Smokers’ Group Lawsuit Rejected
A federal appeals court in New York on Friday threw out a class action that sought to unify punitive damage claims by millions of smokers against the tobacco industry.
The appeals court decertified the class action, or group lawsuit, which claimed that the industry hid the dangers of smoking. The decision, which forces smokers who are intent on suing to file individually, is a victory for the industry because it reduces the chance that it will face a multibillion-dollar punitive damages suit.
The nationwide case was originally certified by U.S. District Judge Jack Weinstein in Brooklyn as a “limited fund” class action, intended to distribute funds equally among plaintiffs whose claims might exceed the amount available.
The appeals court said the class must be decertified because the smokers failed to show the total value of punitive damage claims or the amount of money available to pay them. The case is known as the Simon II case, after Ellis Simon, one of a group of smokers who filed the original suit in 1999.
“There is no evidence by which the district court could ascertain the limits of either the fund or the aggregate value of punitive claims against it,” the U.S. 2nd Circuit Court of Appeals wrote in a 37-page decision.
The smokers were seeking “every penny that the defendants had, up to the point of bankruptcy,” said Theodore M. Grossman, a partner with the law firm Jones Day who represents Reynolds American Inc.’s R.J. Reynolds Tobacco unit, the second-largest U.S. cigarette maker.
“The appeals court decision is the correct and proper one,” said William S. Ohlemeyer, associate general counsel at Altria Group Inc.’s Philip Morris USA. Philip Morris is the world’s largest cigarette maker.
Weinstein, 83, has allowed cases against gun makers and tobacco companies to go to trial that are similar to ones thrown out by other U.S. judges. He has also engineered class settlements in litigation over asbestos and the chemical defoliant Agent Orange.
In the Simon case, Weinstein certified a class of smokers diagnosed with any of 16 smoking-related diseases, including lung cancer and heart disease, since 1993.
The decision, made by a three-judge panel, may be appealed to the entire 2nd Circuit Court of Appeals and the Supreme Court. Richard Heimann, a lawyer for the smokers, didn’t immediately comment.
