Philip Morris Will Post $100 Million Bond and Begin Appeal of Final Engle Judgment

Philip Morris Inc. announced today it will immediately post the $100 million bond required by Florida law in order to stay execution of the judgment in the Engle action case and will begin the appeals process. Earlier in the day, Dade County Circuit Judge Robert P. Kaye entered a final order of judgment against Philip Morris and other tobacco companies affirming the award earlier this year of compensatory damages to three smokers and punitive damages of $145 billion for members of the Engle action.

Kaye's 68-page order, which also denied all pending and post-trial motions, came within hours after a federal judge in Miami remanded the Engle case to state court on procedural grounds and without affording Philip Morris and other parties in the case an opportunity to argue the legal basis for its motions.

"We intend to file notice Tuesday with the Dade County Circuit Court that we will appeal this verdict and the rulings Judge Kaye issued today, and we will then post the required $100 million bond," said William S. Ohlemeyer, Philip Morris vice president and associate general counsel.

"It is clear that, under Florida law, the entry of the final judgment in the Engle case is improper and the failure of Judge Kaye to reduce the punitive damages verdict is inappropriate. These actions provide additional grounds for our already-detailed appeal.

"One thing is crystal clear under Florida law - juries cannot award damages that would financially cripple or destroy a company, and no industry in the world can pay a $145 billion punitive damage award," said Ohlemeyer.

"In fact, the court doesn't even know who would be entitled to punitive damages until each of the estimated 700,000 class members have had their day in court, a process that would tie up the state's judicial system for decades to come.

"Given the matters to be decided, we were surprised that the court issued these rulings without hearing from all parties. However, Judge Kaye apparently has satisfied the procedural requirements that will enable us to proceed with an appeal of these verdicts, and we intend to do so immediately," he added.

Ohlemeyer said he believes the Engle verdict ultimately should be overturned because, among other reasons, the class certification violated Florida law and the trial plan violated the state and federal constitutions.

Ohlemeyer also said the list of legal errors committed by the court "started long before jury selection and continued all the way through closing arguments of the punitive damages phase."

The Engle jury also was allowed to consider "mountains" of improper evidence, was given conflicting legal instructions from the court, was allowed to base its punitive damages award on asset valuations of tobacco companies not even sued in the cases and was illegally led to believe companies could pay any damage award over several years.

Ohlemeyer pointed out that more than 24 state and federal courts have considered class actions like the Engle case against tobacco companies in recent years and have concluded they are inappropriate and legally insufficient in smoking and health litigation. The U.S. Supreme Court also has ruled against class certification in similar types of cases.

"We believe when the Engle case is considered in the proper appellate venues, it will share the same fate as those other class action tobacco lawsuits," Ohlemeyer said.

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