Philip Morris Cleared in Cancer Case
After two resounding legal defeats in Los Angeles, tobacco giant Philip Morris USA scored a victory Thursday when an L.A. County Superior Court jury found the company not responsible for the lung cancer of a longtime smoker of its Marlboro and Benson & Hedges brands.
Capping a seven-week trial, the jury rejected five of six claims by Fredric Reller, 64, of Marina del Rey: negligence, failure to warn, marketing a defective product and two counts of fraud. The verdicts came on votes ranging from 12 to 0 to 10 to 2. Jurors voted 6 to 6 on a third claim of fraud, setting the stage for a possible retrial on that count.
The top U.S. cigarette maker had been hammered in two previous cases in L.A. County Superior Court, with jurors awarding lung cancer victims record-breaking punitive damages of $3 billion and $28 billion (later reduced to $100 million and $28 million, respectively) in cases now on appeal.
These and two other big plaintiffs’ victories in San Francisco had established a reputation for California courts as a killing ground for Big Tobacco. But the industry recently has won two other California cases: one in Sacramento and another in federal court in Oakland on a directed verdict by the judge.
Thursday’s victory in Los Angeles, where the once-invincible industry was considered the underdog, got a positive reaction on Wall Street. The news, announced after the close of markets, sent shares of parent company Altria Group Inc. up 98 cents to $40.99 in after-hours trading on the New York Stock Exchange.
“This is without a doubt a morale booster” for the industry, said Martin Feldman, a tobacco analyst with Merrill Lynch & Co. “This is the first win for tobacco in perhaps the most hostile environment in the country.” Philip Morris “has been spending vast resources and putting huge amounts of management time into trying to win in Los Angeles and San Francisco -- and this is the first time it’s happened.”
The result also was a first tobacco defeat for Reller’s attorney Michael Piuze, who had been victorious as lawyer for the plaintiffs in the first two Los Angeles cases.
Piuze said he felt “very bad for Mr. Reller” and expressed amazement that in rejecting two fraud claims, jurors voted 11 to 1 that Philip Morris had not made any misstatements concerning the risks and addictiveness of smoking. “Now that’s an incredible finding,” he said.
Beth Wilkinson, lead attorney for Philip Morris and a former Justice Department lawyer who prosecuted the Oklahoma City bombing case, said she was “thrilled” with the result. “I appreciate having 12 fair-minded jurors, and I think it shows they listened to the evidence,” she said.
The jury reached its verdicts after 5 1/2 days of deliberation -- and only after telling Judge Victoria Gerrard Chaney that it was deadlocked on all but two of the claims.
“The Jury is deadlocked. We have beaten the horse. It is long dead and has rotted and decomposed,” according to a note given the judge Wednesday. Chaney took the unusual step of ordering the lawyers to give abbreviated second closing statements Thursday morning. The jury then went back to work and ruled a few hours later. A court official said the second-closing procedure has been used rarely in California courts but is not unheard of.
Juror Adrienne Cedro-Hament, a Los Angeles County employee, told Reuters that jurors agreed that smoking caused Reller’s cancer but noted that he had been smoking for a decade before he switched to Philip Morris brands. “The question was,” she said, “how do you pinpoint it was Philip Morris?”
A self-employed operator of an equipment leasing firm, Reller began smoking in the mid-1950s at the age of 16. For about nine years his brand was Pall Mall, made by American Tobacco Co., later acquired by Brown & Williamson Tobacco Corp., which originally was a co-defendant in the case. Reller withdrew his claims against B&W; shortly before trial.
Reller became a Marlboro smoker in 1964 and switched to Benson & Hedges in the 1970s. He quit smoking in late 2000 at the age of 61, after learning that he had inoperable lung cancer.
The trial followed a familiar pattern of lawyers seeking to divert attention from the conduct of their clients while claiming dishonesty by the other side.
As he had in his previous victories over Philip Morris, Piuze used piles of documents to portray the firm as callous, deceitful and determined to maximize profit at the cost of its customers’ health.
Wilkinson, for her part, challenged testimony by Reller that as a conservative businessman distrustful of government, he had believed the tobacco industry was more truthful than health officials. This was a crucial issue because Reller had to show not only that he was lied to by Philip Morris but also that the lies had influenced his decision to smoke.
In a videotaped deposition played in court, Reller said that when cigarette makers challenged statements by the U.S. surgeon general, “I believed the tobacco industry.” He said he didn’t believe smoking could cause lung cancer “until I contracted lung cancer” in the fall of 2000.
He said that when he began encountering curbs on public smoking in the 1980s, he didn’t believe they were related to health risks. And he made attempts to quit only to humor his wife.
Knowledge of the risks of smoking “is so well-embedded in American culture,” Wilkinson said in closing arguments. And Reller “is a very intelligent man” and was not “living under a rock.” Yet “he wants you to believe that he is different from everyone you know.”
But Piuze said Reller, like other addicted smokers, was “a target of opportunity” for disinformation -- addicted to the point of denial and eager to grasp at any reason to go on smoking.
He repeatedly displayed documents that he said showed how Philip Morris and its industry allies had engaged in a conspiracy of lies to retain its customers by casting doubt on the risks.
Among other exhibits, he showed a 1964 letter from a Philip Morris director to then-Chairman Joseph F. Cullman, saying “we must ... give smokers a psychological crutch and a self-rationale to continue smoking.”
Piuze also cited a 1978 memo from the Tobacco Institute, a trade group of which Philip Morris was a member, stating that the industry had pursued a strategy “of creating doubt about the health charge without actually denying it.”
And Piuze cited 1998 testimony by then-Philip Morris Chief Executive Geoffrey Bible, who said, “I do not believe that cigarette smoking causes cancer,” and “I don’t know if anybody has died” as a result of smoking.
“It is inconceivable that anyone can tell you that the CEO of Philip Morris wasn’t perjuring himself in 1998” when he made those statements, Piuze said.
Piuze had asked jurors to award Reller $17 million in compensatory damages and to find Philip Morris guilty of malice.
