As Tobacco Litigation Goes, Castano Suit Is Super Bowl

At Emeril’s, a fashionable eatery near the French Quarter, several lawyers involved in a huge class-action suit against the tobacco industry were in their usual high spirits when they saw a nearby diner giving them the eye.

Knowing that the cigarette makers had retained some of the city’s top legal defense firms, they thought the well-dressed stranger just might be a spy. When they broke the ice, however, the curious neighbor turned out to be a cardiologist at nearby Tulane University and an unabashed fan of the anti-smoking cause.

“Will you testify for us?” one of the lawyers yelled above the din.

“Absolutely,” the man called back.

For the lawyers, small encounters like this reinforce their growing sense that they are about to make history by scaling a wall of virtual legal immunity that has surrounded the nation’s tobacco industry for decades.

While the nation’s cigarette makers have crushed their opponents throughout more than 40 years of tobacco litigation, the so-called Castano suit, pending in federal court here, represents a sobering new challenge to the industry.

Armed with a novel legal theory, an ample war chest and an assault force of unprecedented size, 60 law firms from Los Angeles to Boston are seeking damages for all smokers alleged to be addicted to nicotine now or formerly--a vast class potentially numbering 30 million to 100 million people.

The $50-billion-a-year tobacco industry denies its products are addictive, noting that millions of smokers have quit cold turkey. But should the suit succeed, experts say tobacco firms could be liable for billions of dollars in damages and could be driven into the bankruptcy courts.

In a case in which sports cliches flow freely, Castano looms as a litigation Super Bowl and World Series rolled into one. And as befits the giant stakes, the plaintiffs’ team includes a raucous assortment of larger-than-life characters--a veritable all-star team of contingent-fee attorneys whose success in product-liability and mass-disaster cases has made them detested figures in corporate America.

They have cleaned up against makers of asbestos, exploding Pintos and the Dalkon Shield. Whenever hotels have burned, trains have derailed, or airplanes have dropped from the sky, they have won millions for their clients and themselves. Having secured their reputations as masters of disaster, they say they are seeking to punish the tobacco industry for the greatest disaster of all--the heavy toll of disease and death from smoking.

Among them are Wendell H. Gauthier, a power in New Orleans’ legal and business circles who has embraced the case as a personal crusade, and the irrepressible John P. Coale, notorious for reaching disaster scenes with the speed of a heat-seeking missile.

With more wealth and staying power than their predecessors, the Castano lawyers also have benefited immensely from leaks of secret industry documents concerning the importance of nicotine in tobacco use.

Their suit contends that tobacco firms have long known their products were addictive, but concealed the fact and managed nicotine yields to keep customers hooked--until millions smoked long enough to contract disease.

Previous cases have focused on lung cancer and other ailments that had long been linked to smoking, allowing the cigarette makers to argue that smokers were fully warned and assumed the risks. Because evidence concerning addiction is of more recent vintage--and the industry denies its validity even now--the Castano lawyers believe that juries will be receptive to addiction claims.

Should the case succeed, damages would not be based on the health complaints of smokers, but on the estimated financial costs of their addiction--that is, how much they spent feeding their habit or trying to quit.

Already, the case has scored one notable success, spoiling the industry’s bragging rights to a record of never settling or losing a smoking case.

In March, Liggett Group, the smallest of the U.S. cigarette makers, settled the Castano case and suits filed by several state attorneys general to recover costs of treating smoking-related ailments. In the settlement, Liggett agreed to spend millions of dollars to fund quit-smoking programs and to comply with marketing restrictions sought by the Food and Drug Administration, which the industry has challenged in court.

But industry officials describe the Liggett settlement as a temporary setback--noting that it will be voided if the rest of the companies prevail in court, as they expect to do.

Tobacco lawyers say the suit is little more than an artful repackaging of claims that juries have rejected in the past. Said Richard A. Schneider, an attorney with King & Spalding of Atlanta, which represents Brown & Williamson Tobacco Corp.:

“They’ve tried to craft a case that’s based on notions like, someone should be surprised that nicotine is in cigarettes--that it is surprising that some people find it difficult to quit smoking and that you could wrap those kinds of observations in an allegation of addiction and say that is a new claim.”

A crucial stage in the 2-year-old case could be reached in a matter of weeks, when the U.S. 5th Circuit Court of Appeals decides whether to uphold a district court ruling allowing the Castano lawyers to represent everyone alleged to be nicotine-addicted.

The tobacco firms appealed the lower court ruling--contending, among other things, that the sheer number of class members and conflicting laws in their home states would make the case unmanageable.

Some signs point toward the industry winning on appeal. Recently, a federal appeals court in Philadelphia rejected a proposed class-action settlement in a massive asbestos case. And observers point to the conservative makeup of the three-judge panel in the Castano appeal--all Ronald Reagan or George Bush administration appointees.

But the Castano lawyers say they are in it for the long haul, no matter what happens on appeal. They say they have been contacted by 10,000 smokers who want to take part--and, if necessary, will file a series of smaller class actions or flood the courthouses of the United States with individual claims.

“We’ve got another way to make ‘em bleed,” one of the lawyers said.

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The 60 Castano firms have paid to play. All have agreed to ante up $100,000, and some have spent several times more in staff time and expenses. Although scattered in 19 states, the lawyers work through committees to handle such tasks as choosing expert witnesses, conducting legal discovery and dealing with the press.

Their headquarters, the Energy Centre, is a granite-and-glass high-rise overlooking the Louisiana Superdome and a wide bend in the Mississippi River, where 14 lawyers and 19 support staffers occupy a warren of offices on the 29th and 30th floors. Amid wall posters of vintage tobacco ads (“More Doctors Smoke Camels”), the staff has analyzed and scanned into computers about 750,000 pages of documents obtained from the industry and prior court cases.

They have a long way to go. In a recent week, the staff was sifting through eight cartons of Philip Morris Co. Inc. records--a windfall provided by a Richmond, Va., woman, whose ex-boyfriend, a former Philip Morris executive, had stored the papers in her basement. Meanwhile, other Castano lawyers were poring over 54 boxes of R. J. Reynolds Tobacco Co. documents at the offices of Reynolds’ local counsel.

Leading the charge is Gauthier, from suburban Metairie, who filed the suit in March 1994, after his close friend and fellow lawyer Peter Castano, a longtime smoker, died of lung cancer at the age of 47.

Castano was “my absolute best friend,” Gauthier recalled. “You know, your relatives you’re born with. Your friends you select.”

Even so, Gauthier said he was in a quandary when Castano’s widow, Dianne, asked him to file suit. Gauthier had seen plenty of law firms driven to the brink of bankruptcy in fruitless attacks on the tobacco industry, and he had come to believe conventional claims were doomed.

According to Gauthier, two nearly simultaneous events in early 1994 inspired him to go forward.

One was an ABC-TV “Day One” report suggesting that tobacco firms controlled nicotine levels to keep smokers hooked. The other was the FDA announcement that it was considering regulating tobacco products because of growing evidence of nicotine manipulation.

A disarming man with a puckish smile and soft Cajun drawl, the 53-year-old Gauthier is a partner in the New Orleans Saints pro football team and a bankrupt local gambling casino, and a confidant of former Louisiana Gov. Edwin W. Edwards. With his elegantly tailored suits and monogrammed shirts, Gauthier’s Lincoln Continental (his Jaguar and Rolls-Royce were destroyed by flooding last year) seems almost declasse.

Gauthier grew up in tiny Iota, La., a speck on the map where his family, he says, was lower middle class. He worked his way through the University of Southwestern Louisiana, and with earnings from a drivers education school he founded, put himself through law school at night.

For a time after passing the bar, Gauthier continued teaching drivers education while prospecting for clients.

His legal career took off with several high-profile cases, including a grain elevator explosion, a jetliner crash in Kenner, La., and fatal hotel fires at the MGM Grand in Las Vegas and Dupont Plaza in Puerto Rico.

“Wendell’s nothing but a little Cajun country boy who made good,” said Ernest Perry, Gauthier’s card-playing buddy and, with Dianne Castano, one of two named plaintiffs in Castano.

“He has a big heart,” Perry said. “He’s the same person he was 25 years ago--except now he has quite a bit more money.”

Gauthier has recruited a team of brash and wily allies. There is Stanley M. Chesley of Cincinnati, who negotiated the $180-million settlement of Agent Orange health claims by Vietnam War veterans. There is asbestos litigation king and renowned trial lawyer Ronald L. Motley--a gifted communicator whose weapon of choice is ripping sarcasm.

There is Russ M. Herman of New Orleans, a portly, voluble former president of the Assn. of Trial Lawyers of America, whose mother’s great-aunt was poet Emma Lazarus. And there is Herman’s onetime adversary, John Coale.

Coale, 49, is a Washington lawyer who has sold movie rights to his life story. Rewind the tape to 1984, when Coale is an obscure lawyer in the nation’s capital. A chemical leak at a Union Carbide plant kills thousands of residents of Bhopal, India. Coale scurries for a plane, and, as the first U.S. lawyer on the scene of the worst industrial accident in history, signs up more than 60,000 clients.

Fast-forward to 1991, when a North Carolina poultry plant fire kills 25 people. The enterprising Coale is charged with violating a state law that protects grieving families from ambulance chasers, and a warrant is issued for his arrest. This proves a minor nuisance, as Coale begins meeting with his clients across the state line in South Carolina.

During Herman’s term as ATLA president several years ago, he reviled Coale as a “cesspool” whose aggressive pursuit of clients was bringing dishonor on the profession.

Today, these former combatants sit together on the Castano executive committee--and profess mutual admiration. Explained Herman:

“When you are fighting the Evil Empire, and you can get Darth Vader [on your side], he becomes a white knight. He [Coale] is politically astute, he’s legally astute. Like most Machiavellians, he really has a Renaissance mind.”

Castano lawyers express genuine surprise at how well they get along.

Gauthier, they say, has proved a master at taming monster egos that are accustomed to the limelight and getting their way. “He’s [Gauthier] a fabulous politician,” Coale said.

Gauthier acknowledged his skills as an organizer and peacemaker. But he said it helps that the Castano case “is a cause” that has unified his team.

Indeed, the Castano attorneys bristle at the notion they are merely out for another big score. Instead, they profess a mix of motives that, like good gumbo, are far more subtle and complex.

One is the prospect of making legal history by vanquishing a hitherto unbeatable foe.

“I want to do some high-profile things that will make a difference . . . and not just protect the status quo’s money,” said Don Howarth of Howarth & Smith, one of three Southern California firms in the Castano case. “I’ve raised my kids, and if I go broke doing this--what the heck.”

Others have suffered the loss of friends or family from diseases linked to smoking. Besides Gauthier, Motley’s mother died of emphysema, Castano lawyer Ken Carter’s mother died of lung cancer and lawyer Robert L. Redfearn’s father died of cancer of the larynx.

If the lawyers are in it for the money, quipped Herman, “then we must be the dumbest sons of bitches that ever lived. I don’t know anybody in these cases that ever made a nickel.”

The truth, Herman said, is “we want to . . . kill a dragon.”

Exposing the dragon’s fangs through well-planned leaks to the press has been a major focus for the Castano lawyers and others with pending cases against the industry. The result has been what Motley termed “revelation du jour”--a steady stream of damaging disclosures that have made headlines coast to coast, encouraging defectors, leakers and whistle-blowers to step forward.

“It’s an avalanche,” Motley said.

“You start with one little rock picking up snow, and pretty soon you have half a mountain falling on your head.”