Court tosses tobacco verdict
The state Supreme Court decides that a landmark $145-billion punishment was too broad, and now smokers will have to sue individually.
By CHRIS TISCH
Published July 7, 2006
TALLAHASSEE - The Florida Supreme Court on Thursday scrapped the largest jury award in American history, the $145-billion given to 700,000 Floridians in a class action suit against tobacco companies.
Each person in the class had unique health issues that should have been weighed at individual trials, the court ruled.
But the court also upheld key points against the companies, including that cigarettes are addictive and cause health problems and that the companies for years misled the public about those dangers.
"Technically it's a mixed bag, but if you had to pick one side over the other, I would definitely have to say the tobacco companies are much happier," said Michael Allen, a professor at the Stetson University College of Law.
Wall Street seemed to agree, sending tobacco stocks up after the decision was released Thursday morning.
It also benefited states that cut a deal with tobacco companies in the 1990s. The jury award was so large it jeopardized payouts to the states.
The decision allows the 700,000 Floridians in the class action suit to file individual lawsuits against tobacco companies. But it gives them only about a year to do that and they might find it difficult to find lawyers willing to take on big tobacco.
"The sheer magnitude of the number of people and the logistics are just so daunting," said Ellen Vargyas, general counsel for the antismoking group the American Legacy Foundation.
The tobacco companies argued that the judgment would cripple or bankrupt them.
Florida's agreement with the tobacco companies calls for payments of about $11-billion over 24 years. That money is now safe, said Steve Yerrid, a Tampa lawyer who helped broker the deal.
"It would have been ruinous to tobacco companies," Yerrid said of the $145-billion award. "And I want them to stick around long enough, not necessarily to keep selling cigarettes, but to pay their debt to society."
The case began in the mid 1990s when a Miami judge allowed 700,000 sick smokers or surviving family members to sue tobacco. Three trials were held for three plaintiffs believed to be typical of the pool.
The jury awarded the following compensatory damages: $2.85-million to Mary Farnan of Inglis, a former nurse who got lung cancer and brain cancer after 29 years of smoking; $4.023-million to Angie Della Vecchia of New Port Richey, who died of cancer just three weeks after the verdict; and $5.8-million to Frank Amodeo, an Orlando man who got cancer of the head, neck and larynx after years of smoking.
The class-action trial lasted two years. When it ended in 2000, the seven jurors deliberated less than five hours before awarding $145-billion in punitive damages to the class-action plaintiffs.
But in 2003, an appeals court called it the work of a "runaway jury" that had been "swept along in lemming-like fashion" by improper arguments. The Florida Supreme Court spent more than a year reviewing the case.
The justices upheld the appeals court's decision, calling the $145-billion payout excessive.
A majority agreed to reinstate the awards to Farnan and Vecchia, but denied Amodeo's award because it fell outside the statute of limitations.
Farnan said she had mixed emotions. "I'm very happy with the outcome as far as my personal case," she said. "I wish everyone could have gotten something."
The court ruled that each person's health history was unique, so a class-action suit was not justified.
"You have different individuals with different health histories and different personal health practices," said Chris Griffin, a Tampa lawyer who specializes in appellate practice. "Is this somebody with other contributory ailments? Or maybe they lived in a place where they were exposed to things that could have contributed to their ailment."
But the court's affirmation that cigarettes are an addictive health threat, along with its finding that the company misled the public, could be used against the tobacco companies in future lawsuits.
"I think it gives the plaintiffs a lot of traction," said Northeastern University law professor Richard Daynard, who has fought the tobacco industry for years.
Philip Morris vice president and associate general counsel William S. Ohlemeyer said the company disagreed with that part of the decision but is still studying whether to appeal .
So will 700,000 Floridians sickened by cigarettes start scrambling for lawyers?
"We know there are lawyers ready and able to bring those cases," Daynard said. "I think there will be warriors throughout Florida who will be willing to bring these cases and win them, because the court has really set out a road map for doing so."
Others aren't so sure.
A lawsuit against tobacco companies requires a lot of resources. The chance of victory isn't great and the judgments haven't been that large, said Bob Levy, a senior fellow at the Cato Institute.
"When the pot has shrunk in size to mere millions of dollars, you won't get nearly the legal talent devoted to the pursuit," Levy said.
Bruce Denson, a St. Petersburg lawyer who has been involved in seven trials against tobacco companies, said lawyers likely will take only the most winnable cases, picking plaintiffs who began smoking before warning labels and had otherwise healthy lives.
"There are very few attorneys who will take these cases," said Denson, whose clients have prevailed in three of the cases he has helped try. "Tobacco companies, in litigating these cases have two goals. One is to win the case and two is to make it as miserable as possible for the plaintiffs."
Times researcher Angie Drobnic Holan contributed to this report, which used information from the Associated Press.