Florida Judge Upholds $145B Award

Miami-Dade County Circuit Court Judge Robert P. Kaye yesterday upheld a $144.87 billion punitive-damage award, the most expensive in U.S. history, against the nation's five largest cigarette producers, the Wall Street Journal reports. Lawyers for the cigarette makers argued that the large award was illegal under a "Florida law [that] prohibits punitive damage judgements that would bankrupt companies" (Fairclough/Geyelin, Wall Street Journal, 11/7). In affirming the award, Kaye rejected industry demands for a new trial, but also "[set] the stage for lengthy appeals battles." In July, after a two-year trial, the six jurors approved the award after considering the "conduct" of the tobacco industry and the "harm caused by cigarette smoking." In ruling in favor of the verdict, Kaye also rejected a series of motions filed by the tobacco companies requesting that the verdict be reduced or overturned. Without hearing oral arguments, Kaye wrote in his decision that the award was reasonable, "considering the scope of the behavior by the defendants, and the number of people affected thereby" (Wall Street Journal, 11/7). In his 68-page ruling, he noted the large award may seem "far outside the comprehension" of rational thinking, but the "enormity of the 70 years of behavior and the almost incomprehensible damage that was done to ... an ill-informed and unsuspecting public" make the tobacco companies' actions look like "concerted behavior." That behavior, rather than the amount of the award, "shocks the conscience of the court," Kaye said (Levin/Weinstein,
Los Angeles Times, 11/7). He added that the companies "failed to offer proof" that the large ruling would bankrupt them. The Wall Street Journal reports the companies are unlikely to be in "imminent peril." Under Florida law, the bond they need to post in order to appeal is capped at either $100 million per company or 10% of a company's net worth, whichever is lower. Lawyers for the tobacco companies say they will appeal the case, mounting "the broadest attack on the verdict in the shortest amount of time." William Ohlemeyer, Philip Morris's general counsel, said the firms would "challenge the constitutionality of the trial" and Kaye's "decision to certify the case as a class action" (Wall Street Journal, 11/7). R.J. Reynolds Tobacco Co.'s deputy general counsel Daniel Donahue said, "We remain confident that the ... verdicts will be reversed and, ultimately, the class action decertified" (Los Angeles Times, 11/7). Stanley Rosenblatt, who represents the smokers in the case, called the ruling "great," adding, "I don't think any punishment is too great for an industry that has caused the kind of injury for so long that they have" (USA Today, 11/7).

The ruling by Kaye comes as two companies, Lorillard Tobacco and the Liggett Group, are attempting to reach a settlement in a separate class action lawsuit filed in federal court. The Washington Post reports that the companies hoped to limit the damages in the Florida case and end future class action lawsuits. The proposed settlement deal would require the two firms to pay $8 billion over 30 years and would exempt them from future court damages. U.S. District Judge Jack Weinstein is overseeing the negotiations, but now that the Florida verdict has been upheld, the outcome is uncertain. Some legal scholars believe Weinstein could "legally impose the terms of a nationwide deal on state and federal courts" (Grimaldi, Washington Post, 11/7). If Weinstein approves the settlement, his decision "could supersede" the Florida case, as federal judges may block other proceedings that could "jeopardize a settlement in their courts." But some public health officials and attorneys say such a ruling "wouldn't hold up in court." Plaintiffs' attorney Rosenblatt said, "It is just a con; it is a ludicrous absurdity. We have a final judgment. None of the class actions have been certified and none have gone to trial. I don't think Judge Weinstein wants to go down in history as the judge who laid down for the tobacco industry." Other tobacco companies have not expressed interest in joining the case. Brown & Williamson spokesperson Mark Smith said, "We have no interest in starting a process that is doomed to fail structurally, practically and economically." Negotiations are continuing while Weinstein holds "extensive hearings" on industry "conduct" (Washington Post, 11/7).