SAN FRANCISCO (Reuters) - A jury considering punitive damages against two major tobacco companies in a lawsuit launched by a woman who developed lung cancer after smoking for 25 years ended their first day of deliberations on Friday without reaching a ver

The 12-member San Francisco Superior Court panel found Monday that Phillip Morris Cos Inc. and R.J. Reynolds Tobacco Holdings Inc. should pay 40-year-old Leslie Whiteley $1.7 million in compensatory damages. The verdict was the latest blow against the embattled tobacco industry, which has faced a string of consumer lawsuits in recent years. The jury was the first to find cigarette makers responsible for the health of people who took up smoking after the surgeon general required warning labels on all cigarette packages in 1965 -- demolishing a key tobacco industry defense against court action by former smokers. Whiteley sued the cigarette makers after being diagnosed with lung cancer. The mother of four from Ojai, Calif., began smoking at age 13 and did not quit until her cancer diagnosis in 1998. Whiteley also smoked marijuana, which tobacco industry lawyers argued was the chief cause of her cancer. But the jury found that the tobacco companies acted with malice, knew about the health hazards of smoking and deliberately misled the public about those dangers. It also found that the two companies committed fraud. In closing arguments of the trial's punitive damage phase Friday, Whiteley's lawyer Madelyn Chaber asked the jury to award her client an additional $115 million to punish the two companies. ``If you do not find punitive damages against them they will not be deterred,'' Chaber said. But lawyers for the tobacco companies argued that the firms had already gotten the message from similar lawsuits. They cited the $206 billion settlement reached in 1998 between 46 states and the major tobacco companies as evidence of their good will. ``There is no need to further punish these companies,'' Jeffrey Furr, a lawyer for R.J. Reynolds said. ``They have been placed under a microscope like no other industry in U.S. history.'' The compensatory damages decision awarded Whiteley $1.47 million for medical costs and pain and suffering, and awarded her husband Leonard $250,000 for loss of companionship. A lawyer for Phillip Morris suggested to the jury that they award punitive damages two or three times the amount the panel had already awarded in compensatory damages. ``At this point all I can really ask you is to be fair and reasonable,'' David Hardy told the jury. The Whiteley case is the first California case involving an individual smoker to go to trial since a San Francisco jury last year awarded $51 million to Patricia Henley, a smoker who sued Philip Morris after developing lung cancer. The judge later cut that award to $26 million, and the case is now on appeal. Shortly after the Henley verdict, an Oregon jury awarded $81 million to the family of a smoker of Philip Morris' Marlboro cigarettes, an award which was later cut to $32 million.

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