Big Tobacco after biggest jury award

In January, the industry faces another class-action suit in Louisiana. The plaintiffs are asking the tobacco industry to pay for the medical monitoring of 1 million smokers. It could cost the industry $10,000 per smoker.

As news of the huge judgments spread, so do the number of potential plaintiffs. After appearing on TV to talk about the Engle decision, Joe Cherner of Smokefree Educational Services Inc. started getting e-mails from smokers looking for legal counsel. Despite the Florida verdict Friday, it's still not easy winning claims against the industry. "It's no slam dunk, but it's no longer mission impossible," says Edward Sweda of the Tobacco Liability Project.

The tobacco industry says it's not worried about losing the Engle case: It expects the entire action to be overturned. "As the case now moves to the appellate courts, Brown & Williamson is 100 percent confident that the higher courts will reverse the Engle decisions, given the numerous errors committed during the trial and the significant constitutional issues involved in this case," says Gordon Smith, the company's lead lawyer. The jury assessed B&W $17.6 billion in damages.

Among the areas B&W expects to appeal:

*Certification of the case as a class action was wrong because tobacco claims turn on individual issues.

*The trial judge, Robert Kaye, was not impartial because, as an ex-smoker with a medical condition, he is a member of the plaintiff's class. In his rulings, he excluded many smokers from serving as jurors, since they too would be potential members of the class.

*The judge allowed the plaintiffs to argue that cigarettes should not be legal products.

At this point Wall Street analysts think the industry has good grounds to win on appeal. The stocks of Philip Morris Cos., RJ Reynolds Tobacco Holdings Inc., Loews Corp., and Vector Group did not drop much on Friday after the decision was announced.

Even antitobacco advocates agree it's likely the damage award will be reduced on appeal, which could take two to three years. Awards in other tobacco liability cases have been reduced recently. "Even if it is lowered, it's still a huge amount of money," says Mr. Sweda.

Whether the industry ends up in bankruptcy may depend on the next phase of the case - and the size of the bond it has to post during appeal. Last year, the Florida legislature passed legislation limiting bonds to $100 million per company. But questions exist about whether it can be retroactively used in the Engle case. If the plaintiff's attorney, Stanley Rosenblatt, challenges the legislation and wins, the industry would be forced to post $145 billion, plus 20 percent.

(c) Copyright 2000. The Christian Science Publishing Society

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