R.J. Reynolds Found Not Liable in Tobacco Case
A Mississippi jury ruled Wednesday that R.J. Reynolds Tobacco Co. is not liable in a wrongful-death suit brought by the widow of a man who had smoked since he was a boy.
The ruling, the second recent case brought on behalf of an individual smoker to go the industry’s way, comes as tobacco firms await a Florida jury’s decision on how much to award plaintiffs in a landmark class-action case brought by sick smokers. The award in Miami’s Engle case could reach the hundreds of billions of dollars.
In the Mississippi case, plaintiff Kay Nunnally alleged that deceased husband Joseph Lee Nunnally’s use of Reynolds’ cigarette brands since the early 1960s led him to develop lung cancer. Joseph Nunnally began smoking between the ages of 8 and 10, just a couple of years before health warnings started appearing on packages. He died in 1989 at age 37.
The verdict follows a similar decision in June when a Brooklyn, N.Y., jury rejected claims by a former smoker and his wife that he had developed lung cancer and emphysema from smoking. R.J. Reynolds was the only cigarette maker named in the case.
Michael Ulmer, the lead attorney for Reynolds, said the jury agreed that Nunnally smoked despite being aware of the risks associated with tobacco.
“The plaintiff did not offer any evidence that the cigarettes Mr. Nunnally smoked were in any way defective,” Ulmer said in a statement. “They offered nothing to the jury to support the notion that there was any feasible, safer alternative cigarette design that would have been used by Mr. Nunnally and that would have prevented his cancer.”
“It would have been more of a surprise if the industry had lost this case rather than having won it,” Martin Feldman, tobacco analyst with Salomon Smith Barney, said. “The industry has generally done well within the heartland of America.”
Reynolds shares closed at $27.63, down 31 cents, on the New York Stock Exchange, after bumping as high as $28.25 just after the company announced the verdict.
Analysts said the market is more focused on the Engle case, in which the industry has already been found liable for a broad range of smoking-related illnesses. Attorneys for the plaintiffs in that case, the first anti-tobacco class-action suit to go to trial, are asking for punitive damages of nearly $200 billion.
In Miami, tobacco company lawyers continued their closing arguments Wednesday. An attorney for R.J Reynolds said the company was selling fewer cigarettes each year and has no hope of paying the $19.6 billion to $37.5 billion apportioned as its share of the punitive damages sought for an estimated 500,000 or more sick smokers in Florida. Attorney Jim Johnson said the company is heavily indebted and would come up $499 million short if obliged to sell current assets and pay current liabilities.
“Like many individuals, Reynolds is living paycheck to paycheck,” Johnson told the jurors.
Reynolds last year reported net income of $2.59 billion, including big gains from the sale of the company’s international tobacco business, on revenue of $7.57 billion.
