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More Anti-Tobacco Verdicts Forseen

February 11, 1999

NEW YORK (AP) _ A California jury’s record-shattering $51.5 million verdict against Philip Morris for deceiving a sick smoker about the dangers of cigarettes could prompt a new flood of lawsuits and higher and higher penalties.

The tobacco industry’s own multibillion-dollar settlement offers in other suits have served as a public admission of guilt, some analysts said Thursday. Compounding the problem are new disclosures of incriminating industry documents that plaintiffs’ lawyers are eager to present to juries.

``When tobacco companies start offering billions of dollars of settlements, juries lose their sense of how much is a lot,″ said David Logan, a law professor at Wake Forest University who specializes in product liability.

That was clear in the case of Patricia Henley, 52, a former three-pack-a-day smoker who has inoperable lung cancer. Though her attorney, Madelyn Chaber, had asked for $15 million in punitive damages, the jury awarded $50 million, plus $1.5 million in compensatory damages. It was the first case to go to trial since California repealed a ban on individuals’ lawsuits against tobacco companies.

Jury foreman George Loudis said Thursday some jurors wanted to go even higher.

``I accused a lot of them toward the end of losing touch with reality,″ he said. ``One woman said she contemplated $1 billion. ... I mean the numbers just flowed out of their mouths.″

Philip Morris attorneys said the award stemmed from the ``passion and prejudice″ of the jury and plans to appeal.

Only three other times have juries awarded smokers damages in health claims against tobacco companies and all of them have been overturned on appeal.

Up until this case, the largest verdict was $1 million awarded to the family of Roland Maddox, who died in 1997 of lung cancer after smoking for 50 years. A Florida appeals court threw out that verdict earlier this month.

Still, some experts say Henley’s case marks a change of fortune for cigarette makers because of the change in environment.

Cigarette makers recently agreed to pay $246 billion to settle claims by states seeking to recover the health care costs of treating sick smokers. And sick smokers now have the benefit of sensitive industry documents _ forced into the public by states’ lawsuits _ showing tobacco companies tried to hide the ill effects of smoking.

``This is the first real lawsuit where you’ve had the entire record available to the jury,″ Logan said.

Tobacco company stocks fell for a second day Thursday after the verdict. Securities analysts had differing predictions on the outcome of individual suits against the industry.

Martin Feldman of Salomon Smith Barney said investors generally are more nervous about lawsuits by a large group or government rather than those of individual smokers. Cigarette makers will still find success in court assailing scientific data and placing the responsibility with the smoker, he said.

``I believe that the industry’s defenses will generally prevail in the majority of individual cases that are brought in the future,″ Feldman said. ``But it would be a serious mistake to believe the industry is going to win every individual case.″

Jack Maxwell, however, counseled investors to steer clear of tobacco stocks. The analyst with Davenport & Co., whose Richmond, Va., office overlooks a Philip Morris plant, said the industry is at its most vulnerable point in history.

``Everybody’s taking a whack at them, from Clinton to the federal government, to trade unions,″ Maxwell said, noting there are 850 lawsuits currently pending against cigarette makers. ``I’m sure a lot of them are going to be thrown out, but there are still going to be some that are going to go forward.″

President Clinton recently announced he would follow the lead of states and sue the industry to over the costs of treating smoking illnesses. Several foreign countries whose residents have long smoked U.S. brands of cigarettes also have filed suits. And a class-action lawsuit on behalf of up thousands of smokers is currently in trial in Florida.

Because of the size of Henley’s award, analysts predicted a wave of lawsuits would follow, especially in California, a state which was among the first to ban smoking in some public areas and is home to many anti-tobacco lawyers.

``I would imagine that the tobacco executives are meeting at this very hour trying to figure out is it too late to clean up our act,″ said Richard Daynard, a Northeastern University law professor who has worked with states that sued the cigarette makers.

``I think really for the first time in their history they’re going to have to sit down and say maybe we should go for safer cigarettes, maybe we should go to plain packaging.″

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