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Florida smokers lose big payout

A court discards the $145-billion verdict thousands of plaintiffs won against big tobacco.

By Associated Press
Published May 22, 2003

MIAMI - A state appeals court Wednesday threw out a record-shattering $145-billion verdict won by thousands of Florida smokers against the tobacco industry, saying the case should not have been tried as a class-action lawsuit and concluding the award came from a "runaway jury."

The 3rd District Court of Appeal said the smokers did not have enough in common to pursue a single lawsuit against the nation's five biggest cigarettemakers. It also said misconduct by the plaintiffs' attorneys led the jury to "disregard the law" and return an award that would bankrupt the industry.

By eliminating class-action status, the three-judge appeals panel discarded the damages awarded by a Miami-Dade County jury in 2000 after a two-year trial. Individual awards were also thrown out.

"This decision clearly shows we were right when we said it was inappropriate for this case to be pursued as a class-action," said Mark Smith, a spokesman for Brown & Williamson Tobacco Corp., whose cigarette brands include Kool and Lucky Strike.

William Ohlemeyer, vice president of Philip Morris USA, the maker of the industry-leading Marlboro brand, said the ruling "is in line with the country's legal mainstream."

The other defendants were Lorillard Tobacco, R.J. Reynolds Tobacco and the Liggett Group.

Attorneys Stanley and Susan Rosenblatt, who represented the smokers, were out of town and could not be reached for comment.

Their clients were devastated.

Janine Goluba, who lost her late mother's $3.5-million cancer award, said the ruling was "beyond my comprehension. . . . Lie, cheat, deceive and still be able to be on top."

Margaret Amodeo, whose husband, Frank, was awarded $5.8-million in compensatory damages for his throat cancer, said the couple were "very disappointed." He was too hoarse to talk.

Even with tobacco's victory, Philip Morris, Lorillard and Liggett are out $710-million. After the trial, the three companies agreed to pay that nonrefundable amount to keep Florida smokers from challenging a new state law that protects companies from having to post ruinous amounts in bond when they appeal verdicts.

The jury had decided that cigarettes are deadly, addictive and defective because they make people sick when used as directed. It set punitive damages for an estimated 300,000 to 700,000 smokers after deciding compensatory damages for Frank Amodeo and two other people with cancer who served as representatives of the group.

Under a plan outlined by the trial judge, the next step in the case was supposed to be individual mini-trials to decide whether and how much each of the rest of the smokers should get in compensatory damages.

But the appeals court agreed with the tobacco industry that the overall award would have violated state law by bankrupting the companies. And it said the framework for the trial and the mini-trials was unconstitutional.

"The fate of an entire industry, and of close to a million Florida residents, cannot rest upon such a fundamentally unfair proceeding," the panel wrote. "Our system of justice requires more."

The court said individual lawsuits would be more efficient than the class-action, and the smokers are free to pursue that option.

"Absent intervention by the Florida Supreme Court, this would appear to be a terrible blow to the class of sick smokers in Florida," said Mark Gottlieb, an attorney with the antismoking Tobacco Products Liability Project at Northeastern University law school.

He called the decision "very surprising" because before the trial, the same appeals court in 1996 said the case could be tried as a class-action.

The appeals court singled out Stanley Rosenblatt for making racially charged appeals to black jurors by referring to slavery and the Holocaust while discussing the sale of cigarettes.

The court also said the way Liggett was punished illustrated how the jury had "run amok." The jury ordered the company to pay $790-million in punitive damages - an amount 23 times its net worth - when it shouldn't have had to pay anything, the court said.

The jury "was obviously swept along in lemming-like fashion to find all the defendants responsible because they participated in the tobacco industry," the panel said. "This is not the law. Mere participation in the tobacco industry does not destine a corporation to legal suicide upon the shores of bankruptcy."

Philip Morris hopes the decision will bolster its challenge to a $10.1-billion verdict in a class-action lawsuit by 1.1-million Illinois smokers who claimed they were tricked into believing light cigarettes were less harmful than regular brands.

Since the Florida case began, many other courts have denied class-action status for lawsuits filed by smokers. The largest jury awards for individual smokers suing tobacco companies have been cut down by judges as well.

In October, a Los Angeles jury ruled that Philip Morris should pay $28-billion to a 45-year smoker with lung cancer. A judge later slashed the award to $28-million.

The previous record for a verdict won by an individual against a tobacco company was $3-billion, awarded in June 2001. A California judge later reduced that to $100-million.

Reduced awards

Some large awards in tobacco lawsuits that were later reduced:

MAY 2003: Florida appeals court throws out record-setting $145-billion verdict for thousands of Florida smokers against tobacco industry, saying case should not have been tried as a class-action lawsuit.

DECEMBER 2002: Los Angeles Superior Court judge reduces $28-billion punitive damage award to $28-million in case against Philip Morris. Plaintiff Betty Bullock, 64, of Newport Beach, Calif., was diagnosed with lung cancer in 2001.

AUGUST 2002: Los Angeles Superior Court judge reduces $3-billion punitive damage award to $100-million in case against Philip Morris. Plaintiff Richard Boeken, 56, of Topanga, Calif., died of lung cancer in January 2002.

MAY 2002: Multnomah County (Ore.) circuit judge reduces $150-million punitive damage award to $100-million in case against Philip Morris. Family of Michele Schwarz, 53, of Salem, Ore., sued after Schwarz died from lung cancer in July 1999.

MAY 1999: Multnomah County circuit judge reduces $79.9-million punitive damage award to $32-million in case against Philip Morris. Family of Jesse Williams, 67, of Portland, Ore., sued after Williams died of lung cancer in March 1997.

APRIL 1999: San Francisco Superior Court judge reduces $50-million punitive damage award to $25-million in case against Philip Morris. Patricia Henley, 52, of Los Angeles, was diagnosed with inoperable lung cancer in February 1998.

The defendants

The nation's five biggest cigarettemakers.

BROWN & WILLIAMSON TOBACCO CORP.

Cigarette brands include Kool and Lucky Strike.

Market close: Parent company British American Tobacco was up $1.66 to $21.36

LORILLARD TOBACCO

Cigarette brands include Kent and Newport.

Market close: Parent company Loews Corp. was up $1.76 to $44.04

PHILIP MORRIS USA

Cigarette brands include Marlboro, Virginia Slims and Benson & Hedges.

Market close: Parent company Altria Group was down 5 cents to $34.88.

R.J. REYNOLDS TOBACCO

Cigarette brands include Camel, Winston, Salem and Doral.

Market close: Company was up $1.59 to $33.30

THE LIGGETT GROUP

Cigarette brands include Jade and Eve 120's.

Market close: Parent company Vector Group Limited was up $1.02 to $15.26.

[Last modified May 22, 2003, 06:40:14]


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