In a landmark in the legal assault on tobacco, the U.S. Supreme Court on Friday for the first time upheld a jury verdict in a damage suit brought by a smoker against a cigarette company.
The high court, without comment, declined to review a Florida Supreme Court decision upholding a $750,000 judgment rendered against Brown & Williamson Tobacco Corp. by a Jacksonville state court jury in 1996.
Friday's action was quite significant, according to industry analysts and anti-smoking advocates.
"Had the U.S. Supreme Court agreed to take this case and then decided in favor of the industry, it may have been extremely difficult for individual plaintiffs to continue to bring their claims against the industry--almost anywhere in the U.S.," said Martin Feldman, a leading Wall Street tobacco analyst.
The case at issue was filed by Grady Carter, a retired air traffic controller, who smoked for 44 years and discovered that he had lung cancer in February 1991. He sued four years later, at a time when the industry had never paid a dime in damages in 40 years of litigation.
Mark Smith, a spokesman for B&W;, based in Louisville, Ky., said Friday that the company was disappointed in the outcome but added, "We remain confident in our ability to defend ourselves in future litigation." B&W; is a subsidiary of British-based BAT Industries.
In papers it filed at the Supreme Court in April seeking review of the verdict, which has grown to $1.1 million with interest, lawyers for B&W; said 46 suits by individual smokers are pending against the company in Florida and 1,490 similar claims are pending nationwide.
Feldman said Friday that "the most material concern on the individual case front remains the threat of cases on the West Coast, especially in California."
Cigarette companies are appealing three major judgments against them in California, including a $3-billion award earlier this month, as well as a $145-billion verdict rendered by a Miami jury in a statewide class-action case last summer.
In a related development Friday, an asbestos trust fund said it had abandoned its lawsuit seeking to compel the major domestic cigarette companies to pay a share of health care costs for sick asbestos workers who smoked. A federal judge in Brooklyn declared a mistrial in the case in January. At the time, Robert Falise, chairman of the Manville Trust, said he would continue to pursue the case, but his attorneys filed papers Friday to dismiss the massive action, which sought $400 million in damages.
Carter's case was the first in which a plaintiff introduced, over vigorous defense objections, highly damaging internal industry documents that had been stolen by former Brown & Williamson paralegal Merrill Williams.
Among the documents Carter's jury saw was a 1963 memo in which B&W;'s former general counsel Addison Yeaman declared, "We are then in the business of selling nicotine, an addictive drug," a statement made at a time when the company steadfastly maintained that their products were neither addictive nor hazardous.
A defense lawyer from a large Wall Street law firm attempted to minimize the document as the mere "musings" of a B&W; attorney. But jurors said in post-trial interviews that the documents, including some showing that the company knew many years ago that tobacco smoke contained carcinogens, had a significant effect on their deliberations.
Those documents and similar ones from other cigarette companies have now been shown to juries across the country, including the panel that awarded $3 billion in a cigarette case in Los Angeles Superior Court earlier this month.
Carter began smoking Lucky Strikes when he was 16 and did not stop smoking until he was diagnosed with lung cancer 44 years later. He had part of his left lung removed and his cancer is now in remission. Lucky Strikes were made by American Tobacco Co., which was absorbed by B&W; in a $1-billion merger in 1995.
The Jacksonville jury ruled specifically that the company was negligent in selling Carter "an unreasonably dangerous and defective product." The verdict sent shock waves through the industry, with tobacco stocks losing $14 billion in value in one afternoon.
In 1998, a Florida appeals court overturned the verdict, saying that Carter's suit was barred by the statute of limitations and because of a 1969 federal cigarette labeling law. The court also said the internal documents should not have been admitted.
But the verdict was reinstated in November by a unanimous decision of the Florida Supreme Court, which reversed the appeals court on all three issues.
In January, the Florida high court declined to rehear the case, and in March, B&W; sent Carter and his wife, Mildred, a check for part of the verdict.
The sole issue that B&W; raised in seeking U.S. Supreme Court review was its contention that the case was preempted by the 1969 federal law, an argument that proved unavailing.
Brian Wolfman, an attorney at Ralph Nader's Public Citizen Litigation group, who helped Carter's attorneys persuade the Supreme Court not to take the case, said B&W;'s brief was based on false factual premises.
On Friday, Carter said that he was pleased that the long battle was over and that he expected B&W; to pay the remainder of the judgment by the end of the year. Now 71, Carter said that he was particularly satisfied that the cigarette companies had finally, grudgingly, admitted that smoking is "addictive and causes health problems."
"They are selling a product that if used as directed will kill you," Carter said in a telephone interview.
Federal health officials have said that cigarette smoking is responsible for 400,000 deaths a year in the U.S.
Carter said he decided to sue when he saw the executives of seven major cigarette companies testify at a House of Representatives hearing in 1994 that nicotine was not addictive. "I had to do it when they got up and raised their hands, knowing how hard I had tried to quit. That was the last straw."
"We never thought this case would have the impact it would have when we filed it," Carter's lead lawyer, Norwood "Woody" Wilner of Jacksonville, said Friday. "We are proud to have played a role in changing the landscape of tobacco litigation."
HMO issue: High court will decide legality of state review panels. A14