Big Tobacco appeals record $145 billion award to smokers
The nation's five biggest tobacco companies want a state appeals court to throw out a record $145 billion jury award to Floridians who say they were sickened from smoking, and they want the case to lose its class-action status.
The verdict in the first statewide class action against Big Tobacco was "the largest and most ruinous in American legal history," Elliot Scherker, a Miami lawyer representing Philip Morris, R.J. Reynolds and Brown & Williamson, told a three-judge panel of the 3rd District Court of Appeal in Miami. Paying the judgment would bankrupt the tobacco companies -- contrary to Florida law, he said.
Stanley Rosenblatt, one of the lawyers representing the 700,000 Floridians estimated to be a part of the class action, argued to keep the class intact.
"You're talking about people who died as a result of being addicted to this product and don't die an easy death," Rosenblatt said. "After two years of trial, 157 witnesses and thousands of exhibits they ignore the evidence. They ignore the facts. The jury ruled on a half century of their conduct."
The hearings before the state appeals courts are not about whether the tobacco companies manufactured a product that causes cancer and lied to the public about it, as the jury found in the first phase of the complicated two-year trial that ended on July 14, 2000. Arguments now focus on whether legal procedure was violated during the trial, said Mark Gottlieb, a staff attorney with the Tobacco Products Liability Project, an anti-tobacco nonprofit based at Northeastern University in Boston.
After a trial that was so long and complicated that a copy of the transcript costs six figures, the appeals court would have to find a lot of technical violations in order to throw out the entire case, Gottlieb said after listening to oral arguments on Wednesday.
Scherker said they were rampant.
"There is no paint brush big enough to cover up the flaws in this trial," he said.
The case should not be a class action because the smokers' illnesses, exposure to cigarettes, level of addiction and motivation to smoke are too varied to lump the plaintiffs together as one class, he said.
Rosenblatt "flouted the rules of the court," Scherker said, by telling the racially and culturally diverse jurors that tobacco company actions were akin to slavery and the Holocaust, and for telling them to ignore the judge's instructions.
Judge David Gersten, who led the questioning of the lawyers, said he was "somewhat bothered" by Rosenblatt's references to the Rev. Martin Luther King Jr., Rosa Parks and the Holocaust.
Rosenblatt responded that the tobacco companies frequently asserted during the trial they were being punished for selling a legal product. The civil rights references, he said, were to show that just because something is legal -- telling Rosa Parks to move to the back of the bus, for instance -- doesn't make it right.
Gersten and Judge David Levy asked Rosenblatt and the tobacco lawyers several questions about the worth of the companies. Apparently he was trying to determine if a $145 billion verdict would bankrupt them.
Isn't the jury, which listened to expert witnesses talk about the companies' worth, entitled to decide the amount, Gersten asked. He and Levy pointed out that Rosenblatt called several witnesses to testify about the worth of the companies.
The tobacco companies called their Chief Executive Officers to testify about the value of their companies, and certified company audits were placed into evidence, Scherker said.
"In today's environment [the audits] don't hold a lot of water," Gersten told Scherker, eliciting laughter from members of the class, who packed one side of the courtroom. Tobacco lawyers and their support staff packed the other side.
The lawsuit filed in 1994 on behalf of sick smokers and the families of deceased smokers, is known as the Engle case for lead plaintiff Dr. Howard Engle, a Miami Beach pediatrician with emphysema.
In the first phase the jury ruled the tobacco companies knew they manufactured a product that causes cancer and other diseases but hid that knowledge from the public.
In the second phase the jury heard the stories of three former smokers who claimed they were addicted to cigarettes and developed cancer as a result of their habit. The three, representing the entire class, included Mary Farnan, a nurse from Ingles, who had lung and brain cancer; Frank Amodeo, a woodworker from Orlando who had throat cancer and lost his ability to eat or drink; and Angie DellaVecchia, a homemaker from New Port Richey, who died of brain and lung cancer in 1999. The jury awarded a total of $12.7 million to the three as compensation for their medical bills, pain and suffering.
Farnan and Amodeo were in the courtroom with their spouses on Wednesday.
In the third phase of the trial, the jury determined the tobacco companies should be forced to pay $145 billion as punishment for the fraud that resulted in the sickness and suffering of all the class members.
At the next phase of trial, each plaintiff will have to go to court to seek compensatory damages to qualify for a piece of the $145 billion award.
Scherker argued it is unconstitutional to hold the third phase, assessing punishment on behalf of all class members, when the jury did not see or hear from them. Compensatory damages should have been determined for all class members before the punitive phase proceeded, he said.
"Due process requires you to be found guilty first," he said.
Plaintiffs' lawyers around the country are watching this case, because it is the first statewide class action against the tobacco companies that has been certified and allowed to go to trial.
Gersten seemed to acknowledge the court could be creating new law. "We're in uncharted waters here," he said.