Jury Can Hear of Tobacco Cos. Loans
MIAMI (AP) _ In a setback for the tobacco industry, a judge ruled Wednesday that the jury considering punitive damages for sick Florida smokers can hear evidence about the industry’s borrowing power.
``Among the assets is its ability to borrow money,″ Circuit Judge Robert Kaye said. ``I don’t know why you can’t talk about that.″
The nation’s five biggest cigarette makers didn’t want the jury to consider anything beyond their present value because of the potential for inflating a multibillion-dollar damage award.
The jury already has ruled against the industry and awarded $12.7 million in compensatory damages to three smokers representing the state’s 300,000 to 500,000 smokers.
The two sides are far apart on the industry’s ability to pay. The industry is asking for no award at all, but plaintiffs contend cigarette makers can raise money to pay an award by raising prices.
Joe Cherner, an anti-tobacco activist called to testify, said the industry can afford to pay $117 billion based on the difference between a failed congressional package in 1997 and state lawsuit settlements in 1998. Payments are on a 25-year schedule.
With the jury out of the courtroom, a Philip Morris attorney said industry assets are less than $20 billion, the first time a number has been offered by the industry.
David Adelman, a tobacco analyst with Morgan Stanley Dean Witter, said he doesn’t think the stock market is ``going to be very excited or agitated″ about Kaye’s decision or any others in the case because he is convinced the case will be overturned on appeal. It is the nation’s first class-action by smokers to go to trial.
The defendants are Philip Morris, R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., Lorillard Tobacco Co., Liggett and the industry’s defunct Council for Tobacco Research and Tobacco Institute.
On the Net:
Tobacco links: http://www.umich.edu/(tilde)umtrn/websites.html