Former Smoker Wins Pivotal Tobacco Case
In a major breakthrough in the legal assault on tobacco, a state court jury in Florida on Friday awarded a lung cancer victim $750,000 in damages from the Brown & Williamson Tobacco Corp.--the industry’s first real loss in more than four decades of cigarette litigation, if the verdict stands on appeal.
The surprise verdict, which relied partly on new evidence concerning the addictive properties of nicotine, could trigger a wave of new claims against the $50-billion tobacco industry, which is already under intense legal and political pressure.
The verdict in Jacksonville sent tobacco stocks plunging and stunned industry officials and financial analysts, who had viewed the recent flood of class-actions and mega-lawsuits by state attorneys general and gangs of plaintiffs’ lawyers as the greatest legal threat to the industry.
By contrast, the Florida case involved a single plaintiff, Grady Carter, and the seemingly failed strategy of filing suits on behalf of individual smokers.
Adding to Wall Street’s jitters, the small Jacksonville law firm that brought the case won on its first try--and has about 175 similar claims pending against the tobacco companies, several of them scheduled for trial within the year.
It was the first tobacco case to reach a jury since congressional hearings and media reports brought to light explosive internal documents from Brown & Williamson and other cigarette makers--and some observers said the outcome suggests the documents had a strong impact.
“I think what this means is that . . . with these documents, any good lawyer . . . can bring these cases and win them,” said Richard Daynard, a Northeastern University law professor and head of the Tobacco Products Liability Project, which assists lawyers suing tobacco firms.
On news of the verdict late Friday afternoon, the stock of Philip Morris Cos. Inc. plunged $14.625 to $90.875, knocking $11.25 billion off the value of shares of the world’s largest tobacco company.
RJR Nabisco Holdings Corp. fell $4.25 to $28, and Loews Corp., parent company of Lorillard Inc., fell $3.625 to $78.875. U.S. shares of British-based BAT Industries, parent of Brown & Williamson, dipped 62.5 cents to $15.625.
Martin Feldman, a tobacco analyst with Smith Barney Inc., called the verdict “a really surprising decision [that] does make investors very nervous.”
“One might expect some additional volatility as a result of the new cases” pending in Florida, he said.
The American Medical Assn. applauded what it called a “milestone” verdict. “The tobacco industry must stand up and take responsibility for its wrongdoing,” the organization said in a statement.
Brown & Williamson, the country’s third-largest tobacco company, issued a statement blaming the loss on judicial error “that is subject to appeal with a very good possibility that the verdict will be reversed.”
Philip Morris called the outcome “certainly disappointing” and “an aberration.”
“We look forward to a thorough appellate review,” the company said.
Lung cancer was diagnosed in Carter, a 66-year-old retired air traffic controller, in 1991 after he had smoked for more than 40 years. During most of that time, he smoked Lucky Strike and Tareyton, brands made by American Tobacco Co. Brown & Williamson absorbed American Tobacco last year in a $1-billion merger.
“Somebody needed to take these people on,” Carter, whose cancer is in remission, said after the verdict. “A lot of people are dying of lung cancer.”
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The trial began July 22, and the jury of five men and one woman deliberated about 10 hours Thursday and Friday before finding that Brown & Williamson--as American Tobacco’s successor--was liable for negligence and for making an unreasonably dangerous product.
Carter’s lawyers did not seek punitive damages, and the award consisted of $500,000 for Carter and $250,000 for his wife.
“We thought all along that if a jury considered an individual case and considered the facts that we would be successful,” said attorney Greg Maxwell, who along with his partner, Norwood S. Wilner, argued the case for Carter.
“I feel wonderful,” Maxwell said. “I mean, we were told . . . basically that they [the cigarette companies] would eviscerate us, and we would never get a trial date, and they would bankrupt us.”
Maxwell said he was especially pleased that the testimony was aired on the Court TV cable service, because “most Americans do not understand what this vicious industry did.”
Since the early 1950s, when the first damage claims were filed against cigarette manufacturers, plaintiffs can point to only two successes--and those victories were pyrrhic.
In New Jersey in 1988, Liggett Group was ordered to pay $400,000 in damages to the family of lung cancer victim Rose Cipollone--but the verdict was thrown out on appeal and the family abandoned the case before the retrial.
In 1990, a Mississippi jury found American Tobacco partly liable for the lung cancer death of Nathan Horton--but jurors decided to award his family nothing in damages.
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During the past two years, there have been two damage awards against Lorillard, stemming from the use of asbestos in the filter of Kent cigarettes in the early 1950s. But those cases involved injuries from asbestos, not standard cigarette smoke.
In the past four decades, no more than about 20 cigarette cases have even made it to trial--thanks to the aggressive tactics of the cigarette companies. Most lawsuits were abandoned before trial as plaintiffs became financially exhausted or grew discouraged by unfavorable pretrial rulings.
As a result, anti-tobacco lawyers had largely given up filing individual suits in favor of two new lines of attack. Two years ago, a nationwide consortium of plaintiffs lawyers filed the Castano class-action suit in New Orleans on behalf of millions of allegedly addicted smokers. A federal appeals court has since ruled that the case is too large and unwieldy to proceed as a national class action--but the lawyers have responded by filing statewide class-action suits in California, New York and elsewhere.
In the other line of attack, state attorneys general, assisted in many cases by private attorneys, have filed massive lawsuits against tobacco companies to recover tax funds spent to treat smoking-related ailments. So far, 11 states and two municipalities--Los Angeles County and San Francisco--have filed such cases.
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Among plaintiffs’ attorneys, individual claims--such as those filed in Florida by Wilner’s and Maxwell’s seven-lawyer firm--were widely considered quixotic and a waste of time.
But Wilner obtained a court order to expedite discovery proceedings and move the cases quickly to trial. And he also benefited from sizzling disclosures in industry documents suggesting that top executives had concluded by the early ‘60s that nicotine was addictive--which they publicly deny to this day.
Among documents entered into evidence during the trial was a 1963 memo in which former Brown & Williamson general counsel Addison Yeaman declared, “We are then, in the business of selling nicotine, an addictive drug.”
According to an article last month in the Wall Street Journal, mock-jury focus groups convened by a New York research firm seemed generally unimpressed by the new documents, and were not persuaded to award damages to smokers who claimed they were addicted. The research was commissioned by prominent tobacco analyst Gary Black of Sanford C. Bernstein & Co., who has been bullish about the industry. Black could not be reached for comment Friday.
“There’s kind of an irony, because the new round of litigation has tended to rest on the premise [that individual claims] were unwinnable,” said Gary Schwartz, a law professor at UCLA.
The Carter verdict suggests that conclusion may be wrong “in light of changed jury attitudes,” Schwartz said.
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The verdict “certainly is likely to trigger more individual litigation of this kind,” said Stanford University law professor Robert Rabin.
“I’ve referred to these suits all along as morality plays,” Rabin said. “The question is, who looks more irresponsible, and the industry has been very successful up to now in making the smokers look more irresponsible.
“But this tale that can be told from the Brown & Williamson documents is very likely to make some juries, not all, feel that the more [culpable] side now appears to be the industry side,” Rabin said.
Brown & Williamson lawyers from the New York firm of Chadbourn & Park had argued that Carter made a personal decision to smoke despite package warnings and the advice of his doctor and family. They said he could have quit had he wanted to--which he did after his cancer was diagnosed.
In addition, Brown & Williamson contended that Carter’s illness had another cause, as the type of lung cancer he contracted is not associated with smoking.
Times wire services contributed to this story.
