Tobacco Lawyers Back to Court After Shocking Ruling
MIAMI (Reuters) - Lawyers for cigarette companies and sick Florida smokers head back to court on Monday to figure out the next step now that the jury has awarded an astonishing $145 billion in punitive damages.
The trial judge must now decide whether to enter an order making final the amount that jurors said America's big cigarette companies must pay for making Florida smokers sick -- by far the largest civil damage award in U.S. history.
The jury in the class action found on Friday that cigarette companies knowingly made an addictive product that caused some 20 illnesses ranging from lung cancer and heart disease to miscarriage.
Miami-Dade County Circuit Court Judge Robert Kaye could cut the award in the so-called Engle case, and even the jurors expected that he or an appeals court would do so.
``I don't think the numbers are going to stick,'' juror James Strowbridge said in a CNN interview on Sunday.
Florida law prohibits damage awards so large they could bankrupt a company. Philip Morris attorney Dan Webb said on Friday the award was large enough to bankrupt the tobacco companies ten times over.
The jurors said they arrived at the $145 billion figure by averaging the awards suggested by individual jurors, which ranged from $100 billion to $200 billion. They then divided up the amount among the five defendants according to their U.S. market share.
``Knocked Off A Billion''
They gave the Liggett Group a $1 billion discount because Bennett LeBow, the head of its parent company Vector Group, broke ranks with the others back in 1996 and admitted that smoking is addictive.
``We knocked off a billion. We wanted to send a message that this is the way we wanted companies to be run,'' juror Gary Chwast told the Miami Herald.
Philip Morris, maker of Marlboro cigarettes, was ordered to pay $73.96 billion; R.J. Reynolds was ordered to pay $36.28 billion; Brown & Williamson, a unit of British American Tobacco Plc, was ordered to pay $17.59 billion; and Lorillard Tobacco Co, owned by Loews Corp., was ordered to pay $16.25 billion. Liggett, a unit of LeBow's Vector Group and by far the smallest of the five, was ordered to pay $790 million.
Once Kaye enters a final order, he would then order the tobacco companies to post a bond required by law as the appeals proceed. In May, after 19 months of testimony in the trial, the Florida Legislature capped such bonds at $100 million. The move was aimed at averting a potentially bankrupting bond payment that could prevent the tobacco companies from paying a separate $13 billion settlement to reimburse the state for public costs of treating sick smokers.
Under previous law, the companies would have had to post a bond equal to 120 percent of the damage award.
The case would then move into the appeals process, which is expected to take several years.
Plaintiffs' lawyers Stanley and Susan Rosenblatt have said they would appeal the bond cap, calling it unconstitutional.
Grounds For Appeal
The cigarette company lawyers have said they would appeal on dozens of grounds -- challenging everything from the certification of the case as a class action to whether jurors were tainted by newspaper reports about the tobacco companies' ability to pay.
The Engle case, named for Miami Beach doctor Howard Engle who blamed smoking for his emphysema, was the first class action lawsuit against the tobacco companies to go to trial. The cigarette company lawyers argued throughout that damages should be determined individually, not as a group.
Legal experts said it could be years before ailing smokers get any money because no individual judgements can be levied until the appeals conclude.
Richard Daynard, chairman of the Tobacco Products Liability Project at Northeastern University School of Law, said there was a good chance it would stand, given that some cigarette company appeals were heard as the trial progressed.
``The Florida's Courts of Appeal, as well as the Florida Supreme Court, have had ample opportunity to derail the Engle case, if they had been so inclined. Instead, these courts have quite properly refused to do so and have let the case proceed as a class action,'' Daynard said.
The class includes all Florida smokers and heirs of Florida smokers who have suffered or died ``from diseases and medical conditions caused by their addiction to cigarettes.'' Their numbers are estimated anywhere from 300,000 to 700,000.
If the verdict stands, at some point the court would set up a mechanism for them to file claims and supporting documents to receive part of the award. Lawyers would also have to decide how to divide the money, a complicated decision that was expected to take into account how long the plaintiffs smoked, what brands they smoked, and whether environmental, genetic or other factors could have contributed to their illnesses.