TOBACCO: Industry Liable in Class-Action Case — A First
After hearing nine months of testimony and deliberating for six days, a state-court jury in Miami yesterday found the country's largest tobacco companies liable "in the first class-action lawsuit on behalf of injured smokers to go to trial" (Geyelin, Wall Street Journal, 7/8). The verdict could result in the industry's "most dire courtroom loss"; plaintiffs are seeking $200 billion in the next phase of the trial (AP/Richmond Times-Dispatch, 7/8). The six-member jury found that "cigarettes are unreasonably dangerous, and concluded tobacco companies made false or misleading statements, concealed material information, conspired to misrepresent information about the health effects of smoking and acted with reckless disregard in selling cigarettes to Florida smokers" (Kidwell/Merzer, Miami Herald, 7/8). In accompanying analysis, the Herald reports that plaintiffs owe the verdict in part to a new strategy employed by their attorneys. Rather than attempting to place all the blame on the industry, the new tactic essentially tells the jury: "Yes, my client saw those warnings and is partially responsible for his own ill health. But surely an industry that (allegedly) conspired to hide the truth must share in the responsibility. So find the industry at least partially responsible" (Merzer, 7/8).
Largest Strategic Loss
Observers immediately pegged the case as tobacco's biggest blow ever. University of Miami law professor Clark Freshman said, "Until recently, it has been a mixed bag of verdicts. Most of the cases against tobacco have been one person or a small group who have either won or lost. Here, the tobacco industry has lost on all its central arguments against a whole state of smokers" (Miami Herald, 7/8). Other reactions:
- American Lung Association CEO John Garrison said, "The jurors have confirmed the industry's culpability in the suffering and deaths of Floridians lured into the use of a dangerous, addictive product. The momentum is clearly against Big Tobacco and for public health" (release, 7/7).
- The Campaign for Tobacco-Free Kids' Matthew Myers called it the "most widespread condemnation of the industry ... ever issued in any court ... regardless of whether a dime is ever paid out" (Torry, Washington Post, 7/8).
- Industry analyst Mary Aronson said, "The American public has been served a steady drumbeat of disclosures (about company policies), leaked documents, reports of bad faith. The same American public sits on juries. This is the result" (Willing, USA Today, 7/8).
Round Two: Pay Up
Dade County Circuit Judge Robert Kaye deprived the industry of its traditional line of defense, which focuses on warning labels and other evidence that may make individuals more culpable for their own actions. In the damage-setting phase of the trial still to come, however, the industry will be allowed again to try this defense (Wall Street Journal, 7/8). During the damages phase, nine smokers, each representing a different smoking-related disease, may take their individual cases to the jury. These mini-trials would be followed "by the rest of the class members, potentially numbering in the thousands. The cases may go to trial grouped by disease" (Gold, Ft. Lauderdale Sun-Sentinel, 7/8). In phase two, the industry will be able to focus the blame on individual smokers, rather than smokers as a class. Merrill Lynch's Emanuel Goldman said, "The plaintiffs have an uphill fight in phase two. It's a totally different animal than finding in general terms that cigarettes are bad for you" (Bloomberg/New York Post, 7/8).
Feldman said the industry may ask the judge to decertify the class-action when the first damages are awarded, as is sometimes done if judges "find that there are not enough common factors among class members or if they determine that the resolution of a case would be legally cumbersome" (Meier, New York Times, 7/8). The industry may also appeal the initial verdict, or attempt to settle the case out of court (Sun-Sentinel, 7/8).