Judge Orders Nationwide Tobacco Suit
Laying the groundwork for a tobacco case that would dwarf all others, a federal judge in Brooklyn, N.Y., ordered that millions of injured smokers be lumped into a nationwide class that would share a single pot of punitive damages from cigarette manufacturers.
If upheld on appeal, the novel ruling late Thursday by U.S. District Judge Jack B. Weinstein could result in cigarette makers paying billions of dollars into a giant fund, to be divided by a formula among all Americans who can show proof of smoking-related injuries since 1993.
The ruling is meant to reform what amounts to a lottery system in which a few plaintiffs may reap a windfall in damages while a greater number suffering from identical smoking-related ailments win nothing at all.
No estimates have been made of the potential size of the class. But given estimates that more than 400,000 Americans die prematurely each year from smoking-related causes, it could be enormous.
However, federal courts generally have rejected class-action status for tobacco cases on the grounds that individual differences among smokers--including when they started and how much they smoked--overwhelm the common issues. Some observers said Weinstein’s order, which outlines a numbingly complex procedure for setting damages, is likely to be rejected by the U.S. 2nd Circuit Court of Appeals.
Tobacco industry lawyers said they would seek reversal of the order, and in his own ruling Weinstein suggested that the panel entertain an appeal.
Widely regarded as brilliant and unconventional, the 81-year-old Weinstein is known for crafting sweeping settlements involving toxic substances such as asbestos and Agent Orange. He had long signaled his desire to create a structure for reaching a global resolution of tobacco litigation, so his ruling wasn’t unexpected.
Elizabeth J. Cabraser, a San Francisco lawyer whom Weinstein appointed lead plaintiffs’ counsel, said the ruling would help tobacco victims who want to sue but can’t find a lawyer to do battle with the industry.
Several hundred individual claims are pending in courts around the country, but there would be more if there were lawyers willing to take them.
The ruling “gives smokers the opportunity to hold the tobacco companies fully accountable for all of the harm their conduct and their products have done over the years,” Cabraser said.
But William S. Ohlemeyer, vice president and associate general counsel with Philip Morris Cos., said the order “is inconsistent with where the law is on the issue of aggregating claims and treating them as class actions, especially in tobacco cases.”
“Although we strongly disagree with Judge Weinstein’s ruling, this order now makes it possible for an appellate court to decide these issues,” Ohlemeyer said.
Along with Philip Morris, defendants include R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp. and its parent British American Tobacco, Lorillard Tobacco, Liggett Group Inc. and UST Inc., whose brands include Copenhagen and Skoal.
Stephen Gillers, a New York University law professor, described Weinstein’s ruling as “quite remarkable” but probably doomed.
“Jack Weinstein is probably the most procedurally creative judge sitting in the United States today, but here he’s asking the court system to do something that I think is beyond its competence,” Gillers said. There’s “almost no chance that the 2nd Circuit will allow this to go forward in this way.”
The order establishes a class of all U.S. residents who have smoked since 1993 and been diagnosed with at least one of 16 identified diseases, including emphysema and heart disease. There is no provision for members to opt out of the class and pursue claims on their own.
However, excluded from the class are nonsmokers stricken with these ailments and those whose suits against the industry have been resolved.
Also excluded are class members in Engle vs. R.J. Reynolds, a Florida case in which tobacco companies were ordered to pay $144.8 billion in punitive damages to a statewide class of injured smokers. The state court verdict in July 2000 is on appeal.
Weinstein’s order sets a Jan. 20, 2003, start date for the first stage of a three-part trial. According to the plan:
* In the first phase, the jury would determine whether cigarette makers are liable and estimate the value of compensatory damages that would be owed to all members of the class. Compensatory damages wouldn’t be paid out, but the amount would be used as a benchmark to set the punitive damages. The jury also would resolve the individual claims of the 14 class representatives.
* In phase two, jurors would determine whether punitive damages were warranted. If the answer was no, the case would end without a third phase.
* In phase three, jurors would decide the total punitive damages to be awarded and the amount to be allocated to each disease.
Finally, the order says, the court would distribute punitive damages to individual class members “submitting appropriate proof.” The order does not say whether the proof means first winning compensatory damages at a separate trial, or whether medical records alone would suffice. The order says punitive damages not divided among class members would be spent on medical research.
Mark Gottlieb, a lawyer with the Tobacco Products Liability Project, which promotes lawsuits against tobacco companies, called the trial plan “fantastic” but also “a little bit frightening.”
On the one hand, he said, the verdict of a single jury could devastate the industry, “but on the other hand, if that jury does not award punitive damages or issues a relatively small award, it will alleviate the threat.”
Philip Morris shares fell $2.01 to $42.69, R.J. Reynolds slumped $3.23 to $47.22 and UST lost $1.14 to $28.85, all on the New York Stock Exchange.
