision that jurors may punish a defendant only for harm done to someone who is suing, not other smokers who could make similar claims.

The state court was told to reconsider the award in the context of instructions for the trial jury that Philip Morris proposed and the trial judge rejected.

In January, the Oregon court said there were other defects in the instructions that violated Oregon law, and supported the trial judge’s decision not to give the proposed instructions to the jury.

The case is Philip Morris USA v. Williams, 07-1216.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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