Fla. Court OKs Lump Tobacco Award
An appeals court has ruled that a lump-sum payment may be awarded to plaintiffs in a landmark suit against Big Tobacco -- a payment that lawyers for cigarette makers fear could cripple the industry.
The 3rd District Court of Appeal ruled Wednesday that the same jurors who decided the nation's largest cigarette makers are liable for making a deadly product can decide on a single sum for punitive damages instead of on a case-by-case basis.
Tobacco industry lawyer Dan Webb had warned the court that permitting such a lump-sum award for 500,000 sick Florida smokers could exceed $300 billion, which ``would destroy any industry.''
``The stakes have suddenly become humongous,'' said Northeastern University law professor Richard Daynard, head of an anti-tobacco clearinghouse. ``The fate of the industry rests on this jury that has already found that the industry has behaved outrageously.''
In July, the jury found that the nation's five largest cigarette makers produced a product that causes emphysema, lung cancer and other illnesses. The same panel is to determine damages in the second phase of the trial, set to begin Nov. 1.
Last month, the appeals court agreed with the industry that damages should be decided one smoker at a time. Investors rejoiced, figuring the tobacco industry could more easily defend itself against lots of small awards than against one big multibillion-dollar verdict.
But the same appeals court withdrew its decision and agreed to reconsider. On Wednesday, just hours after hearing arguments from both sides, the three-judge panel issued an unanimous, one-paragraph ruling without explaining its reasoning.
Presiding Judge David Levy, who heard the case along with Judges Mario Goderich and Melvia Green, said the appeals court ``cannot micromanage what the trial judge does'' as long as he's not exceeding his authority.
Lawyers for both sides are prohibited from discussing the case.
The defendants are Philip Morris, R.J. Reynolds Tobacco, Brown & Williamson Tobacco, Lorillard Tobacco, the Liggett Group and the industry's Council for Tobacco Research-U.S.A and Tobacco Institute Inc.
Martin Feldman, a tobacco analyst for Salomon Smith Barney, said the ruling probably increases the chance that the industry will try to settle the case out of court.
U.S. juries have awarded damages in smoking liability cases only five times -- twice in Florida and once in New Jersey, Oregon and California. The Florida and New Jersey verdicts were overturned on appeal.
The $206 billion national settlement reached with the tobacco industry in November bars states from suing to recoup the costs of treating sick smokers but doesn't stop lawsuits by individuals.