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Lorillard Loses High Court Appeal

May 18, 1998

WASHINGTON (AP) _ The Supreme Court today refused to free cigarette maker Lorillard Inc. from having to pay $560,000 in punitive damages to the children of a California man who died of lung cancer.

The court, without comment, turned down Lorillard’s argument that it should not have to pay such damages over the sale of cigarettes with asbestos-containing filters during the 1950s by the company that later became Lorillard.

Milton and Shirley Horowitz of Beverly Hills, Calif., sued Lorillard in 1994, saying Horowitz’s lung cancer was caused by smoking Kent cigarettes made during the 1950s by P. Lorillard, a company that after several mergers became Lorillard.

The cigarettes’ filters contained asbestos, and the type of lung cancer from which Horowitz suffered had been linked to asbestos exposure.

A jury awarded the Horowitzes $1.3 million in damages to compensate for their losses plus another $560,000 in punitive damages, which are intended to punish and deter wrongdoing.

Horowitz died in 1996, and his wife died last year. Their children pursued the case.

A California appeals court upheld the jury verdict, rejecting Lorillard’s argument that it could not be forced to pay punitive damages over wrongdoing by its predecessor, P. Lorillard.

In the appeal acted on today, Lorillard’s lawyers said it was not involved in the earlier company’s sale of asbestos-filter cigarettes. Companies should not be forced to pay punitive damages in such cases unless there is evidence of independent wrongdoing by the new company, the appeal said.

Lawyers for the Horowitzes’ children said companies should not be allowed to avoid punitive damages by reorganizing under another name. Lorillard did not show that its ownership or directors changed as a result of the mergers, they said.

The case is Lorillard vs. Horowitz, 97-1459.

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