Class action suit rejected; could affect tobacco cases
MIAMI - A state appeals court has struck down a class-action lawsuit against State Farm Insurance in a decision that could be used by Big Tobacco in its attempt to wipe out a record-setting $145 billion verdict.
The same court is waiting for the final round of court filings this summer before hearing a challenge by the nation's five biggest cigarette makers to the giant jury award to sick Florida smokers two years ago.
A three-judge panel of the 3rd District Court of Appeal concluded Wednesday that the State Farm lawsuit lacked several of the basic requirements for allowing people with shared claims to sue as one.
The tobacco industry has argued all along that class certification should never have been granted, but the appeals court ruled in favor of smokers in 1996.
Cigarette makers claim that decision is out of step with other state and federal courts, which since then have largely rejected attempts to assemble large groups of smokers for a legal attack on the industry.
Seth Moskowitz, spokesman for R.J. Reynolds Tobacco Co., said Thursday that "the very same principles" discussed in the State Farm case have been raised by tobacco attorneys against the smokers' class.
"If you've got a situation where you have widely diverse individuals and widely diverse relationships and histories concerning the product, then it simply doesn't make sense" to cover them under one trial, he said.
Attorney Steve Hunter, who sued State Farm, said he was "very surprised" by the decision but doesn't expect the ruling to hurt smokers at all.
"The Third District is still affirming the principle upon which they affirmed the first class-action against the tobacco industry," he said. "It means they still believe in it."
The appeals court cited its 8-year-old precedent in an earlier tobacco class-action covering the nation's flight attendants as part of its findings against people suing State Farm's auto insurance arm.
Policyholders claimed State Farm should pay back full deductibles plus interest and money for the temporary loss of damaged vehicles after the company recovers money in insurance lawsuits.
Class certification is one of several legal issues raised by cigarette makers to throw out the jury's punitive damage award.