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July 17, 2000 -$145 Billion Award Against Cigarette Makers Sets Record

July 17, 2000 -$145 Billion Award Against Cigarette Makers Sets Record

Altogether tobacco companies could pay nearly $145 billion in punitive damages, making it the largest damages award ever. The Miami jury awarded $73.96 billion against Philip Morris, $36.28 billion against R.J. Reynolds, $17.59 billion against Brown & Williamson, $16.25 billion against the Lorillard Tobacco Co. and $790 million against Liggett Group.

The Council for Tobacco Research was also found liable for $1.95 billion and the Tobacco Institute was found liable for $278,339. Both the industry-funded organizations are now bankrupt. Stanley Rosenblatt, who represented the class of 300,000 or more Florida smokers, had told jurors the cigarette makers should pay between $123 billion and $196 billion in punitive damages. Defense lawyers for tobacco companies said the companies could only pay between $150 and $375 million.

Also, while the trial was under way and as a result of pro-tobacco lobbying, Florida enacted legislation reducing the amount of bond each defendant would have to post pending appeal, from 120 percent of the award to a maximum of $100 million.

Last year, the same six jurors decided that the tobacco companies made dangerous products, conspired for decades to hide the health risks of smoking, and were liable for the illnesses of 300,000 or more smokers in Florida.

In April, they awarded a record $12.7 million in compensatory damages to three plaintiffs. Dan Webb, the attorney for Philip Morris, said the verdict could become final only after the trials of several hundreds of thousands of class members.

He told reporters that "It could take approximately 75 years, assuming that Florida assigns approximately 100 judges and starts hearing the cases now."

Webb called the verdict the result of "an unfair procedure, unheard of in the American history." If the companies ever had to pay the awards against them, "every one of the five would be put out of business" since the companies total net worth is only $15 billion.

"The jury completely ignored the instructions that told them they could not financially destroy the companies," said Gordon Smith, lead attorney for Brown & Williamson.

This is why attorneys for R.J. Reynolds Tobacco Company said that the punitive damages award had reconfirmed their confidence that the case would be overturned on appeal.

"Today's unrealistically high punitive award in the Engle trial is the latest example of why this case is so likely to be overturned upon appeal," said Daniel W. Donahue, senior vice president and deputy general counsel for Reynolds Tobacco. "It exemplifies the legal problems that have riddled this case from its inception."

He said there were a number of errors in the conduct of the trial, but the fundamental issue of whether smokers should be treated as a class would be at the heart of the appeal.

The U.S. Supreme Court had previously held that when it comes to economic damages The amount of punitive damages could be disproportionate as to violate the due process of law.

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