French Find Cigarette Maker Partly Liable in Cancer Death
PARIS -- In a ruling that could open a European front in the war against tobacco companies, a French court ruled Wednesday that Seita, maker of the Gauloise and Gitane brands of cigarettes, was partly responsible for the death of a three-pack-a-day smoker
The court's decision is the first time that a tobacco company has been held responsible in a health liability case in France, where smoking is widely accepted. The court case is also one of the few anywhere that a tobacco company has lost.
Seita, a formerly state-owned company known for the acrid Gauloise cigarettes that habitually dangle from the lips of millions of French people, said it was stunned by the decision and would appeal.
The ruling caused a 4 percent drop in Seita's shares and came just as the company is about to merge with Tabacalera, a Spanish competitor, forming one of the world's biggest tobacco producers.
Although Seita could ultimately win the case, tobacco industry analysts acknowledged that the ruling had broken some new ground in smoking litigation.
"This is relevant because it's the first in France, and it's one of the few that have been won against the industry," said Martin Feldman, a tobacco industry analyst at Salomon Smith Barney in New York.
The court came up with a complicated formula for responsibility. It held that the smoker, Richard Gourlain, who smoked up to three packs of filterless Gauloises a day for about 35 years, was also to blame for his illness. Gourlain, who died earlier in the year at 49, apparently started smoking when he was 14.
The court found that Seita could be held responsible for the years that Gourlain smoked when he was a teenager and partly responsible for the years he smoked as an adult before the company put health warnings on cigarette packs in 1976.
Some experts said that even if it is upheld on appeal, the ruling in the civil court of Montargis, a town about an hour south of Paris by car, is unlikely to have the far-reaching effects of recent anti-tobacco litigation and government initiatives in the United States. The amount of money that plaintiffs can win in France is relatively small. The French courts do not award punitive damages, and class-action suits do not exist.
The total amount of money Gourlain's widow, Lucette, is asking for is less than $500,000, and the court, by ruling that her husband had been partly responsible, seemed to indicate that payment would be less than that. The court set a three-month deadline for an evaluation of the compensatory-damages claim.
Still, analysts said that the case might still have an effect on Seita's stock because investors have been frightened by the developments in the United States. In a class-action suit filed on behalf of 500,000 ill Florida smokers, a jury held in July that big tobacco companies like Philip Morris and R. J. Reynolds were liable for their pain, suffering and lost wages. The suit is now in its second phase, where the size of the penalty is to be determined. Some legal experts have predicted that the damage award could run $300 billion to $500 billion.
Speaking of the French ruling, Joanna Scharf, an analyst at the Arnold & S. Bleichroeder investment firm, said: "Even if it stands, this case will not be a big deal because there is not enough money in it. But psychologically, this is very bad. There will be investors who are scared by it. They look at what happened to Philip Morris, and they will just want to run."
Seita said in a statement that it "cannot be held responsible today for the choice, which is one of individual responsibility."
The ruling also was the first instance of a suit holding a tobacco company responsible for a cancer death had gone so far in Europe, where efforts to take tobacco companies to task have proved tougher for plaintiffs than in the litigation-happy United States.
Part of the reason for the difficulty is that lawyers are reluctant to bring cases that they think will take years of work and that they are unlikely to win. In many countries, lawyers cannot operate on contingency fees, which promise a big payout in a courtroom victory, with losers paying the winner's legal costs.
But the success of the American litigants has prompted an increase in the cases in Europe, experts said. In June, for instance, a local branch of France's national health system brought suit asking major cigarette makers, including Reynolds, Rothmans International and Philip Morris to pay nearly $10 million for the cost of treating lung and throat cancer since April 1997.
Earlier this week in Cracow, Poland, a court began hearing a case against Seita and Philip Morris brought by a Polish citizen demanding 2.3 million euros ($2.36 million) in damages for causing his mother's death from lung cancer in July.
While still alive in December 1996, Gourlain originally brought suit against Seita. After his death, his widow continued the action, arguing that the company provided insufficient information about the health risks of smoking.
The court found that between 1963 and 1969, Seita was entirely responsible for Gourlain's smoking because it failed to provide sufficient information on the health risks. Between 1969 and 1976, the court found Gourlain to be 40 percent responsible for his illness and Seita 60 percent responsible. After 1976, when the government made health warnings mandatory, the court found Seita to be no longer responsible in Gourlain's actions.
Analysts said the suit against Seita might also hurt share prices for Tabacalera when the market reopens in Madrid on Thursday. It was closed Wednesday for a holiday.