Small Victory for Industry in Florida Case

In a victory for the tobacco industry, the judge hearing a Florida smokers’ case ordered jurors to assess the industry’s ability to pay punitive damages based on the money the companies’ have now rather what they could pay over several years. The lawsuit filed on behalf of 300,000 to 700,000 sick Florida smokers seeks a multibillion-dollar award from the industry as punishment for decades of misconduct. The jury already ruled that the companies make a deadly product, and it awarded compensatory damages to three smokers representing the group. A month ago, the tobacco industry asked that any punitive damages be based on its ability to pay a lump sum. Circuit Judge Robert Kaye waited to rule until the issue arose during testimony of University of Miami law school finance professor George Mundstock, one of two finance witnesses for smokers. The judge’s ruling came after Mundstock testified that tobacco balance sheets do not reflect the ability of cigarette makers to raise money quickly with price increases. Mundstock estimated that the nation’s five biggest cigarette makers are worth $157 billion domestically. He said they could raise that amount in six months by borrowing the money or selling themselves. The judge ordered the jury to return today to hear excerpts from depositions by tobacco chief executives. Smokers’ attorneys plan to rest their case when the readings are complete.