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Back To Vidyya $144.8 Billion In Punitive Damages Awarded To Florida Smokers

Companies Vow To Appeal

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.

In the 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 Florida smokers.

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 per company.

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 million.

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 smoking. "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 courtroom. "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 appeal process.

"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 past.

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."

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Editor: Susan K. Boyer, RN
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