Clinicians treating smokers will be interested in the Florida tobacco ruling. The punitive damages in the case are so large, some in the industry claim it is the end of cigarette manufacturing and distribution. Does the case mean enforced smoking cessation for the world's smokers? Probably not.
largest damage award
in United States history, a jury
in Miami-Dade County ordered
the tobacco industry today to
pay $144.8 billion in punitive
damages to some 500,000
But even as some of the sick
smokers and the widows and
widowers of others celebrated
the verdict as a sweeping
victory over the industry,
tobacco executives called the
award ridiculous, and one that
would push the companies into
bankruptcy, if it is ever paid.
The companies vowed to
appeal, a process that could
take years. While those appeals
play out, the financial exposure
of the companies could be
relatively minimal. Under a law
passed last year by the Florida
Legislature with this case in
mind, cigarette makers could be
required to post an initial bond
of no more than $100 million
A judge may decide as soon as
Monday whether that law
applies in this case, since the
suit was filed before the law
was passed. In addition,
Florida law prohibits a damage
award that would force a
company into bankruptcy.
Experts on both sides had
debated whether such a
judgment would put the
companies out of business.
In today's verdict, Philip Morris
was ordered to pay $73.96
billion, followed by R.J.
Reynolds at $36.28 billion,
Brown & Williamson at $17.59
billion, Lorillard Tobacco at
$16.25 billion, and Liggett
Group Incorporated at $790
The punitive damages would
come on top of the $246 billion
the industry agreed in 1998 to
pay the states over 25 years in a concession that ended its record of
successful resistance to claims of damages.
The remainder of the $144.8 billion judgment was to be paid by the
Council for Tobacco Research and the Tobacco Institute, which had
provided false data that refuted medical research of the dangers of
"There is no industry in America, there's probably not a country in the
world, that could withstand a verdict of this size," said Dan Webb, a
lawyer for Philip Morris, the country's largest cigarette maker.
The six-member jury, which has weighed the different phases of the case
for two years, deliberated only five hours before reaching its decision.
"Lot of zeroes," said Judge Robert Kaye, who seemed slightly bemused
as he read the amount of the verdict.
Guillermo Saa, who has had his vocal cords and much of his throat
removed because of smoking-related cancer, became so emotional after
the verdict that he had difficulty breathing and had to leave the
"You can't imagine how happy I am," said Mr. Saa, one of the plaintiffs,
speaking with an electronic voice box. "My heart is happy, because this
is a lesson for them."
Lawyers for the plaintiffs said the huge verdict was an appropriate
punishment for an industry that makes a product that kills 430,000
Americans every year, and for misleading the public about the dangers
even after medical research showed that smoking causes cancer.
Judge Kaye can reduce the amount, but lawyers for the industry are
likely to appeal any award approaching the billions the jury voted for.
Lawyers for the five tobacco companies had said in closing arguments
that such a verdict would be a "death warrant" for the industry. But after
the jury's decision, the lawyers said that the judgment would have no
immediate impact because the size of the award guarantees a lengthy
"We are pleased, because there is no practical impact on Philip Morris,"
Mr. Webb said.
Sick smokers, some of whom have followed the case every day from the
courtroom pews, were optimistic about the outcome. The same jury had
found in July 1999 that the tobacco industry manufactured a deadly
product, and that it had deceived the public for years. In April, the panel
ordered cigarette makers to pay $12.7 million in compensatory damages.
All in all, the jury heard 157 witnesses.
In the punitive stage of the trial, sick smokers first asked for $196 billion
in damages. But the lead lawyer for the plaintiffs, Stanley Rosenblatt,
would eventually suggest an award of $154 billion to the jury.
He got almost what he argued for, give or take a few billion.
"It was a day of reckoning," Mr. Rosenblatt said. "This was never about
money. This was about showing these companies up for what they are."
Mr. Rosenblatt said the jury, which was made up of a postal worker, a
bank teller, a welder, a telephone technician, an assistant principal and
another school employee, "did the right thing."
"They said to those companies, 'Cut it out. Tell us the truth,' " Mr.
Rosenblatt said. "They were stoic, unemotional."
No matter what happens from now on, said Frank Amodeo, one of three
sick smokers who represented the 500,000 others in the class-action
lawsuit, the jury's verdict is the most significant victory so far in a fight to
make the companies acknowledge wrongdoing.
Mr. Amodeo was diagnosed with throat cancer about 10 years ago,
cannot swallow and must be fed through a tube. "There is no amount of
money in the world that will change the way I eat."
The case made history in other ways. Top executives for the companies,
who rarely testify under oath, took the stand to say that their companies
had changed, that they were spending millions to discourage under-age
smoking and were repentant of the way business had been done in the
Lawyers for the companies had said the cigarette makers could afford to
pay between $150 million to $375 million, but would be put out of
business if the jury granted anything approaching the requested award.
"You either destroy them or you don't," said Gordon Smith, a lawyer for
Brown & Williamson, in his closing argument. "Your verdict must reflect
current ability to pay."
But the amount of punitive judgment the industry said it could afford to
pay represents a fraction of its audited net worth, and could be recouped
in just a few days of wholesale cigarette sales, critics of the industry said.
Brown & Williamson, a unit of British American Tobacco, is valued at
$13.6 billion; Liggett, a unit of the Vector Group, is valued at $317
million; Lorillard Tobacco, a unit of the Loews Corporation, $6.2 billion;
Philip Morris, $56 billion; and R.J. Reynolds, $2.7 billion.
"We ask you to speak for all those silent, anonymous victims of tobacco
grieved by their loved ones but unknown to a callous and deceitful
industry," Mr. Rosenblatt said in his closing argument.
The ruling eclipsed the punitive damage award of $5 billion against Exxon
Mobil for the Exxon Valdez oil spill in Alaska, and a $4.8 billion award
against General Motors in a car fire in California, which a judge later
reduced to $1.09 billion.
It was, in fact, the largest award of any kind, much more than the $22
billion awarded in Hawaii in 1996 to a treasure hunter who sued former
President Ferdinand Marcos of the Philippines for an alleged theft of gold
bullion. That verdict was later overturned.
Joe Cherner, a former Wall Street executive who formed Smokefree
Educational Services, had testified for the plaintiffs on the industry's
ability to pay.
Mr. Cherner does not believe the plaintiffs will ever see any money.
"In this country, the guilty people don't always have to pay," he said.
"They were found guilty of lying, killing, causing diseases."
The award, he said, "will never amount to a hill of beans."
But the message, he said, will.
"These six ordinary people," he said, "have decided this industry is guilty
of the biggest fraud, deceit, maiming, killing, destroying and lying in the
history of mankind. Nothing will ever change that fact."