A California jury has awarded a record-breaking $28 billion US to a former smoker who sued Philip Morris (NYSE:MO)for fraud and negligence.

Betty Bullock, 64, took up smoking when she was 17 years old. She now has lung and liver cancer. Her attorney argued that Philip Morris hid the dangers of smoking through disinformation campaigns dating back to the 1950s.

The tobacco company's lawyers focused on Bullock's decision to smoke, which represented a shift from their usual strategy of defending their actions.

Award leads to big drop in Philip Morris shares

Philip Morris said it will appeal the award.

"This jury should have focused on what the plaintiff knew about the health risks of smoking, and whether anything the company ever said or did improperly influenced her decision to smoke or not to quit," William S. Ohlemeyer, Philip Morris Companies vice president and associate general counsel, said in a release.

"Instead, it appears that this decision speaks to more general policy issues regarding smoking that can't fairly be decided in lawsuits like this," he said.

In September, the same jury awarded Bullock $750,000 US in economic damages and $100,000 for pain and suffering. Friday's decision was for punitive damages.

The previous record decision against a tobacco company was $3 billion US awarded in June 2001 to Richard Boeken, a former heroin addict who died in January. That case also involved Philip Morris. The award was later cut to $100 million US.

After trading above $40 US for most of Friday, shares of Philip Morris fell sharply after the judgement was announced. The stock closed at $36.59 US, down $2.59 US on the NYSE.