Florida Smokers’ Case Is Back in State Court

A federal judge sent a $145-billion judgment against Philip Morris Cos. and other U.S. tobacco companies back to the same court that produced the verdict, removing the case from a forum the industry hoped would be friendlier to its cause, attorneys associated with the case said Sunday.

U.S. District Judge Ursula Ungaro-Benages was scheduled to hear arguments in the case, brought by a group of 300,000 to 700,000 sick Florida smokers, on Tuesday. Instead she mailed the ruling to the companies during the weekend.

The ruling sends the first class-action smokers’ lawsuit against the tobacco industry back to Miami-Dade County Circuit Judge Robert Kaye, who presided over the jury trial in which the verdict was reached. Kaye had been waiting for the federal court’s decision before ruling on the tobacco companies’ motions to throw out the record-shattering punitive damages.

The tobacco companies hoped the federal judge would take jurisdiction in the 2-year-old case. Federal judges have consistently ruled in favor of the tobacco industry in claims brought by smokers.

Following a two-year-long trial and the record $145-billion verdict, the tobacco industry managed to transfer the case to federal court when a union health-care plan intervened in the case in July, invoking a federal law that could allow insurers to recover funds paid to Florida smokers.

The tobacco companies argued that the union’s involvement in the case raised federal legal questions that only the federal court could answer. Federal courts have consistently held that smokers’ health claims are too diverse to be grouped together.

The only victories plaintiffs have had in suits against the industry have come in state courts. In the last two years, individual plaintiffs have won three multimillion-dollar cases against cigarette makers. On Oct. 12, a jury in Tampa told R.J. Reynolds Tobacco Holdings Inc. to pay $200,000 in compensatory damages to the family of a deceased Florida smoker.

The tobacco companies have still been successful in eight of the last 12 individual tobacco trials.

Smokers’ attorney Stanley Rosenblatt said he welcomed Ungaro-Benages’ decision, saying the tobacco companies used the union issue as a technical means of trying to get the case switched to a federal court--where they might expect more favorable treatment than in state court.

“It [the ruling] means we can get back online; we are back in the state court system” Rosenblatt was quoted by Reuters news service. “The tobacco industry specializes in obstacles . . . but we think that ultimately the tobacco companies will have to honor the jury’s verdict.”

In a prepared statement Sunday, Philip Morris said it now awaits rulings from Kaye on the post-trial motions, and the company said it believes the case will eventually be thrown out under appeal.

“While we believed the significant legal issues raised in this case should have been decided in the federal court, we have continued to conduct the work necessary to pursue our appeal in state court,” said William Ohlemeyer, Philip Morris’ vice president and associate general counsel.

Defendants in the Miami case include R.J. Reynolds, Loews Corp.’s Lorillard Tobacco, British American Tobacco’s Brown & Williamson and Vector Group Ltd.’s Liggett Group unit.

Cigarette makers claim the award would bankrupt them if it stands. A final judgment in the case would require each tobacco company to post a $100-million bond while appealing.

Florida and other states have expressed concern that an enormous lump-sum verdict in the class-action could jeopardize payments they are set to receive under 1998’s $246-billion settlement with the states.

Ungaro-Benages’ ruling was first reported by the Associated Press.

Last week, The Times reported that Lorillard Tobacco, the fourth-largest U.S. cigarette maker, said it was negotiating a deal in which the company would pay about $7.5 billion over 30 years to settle punitive damage claims filed by thousands of smokers around the country.

But the nation’s three largest cigarette makers--Philip Morris, R.J. Reynolds and Brown & Williamson all said they would oppose any effort to certify that case or any other case as a class action.