Maverick cigarette CEO pledges war on Big Tobacco
MIAMI, June 22 (Reuters) - The owner of Liggett, the discount cigarette-maker that helped state governments secure $246 billion from Big Tobacco, on Thursday told Miami jurors he was waging war against his industry to curb smoking.
Bennett LeBow, chief executive of Vector Group Ltd, a defendant in a landmark class-action lawsuit brought by sick smokers, said his close cooperation with anti-tobacco activists had savaged sales at Vector's Liggett unit, but he believed he was following the morally correct course.
``There's nothing I can do to bring back your loved ones. That can't be done,'' LeBow said in a courtroom of lawyers, reporters and plaintiffs, who claim smoking caused their cancers, heart disease and other ailments.
``There's nothing I can do to bring back your health. But I'll promise you I'll continue to fight this war on tobacco.''
LeBow, whose company sold U.S. rights to L&M, Chesterfield and Lark brands to cigarette giant Philip Morris Cos Inc. for $300 million last year, depicted Liggett as barely solvent and a minor tobacco group with just over one percent of the U.S. market.
Liggett, along with Philip Morris, RJ Reynolds Tobacco Co. and other companies, faces potentially massive punitive penalties from six jurors, who last year found the cigarette makers liable for conspiracy, fraud and the illnesses of as many as 500,000 or more smokers in Florida.
Forecasts of punitive damages in the Engle lawsuit, named for a Miami Beach pediatrician with emphysema, go as high as hundreds of billions of dollars. The awards are certain to be appealed and pose no immediate financial threat to the industry, analysts have said.
The jurors have wide discretion in apportioning financial punishment, a fact that has prompted America's leading cigarette executives to personally plead their cases over the past several weeks by detailing anti-smoking efforts and their finances.
LeBow testified that some three-quarters of Liggett cigarettes were made for small, no-name labels or chain stores such as Speedway America. Liggett does no advertising and targets its cigarettes only at current smokers, he said.
Asked by Liggett attorney Aaron Marks why he did not simply exit the tobacco business, given his declarations cigarettes were addictive and deeply harmful, LeBow said he wanted to remain a thorn in the U.S. cigarette industry's side.
``It's very important that we stay in the business, that we be the maverick of the industry, so we can beat up on the rest of the industry and make them do the right thing,'' LeBow said.
He also said other cigarette makers would pick up Liggett's sales and there would be no reduction in smoking.
LeBow, a Miami financier who bought control of Liggett in 1987, broke ranks in the mid-1990s with Big Tobacco and settled separately with state governments suing the industry for the medical costs associated with sick smokers.
As part of those deals, LeBow has testified for plaintiffs in more than a half dozen anti-tobacco lawsuits and labeled all Liggett-made cigarettes with the industry's strongest health advisory: ``Warning: cigarettes are addictive''.
The state governments, in part helped by LeBow and documents produced by Liggett, struck deals for big cigarette makers to pay $246 billion over 25 years and to curb advertising and marketing of tobacco.
LeBow said he decided to strike his deals in 1996 and 1997 after determining Liggett's liabilities were mounting and that the industry no longer could expect to win every lawsuit, as it had for 40 years.
LeBow, who testified he owns about $175 million of Vector Group shares, said defendant Liggett's net worth at the end of 1999 was $33.7 million and the unit could borrow another $5 million.
A massive punitive damages award against Liggett would drive the cigarette maker into liquidation, he said.