Tobacco Industry To Fight Verdict

Monday, May 15th 2000, 12:00 am
By: News On 6

MIAMI (AP) — Anti-smoking activists are looking for a day of reckoning for an industry they say must be penalized. Big Tobacco says no more punishment is needed.

A Florida jury that already found cigarette companies conspired to sell a dangerous product will now begin considering a possible punitive penalty.

Circuit Judge Robert Kaye was expected to be asked today to decide on a chunk of motions that have accumulated since he went on vacation two weeks ago. If everything can be resolved quickly, opening statements could begin as early as Tuesday.

The jury decided last July that tobacco companies conspired to fraudulently produce a defective, dangerous and addictive product, and last month awarded $12.7 million in compensatory damages to three smokers.

The three smokers are being used to represent all of the estimated 500,000 ill smokers who are part of this class-action suit.

The tobacco companies plan to present its $250 billion settlement over 25 years with states and restrictions on youth marketing as proof that no more punishment is needed.

The industry's top executives are even expected to voluntarily testify under oath — something they rarely do. David Adelman, a tobacco analyst with Morgan Stanley Dean Witter, believes recent changes in the industry make their appearances important.

``They have a good story to tell. The people running these companies now are not the ones running the companies in the '50s when most of this alleged wrongdoing occurred,'' he said. ``They really and truly have reformed their business practices.''

Economists and actuarial experts also are expected to testify about the financial value of the industry. The industry intends to call a tobacco farmer and a convenience store owner to speak to the economic impact of a big verdict against the companies.

Using a conservative figure of 300,000 for the number of smokers actually covered by the class-action lawsuit, lead tobacco attorney Dan Webb noted in court that a punitive award of $500,000 each — low by today's standards — would produce a $150 billion verdict.

The potential for a record-setting punitive award was one of the reasons for a bill passed by the Florida Legislature this month. The industry will be allowed to appeal by posting a maximum $100 million bond, an exception to the standard appeal bond equal to about 125 percent of the verdict.

By Florida law, a verdict can't bankrupt a company, and a judge would be required to reduce an overwhelming award. Consequently, industry profits are what's at risk.

Anti-smoking activist Dick Daynard, a Northeastern University law professor, expects and hopes for a verdict in the tens of billions of dollars.

``I think the industry is worth roughly $100 billion, and I think a fair punishment is a nice big hunk of that,'' he said.

The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson, Lorillard Tobacco Co., Liggett Group Inc. and the industry's Council for Tobacco Research and Tobacco Institute.


On the Net:

Philip Morris:

R.J. Reynolds:

Brown & Williamson:



American Lung Association:

Action on Smoking and Health:

Tobacco Products Liability Project: