EXCERPTS from The
, article by Terri Somers, Nov. 5, 2000
The statewide class-action case against Big
Tobacco belongs in state court, a federal judge
in Miami has ruled.
U.S. District Judge Ursula Ungaro-Benages
was to hear arguments Tuesday on whether the
case belonged in state or federal court. But on
Friday, she called lawyers involved, telling them
she had reached a decision. The lawyers
received her 14-page order in the mail
On July 14, a six-member jury awarded $145
billion in punitive damages to the statewide
class of an estimated 700,000 ailing smokers
and the survivors of those who died of
cigarette-related illnesses. On the same day,
the Southeastern Iron Workers union filed legal
papers, saying the union wanted to become a
member of the class action and was entitled to
a share of any punitive damages.
Lawyers for the five tobacco companies
involved in the lawsuit said the issue of whether
the union can join the lawsuit was a federal
one, thereby allowing the case to be moved to
Lawyers representing the smokers, Stanley
and Susan Rosenblatt of Miami, denounced the
move as "sanctionable and frivolous."
They contended it was designed to prevent
Miami-Dade County Circuit Judge Robert Kaye
from entering a final judgment on the verdict.
"We were very upset that the ironworkers
union filed a motion to intervene," Stanley
Rosenblatt said Saturday. "We always believed
this was a way for tobacco to remove the case
to federal court. We are happy with the ultimate
decision of the judge to remand (to state court).
On the other hand, the verdict was entered on
July 14, and here it is Nov. 4 and we have lost
all this precious time."
had sought to move their appeal of the decision
to federal court.
EXCERPTS from The Associated Press, July 25, writer Catherine Wilson, headlined: Tobacco Case Moves to Federal Court
Tobacco opponents called it a desperate action.A courageous jury has stated that punitive damages of $145 billion must be paid by the tobacco industry:
"They get a lot of credit for imagination on this one,'' said Northeastern University law professor Richard Daynard, who has advised smokers' attorneys.
The nation's five biggest cigarette makers automatically switched the case to U.S. District Judge Ursula Ungaro-Benages with the move. She would consider a 200-page motion also filed Monday to challenge the punitive damage award, the three jury verdicts against tobacco, the trial judge's handling of the case and class certification.
The industry transferred the case based on a motion submitted in state court by the Southeastern Iron Workers health care plan on the day of the verdict July 14. The union argued some of its members were covered by the lawsuit and it should be allowed to join the case.
"As a result of the union motion, there were new federal issues injected into the case,'' said Mike York, an attorney for industry-leading Philip Morris.
Smokers' attorney Stanley Rosenblatt was expected to file a motion with Ungaro-Benages to send the case back to Florida Circuit Judge Robert Kaye, the trial judge.
"In the normal course of events this would be tossed back with a nasty comment from the bench by the federal judge, but when the tobacco companies are involved sometimes weird things happen,'' said Daynard.
A grateful nation should offer thanks to this courageous, patient jury, whose members heard two years of testimony on the subject, and who offered three decisions.
The lead photo from ABC News 20/20, shows Rita Zemlock, GASP of Florida in the background, in the courtroom following the jury's verdict. Rita attended many of the court sessions, and has reported on these in the organization's newsletters. Many thanks to Rita Zemlock!
What a shame the nation's media could not have been reporting on the issues in this trial, and the evidence presented, over the entire two year period. The reporters on 20/20 missed the point of the trial, and the intense moral victory here. By not reporting on this trial regularly over the last two years, the nation's media has fallen into the trap of the tobacco industry, which is most upset by truth, by having people see tobacco executives and tobacco attorneys and tobacco analysts as the deceitful, lying, greedy drug pushers they are, quite willing to continue marketing a product that will addict and kill most of their consumers. To use the "gag order" as an excuse is ridiculous. Many in the Florida media were able to attend the trial, and their reports could have been utilized, or ABC, NBC, CBS, and others could have sent people there to report regularly on this historic trial.
Maybe it is time to have full disclosure from the media, to let the public know who owns what, and who sits on what corporate boards. For example, Philip Morris has on its board two CEOs of major media corporations - RupertMurdoch (Chairman, The News Corp.- publishing, movies, television) and Richard D. Parsons (Pres., Time Warner).
No one should forget
of tobacco, who paid the ultimate price for using a product that
is addictive and lethal when used as intended, a product that tobacco
knew would addict and kill consumers. It was the
Brown & Williamson CEO who sat in the courtroom with his bodyguard.
No consumers had a bodyguard to protect them from tobacco executives.
The jurors who leveled the largest-ever U.S.
damage award against Philip Morris Cos. and four
others didn't trust testimony from the tobacco
companies about how much they could afford to pay
plaintiffs, a juror said.
John Mestre, a 48-year old telephone service
technician, said the jury might have believed
testimony from companies' chief financial officers
rather than the testimony of their chief executives.
"They brought nobody to bring the real figures,"
Mestre, the only member of the jury who smoked,
said. "Based on their track record, we couldn't
believe anything they said. They weren't forthcoming
with the real value of the companies.''
On Friday, the six jurors deliberated less than five
hours before deciding the tobacco companies
should pay Florida smokers $145 billion.
"We wanted them to know they weren't just going to
get a slap on the wrist,'' Mestre, a father of two,
said. "They did some bad things.''
The court began picking the jury in July 1998, and
opening statements in the first phase of the trial
began the following October. The jury found in July
1999 that the tobacco industry was liable for making
a deadly product.
After he was picked as a juror, Mestre said he told
himself he would quit smoking when the trial ended.
A long-time Marlboro smoker, he finally gave up
on that timeline as the trial ended up taking years,
not the months he had expected. He quit buying
cigarettes last month on his birthday, though he said
he will still take some from his wife.
"It's the only product that when used for the use
intended, will knock your socks off,'' he said.
Before dismissing the jurors, Judge Robert Kaye
praised the jury for giving up a good portion of their
lives for the past two years to serve on this panel.
"You, as jurors, have added to our history,'' Kaye
told the panel. "You added so much to the history
of jurisprudence and the history of this country.''
Kaye presented the jury, which had also awarded
$12.7 million in compensatory damages to three
named plaintiffs, with a certificate of
service for their two years of service.
"Some day, you'll hang it on the wall and look at it
and say, 'Gee, I did serve,''' Kaye told the jurors.
"It was an experience where I garnered a (lot) of
information,'' Mestre said. "I just don't know what to
do with it.''
For more than a week, a six-member jury in a Miami courtroom heard the song of the new cigarette industry.
One by one, the chief executives of Philip Morris, R. J. Reynolds and other major tobacco companies appeared before the jury to tell how they had turned over a new leaf. They had agreed to pay $246 billion to states to fight teenage smoking and help pay for the ills of injured smokers.
Some executives told jurors of their efforts to develop less
dangerous cigarettes. And, they said, the need to punish their
companies with punitive damages was past.
The Miami jury, when it reached its verdict on Friday, seemed to
respond as if it had not heard a word of the executives' testimony
or, perhaps worse, as if the industry's arguments had infuriated the jurors more. After five hours of deliberations, they meted out a stunning $144.8 billion punitive award to members of a class-action lawsuit brought on behalf of all Florida residents made sick by smoking.
The jury foreman confirmed those sentiments on Saturday. "To minimize the deaths of so many people," exclaimed Leighton A. Finegan. "We have seen the deaths of 400,000 people a year for 50 years. And they stand up in court and say that if we give a huge verdict it's a death warrant for the companies."
The failure of the tobacco industry's arguments in the Miami case
could haunt it in future lawsuits or spur it toward an overall
settlement. But even if cigarette makers succeed in getting the award sharply reduced, as many experts expect, or thrown out, the staggering size of the damage figure stunned some legal experts and sounded alarm bells.
But others said the tobacco industry had only itself to blame for the verdict, given its decades-long fight against regulation.
"This jury's verdict is probably a reflection of frustration at the
failure of other branches of government to hold this industry
accountable," said Matthew Myers, the president of the Campaign for Tobacco-Free Kids in Washington.
The Miami jury's award is likely to be hotly debated by legal experts and others for months. But in many ways, its size also reflected the unique nature of the Florida case and how it proceeded.
For one, a class-action case against the cigarette industry had never previously gone to trial. And the jury heard the case in segments. Last year, for example, it found that cigarette producers had conspired to mislead the public about the dangers of smoking.
In April, based on that decision, it awarded a record $12.7 million
in compensatory damages, or those intended to cover medical costs and pain, to three smokers chosen to represent the class.
Those findings set the stage for the latest part of the trial in
which the jury was asked to decide punitive damages, or those
intended to punish a company for its conduct, on behalf of the entire class, a group estimated at 300,000 to 700,000 people.
The potential for a huge damage award had not been lost on the
cigarette makers. In May, they succeeded in getting a bill passed by the Florida Legislature limiting to $100 million the amount of money that a defendant had to post to appeal a verdict in a Florida state case. Previously, defendants had to post the entire amount of an award.
The companies, along with state officials, had argued that posting a bond to cover huge punitive damages in the case could both bankrupt cigarette makers and jeopardize the $246 billion in payments they are paying states as a result of lawsuit settlements with the industry.
Even with the potential for immediate financial disaster apparently averted, the stakes were still high as the punitive damages phase of the trial unfolded. And as it did, tobacco producers rolled out an argument against punitive damages that they had been refining over the past year.
Simply put, it was that the industry had repented. Not only is it
paying the states billions, it no longer sends its top executives to
Congress to argue that smoking is not addictive and does not cause cancer. It is open. It is honest. It is different.
The message did not play with the jurors.
Clark Freshman, an associate professor at the University of Miami Law School, said he believed that cigarette producers might have undercut themselves when they testified that they could not afford to pay substantial damages.
"That probably made the jury disregard all their arguments," Mr. Freshman said.
Mr. Finegan, the jury foreman, agreed. "I felt a great sense of
relief that what we did was right and justified, according to the
evidence presented," he said.
Robert Rabin, a law professor at Stanford University, also said he believed the jury turned a deaf ear to the industry, a sign that
could spell trouble for the industry as it faces punitive damages in
"They shifted course and it didn't help them," Mr. Rabin said.
Tobacco industry lawyers like Mr. Little of Philip Morris said they
believed the structure of the trial was so unfair and the jury's
verdict so absurd that the entire case will be thrown out on appeal.
And while other class-action lawsuits are looming, Mr. Little said he believed that they would never get to trial because class-action lawsuits are a flawed legal vehicle for resolving smokers' claims.
For their part, antismoking advocates offered differing views. While some expressed concern that the cigarette industry could use the size of the award to cast itself in the role of legal whipping boy, others, like Dr. David Kessler, the former head of the federal Food and Drug Administration, saw it differently.
Dr. Kessler, now the dean of Yale Medical School, said that no matter what spin the industry or antismoking advocates put on the award, the message of the jury was clear.
"The jury award is less important for the money or whether any group of smokers will see any of the damages," Dr. Kessler said, "than it is for the future of the industry."
Two men standing in a cemetery, one is holding a newspaper headlined, "Lung cancer fatalities" while the other, a tobacco representative, says, "If we lose a multi-billion dollar lawsuit we could go under."
Minnesota was one of the first states to sue the tobacco industry. Attorneys here amassed millions of documents that exposed secrets about the industry's marketing strategy and knowledge executives had about tobacco's addictiveness.AP, July 14, 2000
Humphrey thinks the Minnesota documents cleared the way for verdicts like that in the class-action case brought by Florida smokers.
"There's no doubt that our opening up the truth so to speak has had a phenomenal impact not only here but currently pending around the world, frankly,'' he said.
July 14, 2000
Contact: Richard A. Daynard
Edward L. Sweda, Jr. or
Mark A. Gottlieb
TPLP: ENGLE VERDICT UNLIKELY TO BE REVERSED ON APPEAL
Repudiating the tobacco industry’s long history of fraud and deception,
jury today delivered an historic verdict, awarding plaintiffs in the Engle case a record
$144 billion in punitive damages. Richard A. Daynard, Chairman of the Tobacco
Products Liability Project at Northeastern University School of Law and a professor of
law there, called the jury’s verdict “an affirmation of the millions of lives of Americans
devastated by the tobacco industry’s outrageous and illegal conduct over the past half
Prof. Daynard also commended the jury for holding each of the major
companies financially accountable for their long history of misconduct. The breakdown
by company is as follows: $73.9 billion to be paid by Philip Morris, Inc.; $36.2 billion by
R.J. Reynolds Tobacco Co.; $17.5 billion by Brown & Williamson Tobacco Co.; $16.2
billion by Lorillard Tobacco Co.; and $790 million by Liggett Group.
Throughout the course of this lengthy trial, pro-tobacco stock analysts
downplayed the importance of the Engle trial and this jury’s previous verdicts in July
1999 and April 2000. Shortly before closing arguments, which began on July 10,
analysts predicted that the jury award in the punitive damages phase would not exceed
$20 billion. Not surprisingly, they now are predicting – if not outright guaranteeing – that
the jury’s verdict will be overturned on appeal.
“Rather than heeding the predictions of stock analysts who are not
who rely on sources inside the tobacco industry, people should keep in mind that the
Florida’s Courts of Appeal, as well as the Florida Supreme Court, have had ample
opportunity to derail the Engle case, if they had been so inclined. Instead, these courts
have quite properly refused to do so and have let the case proceed as a class action.
The fact that other courts in other states and under other circumstances have decertified
class actions against the tobacco companies is irrelevant to the Engle case,” Daynard
said. He also commended the jury for its patience and perseverance as it has served
for over two full years and for its ability to see through the industry’s “bogus claims that it
has fundamentally changed” the way it behaves. “As Stanley Rosenblatt quite eloquently
put it in his closing arguments, the Day of Reckoning has come for Big Tobacco. At
long last, the tobacco companies are being held accountable for their despicable and
illegal behavior over the past half century,” Daynard concluded.
Circuit Judge Robert Kaye slowly leafed through the thick packet
of pages detailing the award, then placed his left hand over his
mouth and exhaled. Ten seconds passed and the hushed crowd in the courtroom watched as Kaye fumbled with the papers.
After the wait, Kaye muttered, "I will publish this verdict.'' But he stopped short, raised his right index finger to the jury, smiled, and said: "Wait. Before I do that, let me think on this for just a second.''
Furrowing his brow, Kaye waited five more seconds before his deliberate reading of the damages.
In the middle of the verdict, Kaye said, "A lot of zeros.''
In a long discourse, Kaye thanked the six jurors who began hearing the case two years ago.
"It has been a momentous time and a momentous occasion as far as the history of jurisprudence is concerned,'' Kaye said. "Because of the length and complexity of the trial, this trial ... garnered a great deal of attention. You are to be commended for the time and devotion to your duty and never
A jury ordered the tobacco industry Friday to pay more than
$140 billion in punitive damages to sick Florida smokers, a
record-shattering verdict that the cigarette companies had claimed would
amount to a "death warrant."
"Lot of zeros," Circuit Judge Robert Kaye said after reading the jury's
breakdown against each defendant.
Lawyers for Big Tobacco had said that the five companies could afford
pay only $150 million to $375 million, and that the companies would be
put out of business if the award went much higher. Under Florida law, a
punitive verdict cannot bankrupt a defendant.
The six jurors, who had sat through a two-year trial and heard 157
witnesses, began deliberating the punitive damages question Friday
morning after Kaye read final instructions. They deliberated a little less
than five hours before reaching a decision.
Friday was the third time the jury has deliberated in the case, the
smokers' class-action lawsuit to go to trial. The panel decided in July
1999 that the industry makes a deadly product. In the second phase, the
jury in April ordered the industry to pay $12.7 million in compensatory
damages to three smokers representing the class.
The smokers wanted the tobacco companies to pay $196 billion as
punishment for making a product that kills 430,000 Americans a year and
for misleading the public since the 1950s, when internal research
concluded smoking causes cancer.
Top executives from all five defendants made unusual appearances to
testify they didn't deserve to be punished because they have changed their
ways and are already committed to paying billions of dollars to settle the
lawsuits brought by the states.
The ruling was the largest jury damage award ever, far surpassing the
billion awarded in Hawaii in 1996 to a treasure hunter, Rogelio Rojas,
who sued former Philippines president Ferdinand Marcos for the alleged
theft of gold bullion. That verdict was later overturned.
The largest previous punitive-damage award was $5 billion against
ExxonMobil for the Exxon Valdez oil spill in Alaska. The company is
appealing. The previous record for punitive damages in a product-liability
case was $4.8 billion against General Motors last year in a California car
fire. A judge slashed the award to $1.09 billion.
The industry filed a mistrial motion earlier Friday based on closing
arguments by plaintiffs' attorney Stanley Rosenblatt, charging improper
commentary and inflammatory remarks "preclude the jury's rational
consideration" of the case. The judge has delayed deciding dozens of
As the case wound down this week, lawyers for both sides spoke of
death – the death of Big Tobacco and the deaths of millions of smokers.
Dan Webb, attorney for industry-leading Philip Morris Inc., said the
awarding of up to $196 billion would be a "death warrant" for the
Rosenblatt turned the phrase around Thursday, saying it was the
industry that had issued death warrants to millions of consumers.
"We ask you to speak for all those silent, anonymous victims of tobacco
grieved by their loved ones but unknown to a callous and deceitful
industry," Rosenblatt said.
July 15, 2000
Statement of Joseph Cherner, expert witness in the Engle case, who testified that the tobacco industry could pay $145 billion in punitive damages.
Congratulations to Stanley and Susan Rosenblatt who stood up to an army of tobacco lawyers and won. As an expert witness for the Rosenblatts, I am deeply gratified that despite vicious attempts by tobacco company lawyers to discredit my financial expertise, the jury chose to believe me, and not to believe the tobacco industry. Witnesses for the tobacco industry were paid tens of thousands of dollars to testify. I chose to testify for free.
No matter what ultimately happens in this case, nothing will ever change the fact that six ordinary people/jurors listened to two years of testimony and unanimously found the tobacco cartel guilty of the biggest fraud ever perpetrated on the American people. The truth of this verdict can never be denied.
Joseph Cherner is a former Wall Street executive who left Wall Street to start a charitable foundation dedicated to preventing another generation of tobacco addiction and disease.
Joseph W. Cherner,
SmokeFree Educational Services, Inc.
BUT, they still lie, they still manufacture and market an addictive lethal drug. Tobacco executives are still making money from addicting people who die from using their products.
RJR, for example, said in court in Mississippi that cigarettes are NOT addictive, but gave the impression in the Florida Engle trial, that RJR agrees cigarettes ARE addictive. Will the real RJR please stand up?
Tobacco companies tried cosmetics to hide their sins; spread fears of going broke; talks about "safer" and "less hazardous" cigarettes. Some tobacco witnesses said the product is addictive and may cause disease, others disagreed, creating the illusion of a "continuing controversy" where none exists. Philip Morris said they never meant to deceive anyone. It just happened?
Tobacco companies said -No money - but Philip Morris "scraped" up enough funds to purchase Nabisco and its debts. Tobacco companies said -so sorry for what we did - but they are still marketing an addictive product that kills, and still contributing to politicians at state and national levels. Business as usual. How are they different from the Columbian drug lords?
EXCERPTS from The Sun-Sentinel, July 14, 2000, writer Terri Somers, headlined: Miami-Dade jury to begin deliberating today in historic smoking trial
Lawyers for the nation's top five tobacco
companies lied about industry reforms to
convince jurors they should not award $156
billion damages to sick Florida smokers, the
smokers' lawyer said Thursday.
"Don't dilute your verdict," the lawyer,
Stanley Rosenblatt, told the jury while wrapping
up the class action trial in the case he filed in
1994 on behalf of an estimated 300,000 to
700,000 ailing and dead Florida smokers.
The jury will begin deliberating today how
much the five tobacco companies should pay in
Rosenblatt closed this third phase of the
case with an unflattering assessment of what
the tobacco defendants did in the previous two.
"In phase one, (tobacco lawyers) lied to you
for nine months about causation, misconduct
and addiction and did it under the sign 'We who
labor here seek only the truth,'" he said,
referring to the wall hanging behind Miami-Dade
Circuit Judge Robert Kaye's bench.
At the end of that phase, the jurors found the
companies produce an addictive product that
causes lung cancer and more than 20 other
diseases, and conspired to hide the health
In phase two, he said, they lied about
whether smoking caused the illnesses suffered
by the individuals representing the entire class.
Those class representatives have been
sitting beside him throughout the trial.
Two, Mary Farnan and Frank Amodeo, are
cancer survivors and the third is the husband of
a former smoker, Angie DellaVecchia, who died
of lung and brain cancer last year.
In this third phase, "instead of finally just
being straight with you, they're lying about
change and they're lying about being poor,"
"Suddenly they've become the victims."
The tobacco lawyers called Rosenblatt's
suggested damage award unrealistic. They
said the five companies could afford to pay
about $150 million to $375 million altogether.
Rosenblatt criticized the industry for failing to
put any financial experts on the stand to
discuss the companies' ability to pay.
And he ridiculed the "contrite" approach of
the tobacco attorneys, how they referred to rich
tobacco company executives by nicknames
like Mike, Nick, Marty and Benjie, as if they
were average working stiffs.
As he made the comments, Brown
Williamson CEO Nicholas Brookes sat
stone-faced in the courtroom's front row. A
bodyguard who has accompanied him
throughout the trial sat just outside the door.
Earlier Thursday, Brown & Williamson
lawyers gave their summation to the jury.
"Let me tell you about the new Brown &
Williamson," company lawyer Anthony Upshaw
said at least three times.
"You sit in judgment of the people of Brown &
Williamson, all 7,000 of them," Upshaw said.
And that extends from the top executive to the
factory worker in Macon, Ga., he said.
And he fed a theme that has become
apparent in the past few weeks of the trial:
When it comes to trying to minimize any
punitive damage award, it's every company for
"There's no Big Tobacco in this phase of the
case, there's five separate companies," said
Gordon Smith, another company lawyer.
If the jury awards the smokers the $156
billion damage award suggested by Rosenblatt,
Brown & Williamson will be out of business,
Smith said. If the jury must levy any punitive
award against the company, Smith suggested
$2 million to $7 million would be more realistic.
The lawyers conceded that Liggett CEO
Bennett LeBow was the first to break ranks
with the industry by admitting the health risks
of smoking and releasing damning internal
"But you know who the next one was, Nick
Brookes," Upshaw said. But the jury heard
nothing during the trial about the company's
efforts to muzzle Jeffrey Wigand, a former top
executive turned whistleblower. His story was
the basis of the movie The Insider, and Kaye
said any mention of Wigand or the movie would
be too prejudicial.
"Companies are taking in billions, and they're coming in front of you wringing their hands. They've become the victims,'' attorney Stanley Rosenblatt said in closing arguments as the landmark two-year trial neared an end.
The judge will deliver instructions to the jury Friday morning, and jurors will begin deliberating in the punitive damages phase of the class-action case soon afterward.
The smokers are asking for up to $196 billion in punitive damages for 300,000 to 700,000 sick Florida smokers.
Philip Morris attorney Dan Webb said a multibillion-dollar verdict would be a "death warrant'' for the nation's five biggest cigarette makers.
Rosenblatt turned that around, saying that the industry has issued the death warrants to millions of smokers and that the jury has found the malignancy by putting the industry under the microscope.
In his closing words, Rosenblatt told jurors this was "no time for timidity'' and asked them to "wipe out 50 years of treachery'' by the industry.
The defendants have said they could afford only $150 million to $375 million; the difference between their assets and liabilities on their balance sheets is a combined $15.3 billion; and witnesses for the smokers testified Big Tobacco can afford to pay about $150 billion.
Brown & Williamson was the last cigarette maker to offer closing arguments, asking the jury Thursday to make it pay the smallest amount based on the company's lowest rank by profits among the defendants.
Attorney Gordon Smith said 7,000 employees are working to make Brown & Williamson a responsible company, and pleaded: "I ask that you don't kill that dream. Don't stop a better future.''
Rosenblatt told the jury: "They're lying about change, and they're lying about being poor.''
The judge brushed aside an industry request for a mistrial based on a headline in Thursday's Miami Herald that said the cigarette makers could afford to pay billions. None of the jurors spoke up when the judge asked if anyone had seen any news coverage of the trial since Wednesday.
MIAMI (AP) -- Tobacco companies have consistently
opposed changes proposed by an activist Catholic priest
at annual meetings for two decades, he testified Thursday
for smokers seeking punitive damages.
The Rev. Michael Crosby, tobacco coordinator with the
Interfaith Center on Corporate Responsibility, has raised
issues about smoking-related disease, addiction and
youth and Third World marketing at corporate meetings
" They have not changed in any way relating to health
claims or marketing to youth, " the Milwaukee priest said.
Executives confronted at shareholder meetings " refuse to
answer the issue of causation."
On cross-examination, Crosby said he withdrew a
shareholder resolution this year calling for retail cigarette
displays behind counters after negotiations with
The company committed to supporting any state
legislation modeled on a Texas law requiring cigarettes to
be kept behind counters or within view of a clerk if all
tobacco products were in the same place.
" It was what we consider a baby step, but it was
something we had not seen before, " Crosby added later.
"They may have made a baby step but no substantial
Michael Cummings, head of a cancer prevention program
at the Roswell Park Cancer Institute in Buffalo, estimated
693,000 Florida residents had smoking-related illnesses
or died of them in the 1990s.
A previous witness estimated there were nearly 300, 000
smoking-related deaths in Florida in the 1990s.
Neither number took into account the four-year statute of
limitations running from 1990 to 1994 in the case, but
Cummings said his number would stay fairly stable as
fresh smokers get sick and sick smokers die.
MIAMI -- Ordering the nation's five largest
cigarette companies to pay sick smokers $154
billion would break the companies and
extinguish research to find a less harmful
cigarette, their attorneys told a jury on
The attorney for R.J. Reynolds Tobacco Co.
said the company cannot pay a huge punitive
damage award to the 300,000 to 700,000 ailing
smokers involved in the class action because it
has more debt than ready cash.
"Like many individuals, Reynolds is living
paycheck to paycheck," James Johnson said.
Johnson and the other tobacco attorneys
have told the jurors that the companies have
already been punished for their past deeds by
agreeing to pay $254 billion to all 50 states
during the next 25 years. And the industry has
already begun to make reparations, they said,
for conspiring to hide the health risks of the
dangerous product produced by the cigarette
The attorneys outlined tobacco company
efforts to use their Web sites to communicate
the health risks of smoking and each
company's efforts to prevent youth smoking.
Johnson then gave his definition of
"It's not for vengeance or revenge," he said.
Likening it to the duty of a parent, he said: "We
do it to let them know what they did is wrong.
To mold them, to guide them in the future."
In this case, he said, "punitive damages are
unnecessarily and unilaterally
The attorney for Philip Morris, the largest of
the five companies, asked the jury not to make
the members of the class action instantly
wealthy with an unduly massive punitive award.
"You'd be passing a message on to smokers
that if you continue to smoke, don't quit, you
can become instant millionaires above and
beyond compensatory damages."
"Don't do it," Webb urged the jurors.
Stanley Rosenblatt, the lawyer representing
the sick smokers in this first smokers' class
action to go to trial, wants the companies to
pay between $123 billion and $196.8 billion in
The Philip Morris attorney suggested that if
the jurors insisted on levying punitive damages,
$75 million to $300 million would be a more
The attorney for Lorillard tobacco company
suggested that $46 million would send a strong
message to that company, without putting it
out of business.
"Can you imagine what a used tobacco
machine goes for when five tobacco companies
have to sell them to try to get $154 billion?"
asked Ken Riley, the Lorillard attorney.
Aaron Marks, an attorney for Liggett Group,
called Rosenblatt's request unbelievable,
disappointing and shocking, considering the
company's break with the rest of the industry in
1997 when its chief executive officer became
the first industry insider to admit to the dangers
Brown & Williamson attorneys are expected
to make their closing argument today. They will
be followed by Rosenblatt's rebuttal to the
tobacco attorneys' summations. The jury could
begin deliberating Thursday afternoon.
The attorney who has been battling the nation's top five
cigarette-makers in a Miami courtroom since October 1998
totaled up the damages he says that the companies should
pay Florida smokers yesterday.
And the bill came to an unprecedented $154 billion.
Stanley Rosenblatt said in his closing arguments in the
class-action suit over whether the companies deceived
smokers that jurors should consider a range of $123 billion
to $197 billion in punitive damages. But he deemed $154
billion as an ''appropriate, just number.''
''They think you're going to think that billions are just for the
Wall Street people, just for the investment bankers,''
Rosenblatt told the six jurors, referring to the tobacco
companies. ''Hopefully, you're going to show them that
regular people, not engaged in high finance, are not
intimidated by these numbers.''
Rosenblatt said that his damage estimates are based on the
companies' net worth, cash flow, capability of raising wealth,
financial resources and trademarks.
Among the most valuable thing Philip Morris owns is the
trademark for Marlboro, Rosenblatt said, arguing that Marlboro
is as widely recognized around the world as Coca-Cola is.
Reynolds' top trademarks are its Camel, Doral, Winston and
Salem brands. One plaintiffs witness, financier Joseph
Cherner, estimated the value of one market-share point at
$1.5 billion. By that standard, Reynolds' brands are worth
Rosenblatt said that net worth is only one portion of a
company's financial resources.
Florida law prohibits a jury from bankrupting a company.
In beginning his closing arguments, Rosenblatt said, ''The
day of reckoning has arrived.''
He tried to persuade jurors that the companies can afford his
multi-billion-dollar request, and he tried to make the jurors
comfortable with awarding such high damages. He assured
them that ''tobacco companies are not going anywhere.''
''We live in the real world, and there are 45 million
smokers still in the year 2000. They're not going
Aside from the financial details, Rosenblatt argued that the
companies haven't changed their conduct. For instance, they
still advertise in such magazines with high youth readership
as Sports Illustrated and Rolling Stone.
Additionally, such CEOs as Mike Szymanczyk of Philip Morris
Inc. and Andrew Schindler of Reynolds still won't admit that
cigarette smoking is addictive and causes lung cancer,
YOUTH-SMOKING prevention programs, less risky cigarettes
and health warnings on company Web sites are not genuine,
''Whatever changes have occurred are basically
public-relations changes,'' he said.
He argued that even if the tobacco companies have spent
millions on prevention programs and advertisements, the jury
should remember 50 years of fraud and outrageous conduct
that it found them liable for a year ago.
''What these defendants need to be punished for are five
decades of misconduct, five decades of lying, cheating and
misrepresentation, that resulted in diseases and death to
hundreds of thousands of Floridians,'' Rosenblatt said. ''The
level of punishment should fit the level of wrongdoing.''
Rosenblatt also attacked Eclipse, the less-risky cigarette that
Reynolds is marketing and which is a cornerstone in the
company's defense strategy.
If Reynolds is financially devastated, company attorneys
argued, the company could not invest in less-risky cigarettes
such as Eclipse, which the company says heats tobacco and
produces less smoke.
Reynolds doesn't expect Eclipse to succeed and is using it as
good public relations, Rosenblatt argued. For the first time in
the trial, three tobacco CEOs sat in the courtroom yesterday.
They were Szymanczyk, Nick Brookes of Brown and
Williamson Tobacco Corp. and Martin Orlowsky of Lorillard.
EXCERPTS from The Sun-Sentinel, July 12, 2000, writer John Holland, headlined: $75 million is `fair,' tobacco company attorney says in Florida smoking trial
The nation's largest tobacco
company shouldn't be punished too harshly for
hurting a half-million Florida smokers because
there will be no money left to pay millions
nationwide who have been ravaged by
cigarettes, a lawyer said Tuesday.
Speaking to jurors who twice ruled against
his client, Philip Morris attorney Dan Webb
was left during closing arguments to essentially
beg for the company's survival. He said Philip
Morris and its 13,000 employees have been
punished enough for past mistakes, adding the
industry faces potential liabilities of $2 trillion in
Florida alone, based on the jury's verdicts in
the first two phases of the trial.
But if jurors insist on retribution against the
company, an award of $75 million would be the
"fair share" Philip Morris should pay, Webb
said. That figure is based on testimony that
only five percent of all smokers in the country
live in Florida, and amounts to five percent of
the total the company said it could afford to
Webb's proposal, expected to be the largest
of the five tobacco companies named in the
lawsuit, would fall far shy of the $154 billion
requested Monday by attorney Stanley
Rosenblatt, representing the smokers. Lawyers
for R.J. Reynolds and other companies are
expected to continue their closing arguments
today at Miami-Dade Circuit Court.
Enough is enough, Webb told jurors, while
agreeing the company's products cause cancer
and have hurt millions.
Philip Morris can pay no more than $1.5
billion to all smokers nationwide, he said, or
the company would go out of business, costing
shareholders $60 billion and 13,000 employees
their jobs. Leave some money for the other
plaintiffs, he told jurors.
"You're supposed to make it hurt, not destroy
the entire company," Webb told jurors. "A big
verdict here would prevent Philip Morris from
paying compensation to the other smokers in
other states. If you give Florida its proportionate
share, then $75 million would be fair if you
disagree that there should be no punitive
damages at all."
Webb said the company should not pay any
damages because it has changed drastically
since the days when it denied smoking caused
cancer and deceived the public about the
dangers of smoking. He said Philip Morris
spent more than $100 million last year in
advertising and other programs aimed at
stopping teen smoking.
The company also voluntarily lifted
advertising from 42 national magazines to avoid
even the possibility that children would see the
displays. He spent hours Tuesday contrasting
what he called the "old" Philip Morris that
arrogantly targeted teenagers with the "new"
company, which is committed to stemming
On top of that, the company faces permanent
government oversight because of its settlement
with the states and must comply with new
guidelines, he said.
"If we've changed the conduct that you
obviously severely criticized in phase one of the
trial, that's a powerful reason not to impose
punitive damages," Webb said. He said the
company has pulled ads deemed offensive by
Rosenblatt and others.
"In the old days, I don't think Philip Morris
would have listened, but this is the new Philip
Morris," he said. "We're selling a dangerous
product out there in the marketplace. If we were
selling candy, we wouldn't have to listen to
During the trial, industry executives admitted
that cigarettes cause cancer and claimed they
were intent on lowering the number of smokers
in the country. Industry critics argue that if they
truly wanted to curtail smoking, they'd stop
Rosenblatt, who gets the final word with
jurors after tobacco lawyers are finished later
this week, frequently objected to Webb's
Asked what he thought about Philip Morris'
proposal of $75 million, he said, "you can't print
what I think about their numbers in the
An attorney for the nation's largest cigarette company decried the idea of a $154 billion damage award for Florida's sick smokers Tuesday, calling it "a death warrant'' for the besieged tobacco industry.
Philip Morris lawyer Dan Webb railed against the record figure recommended to Miami jurors by the smokers' attorneys, claiming such a massive judgment would wipe out the tobacco companies sued in this 2-year-old, landmark class-action trial.
"That is not a request for a reasonable amount of punitive damages; that is a request for a death warrant from each of these five companies,'' said Webb, who put their combined value at $15.2 billion. He reached that figure by subtracting the companies' liabilities from its assets.
"That amount -- $154 billion -- is a death warrant because that amount will destroy each of these companies, not once, but 10 times over,'' Webb told jurors.
Webb, admitting he was angry that smokers' attorneys Stanley and Susan Rosenblatt demanded such massive punitive awards, at first said the tobacco industry should pay nothing to Florida's estimated 500,000 sick smokers. He said the companies, found liable a year ago by the same jury for deceiving the public about the dangers of smoking, have corrected their past misconduct and therefore should not be punished further.
But later Tuesday, Webb said $75 million would be "a fair amount'' for Philip Morris itself to pay in damages based on its available cash and its percentage of customers living in Florida.
The Rosenblatts asked Philip Morris to pay anywhere from $75 billion to $118 billion as part of its share of the proposed damage awards. But Webb accused them and their clients of greed, saying any punitive award would be "rewarding people for making a very risky lifestyle choice.''
Webb, who argued that Philip Morris has become a better corporate citizen with its youth prevention smoking programs and other initiatives, was the first of five tobacco lawyers to deliver closing arguments in this closely watched trial. Today, he will be followed by lawyers for R.J. Reynolds, Lorillard, the Liggett Group and Brown & Williamson. Philip Morris, whose biggest selling brand is Marlboro, sells half the cigarettes in the country.
Stanley Rosenblatt, who will be allowed to make a rebuttal argument Thursday, will likely counter that Big Tobacco itself has issued "a death warrant'' to millions of smokers across the country since the 1950s by lying to them about the addictive and deadly nature of cigarettes.
On Monday, Rosenblatt said an "appropriate, just number'' to punish the industry would be $154 billion. But he also proposed a range for the jury to consider -- $123 billion to $196 billion.
Webb, pointing to a sign in the courtroom that reads "We who labor here seek only truth,'' accused Rosenblatt of seeking only money. Citing the Miami attorney's proposed $154 billion damage award, Webb said: ``It does nothing more than invite you to become a runaway, out-of-control jury.''
Miami-Dade Circuit Judge Robert Kaye could give deliberation instructions to the six-person jury as early as Thursday.
Whatever the jurors decide, if the judge determines the damages could bankrupt the tobacco industry, Kaye could lower the awards under Florida law.
Moreover, the state Legislature and Gov. Jeb Bush recently made it easier for Big Tobacco to appeal any astronomical damage verdict. Under the new law, cigarette companies will have to come up with $100 million to appeal any judgment, not the whole award, as required in the past.
Any appeal could take two years to wind through Florida's courts.
A $102 million wrongful
lawsuit against the R. J. Reynolds Tobacco
Co. is expected to be in the jury's hands this afternoon.
The case, in which a three-pack-a-day smoker's widow claims his death was caused by cigarettes, began June 23 before Circuit Court Judge George Carlson Jr.
The lawsuit concerns
death of Joseph Lee Nunnally, 37, who died Sept. 1, 1989, about
months after he was diagnosed with lung cancer.
Nunnally had three tumors on his right lung, one almost 6 inches across and two others slightly larger than an inch in diameter.
Three years earlier, an
of his lungs showed no tumors. Nunnally, testimony showed,
smoking at the age of 8 and eventually
smoked three packs of cigarettes a day.
In testimony Monday,
Thomas L. Bennett, a forensic pathologist and
former Mississippi medical examiner, testified the large tumor was more
likely a sarcoma than a carcinoma.
Sarcomas are not
to be related to smoking, but carcinomas are.
Bennett, who has testified in two previous tobacco cases and served as a
consultant in two more, said he receives $150 an hour for reviewing
documents and $250 an hour for his testimony.
Dr. George Seiden, a
La., psychiatrist, said he had performed a "psychological
on Joe Nunnally by reading depositions given by
family members, friends and Nunnally's associates, including his
Seiden said the
case was the 10th or 12th tobacco case he's
testified in, always for tobacco companies.
He said he receives $250 an hour to review documents and $350 an hour for his testimony. He estimated he has spent about 70 hours on the Nunnally case, for a tab of about $25,000.
Nunnally could have
smoking at any time, he said. "There's a lot of
evidence from the fifth grade forward that he was aware of the dangers,"
Seiden conceded it's
for some people to stop smoking, but he said he
had never met anyone who could not stop.
He discounted nicotine
an addictive drug, contending that nicotine
leaves the body after 10 hours without smoking.
EXCERPTS from Winston-Salem Journal, June 24, 2000, writer Adrian Zawada, headlined: Philip Morris official: We intended no deception - Company hasn't tried to mislead public about tobacco, she says at trial
Philip Morris Inc. never intended to deceive or mislead the American public, a top company executive said yesterday in a Florida class-action suit against tobacco companies.
However, Philip Morris should have supported public-health authorities sooner when they warned the American public that smoking causes cancer, said Ellen Merlo, the senior vice president of corporate affairs for Philip Morris.
''I wish we had taken the position of causation and addiction, that we're currently taking, sooner,'' Merlo told the jurors under cross-examination from smokers' attorney Stanley Rosenblatt. ''But I can tell you with all sincerity, Mr. Rosenblatt, that it was never our intention to lie or mislead anyone.''
Tobacco company attorneys are hoping to prove to the six jurors that Philip Morris is actively working to prevent youth smoking and inform the public about its cigarettes, and therefore doesn't deserve punishment. Merlo was the second Philip Morris executive to take the stand in the punitive-damages phase of the trial, following CEO Mike Szymanczyk's testimony last week.
In 1968, the U.S. Surgeon General's Office said in a historic report that cigarette smoking is the main factor in causing lung cancer. Although Philip Morris supported the public-health position last year, the company has never admitted causation.
In an unusual turn, Merlo acknowledged that smoking causes disease and is addictive, which Szymanczyk and the company haven't done. ''I'm not a doctor, I'm not a scientist, but I do believe smoking causes disease and therefore it is entirely possible a member of this class contracted disease as a result of smoking,'' Merlo said.
It's probable that she made that admission to impress the jury to minimize the eventual punishment, said Ed Sweda, an attorney with the Tobacco Products Liability Project in Boston.
In his cross-examination, Rosenblatt held up a copy of a current Virginia Slims ad he has referred to throughout the trial, ''Never let a goody two-shoes get you down.''
Rosenblatt asked Merlo who are the ''goody two-shoes'' referred to in the ad. ''I don't know,'' Merlo said. ''It's just a line, an advertising line. It's not intended to be any more than that.''
Rosenblatt suggested that Philip Morris pulled advertisements last month from 42 magazines popular with youth, such as ESPN Magazine and Rolling Stone, just to prove that the company is cleaning up its act and doesn't deserve deterrence. ''It was unconnected to this trial,'' Merlo said. ''We did it because that is how we're operating under our policy.''
EXCERPTS from The Associated Press, writer, Catherine Wilson, in The News and Observer, June 27, 2000. headlined: Smokers' attorney: Nabisco buy shows tobacco industry is 'loaded'
The purchase of the nation's biggest
cookie and cracker maker by two cigarette makers
shows tobacco companies are "loaded with money" to pay a
large punitive damage award to sick Florida smokers,
the attorney for the smokers said Monday.
"It indicates what was said all along: 'loaded with money,"'
smokers' attorney Stanley Rosenblatt said before court
convened. "They have it."
Philip Morris Companies Inc. and R.J. Reynolds Tobacco Co.
announced plans Sunday to split up Nabisco for $24.7 billion.
Philip Morris also will absorb $4 billion in debt.
Tobacco witnesses have challenged estimates by smokers'
witnesses that the industry could afford to pay $150 billion
to $157 billion in damages. Industry
attorneys want to pay nothing, citing a $254 billion commitment
to settle state lawsuits.
Tobacco testimony about falling stock prices and low
company valuations demonstrate "they're just focusing
in on a lot of fiction," Rosenblatt said.
In Monday's testimony, a videotaped deposition from
pulmonologist David Burns,
a participant in every surgeon general's report on smoking
since 1975, was played by Liggett Group Inc. to bolster its
position as the industry maverick.
Liggett's decisions to stop all advertising, acknowledge
an industry history of youth marketing and say smoking is
deadly and addictive are "not simply rhetoric," said Burns.
"It is only once you acknowledge the truth that you can pick
up and move forward."
The trial will be in recess until Wednesday when Lorillard
Tobacco Co. CEO Martin Orlowsky, the last of five tobacco
chiefs, is to be called. The industry expects to rest
Thursday after nearly three weeks of defense testimony.
The disclosure of the final witnesses means the tobacco
companies are calling no experts on their financial worth
or the size of the smokers' group, estimated by
smokers' witnesses at 300,000 to 700,000.
From the industry's perspective, the jury will be left to gauge
those numbers from the testimony of company employees and
the cross-examination of smokers' witnesses.
EXCERPTS from The Journal Business Reporter, June 22, 2000, writer Adrian Zawada; headlined, RJR gets setback to its defense - Judge bars using research to prove that it shouldn't be punished
Judge Robert Kaye prohibited testimony on Targacept Inc., an
RJR subsidiary, before Donald deBethizy, the vice president of
product evaluation at RJR, took the stand in the
punitive-damage phase of the
suit. RJR's research into the medical and therapeutic benefits
of nicotine has nothing to do with the jury's findings on
cigarettes, Kaye said.
''Your company may be developing new gasoline for cars, but I
don't really care,'' Kaye told RJR attorney Ben Reid. ''I want to
relate this strictly to cigarettes, the tobacco industry, the
product that people picked up and smoked, because that's
what this case is about, not any spinoffs of scientific work.''
RJR attorneys are using Eclipse to demonstrate the company's
commitment to producing less risky products, a commitment
that they say would be threatened by a multibillion-dollar
SMOKERS' ATTORNEY Stanley Rosenblatt criticized the
scientific panel that reviewed RJR's findings on Eclipse, which
the company has said may reduce the risk of lung cancer,
chronic bronchitis and emphysema.
Although RJR said that the panel was independent, Rosenblatt
hammered on the point that its chairman, Bernard Wagner,
has been a paid consultant with the company since
In his testimony, deBethizy disputed medical expert Michael
Cummings' statements that Eclipse cigarettes contain glass
fibers that aren't soluble and can cause lung inflammation
when smokers inhale the cigarette.
In the product's defense, deBethizy said that all of Eclipse's
fibers are larger than three microns, which is the size they
would have to be to enter the lung, he said. In addition, the
fibers are soluble and not toxic, he said.
Rosenblatt showed the court an internal company memo that
deBethizy signed in 1991, which discussed stemming the
market-share decline RJR was experiencing.
''One can only imagine the market share we would get if our
products were uniquely perceived by the consumer as being
less hazardous to their health relative to competitive products,"
the memo stated.
Throughout the trial, Rosenblatt has argued that tobacco
companies have a long history of marketing less risky
cigarettes, beginning with the introduction of filters and then
light brands, which he said smokers just end up puffing more
often and more deeply to absorb the same nicotine levels.
DeBETHIZY ADMITTED that smokers take more frequent and
deeper puffs when smoking Eclipse.
However, ''we would not be able to market a product on just
the perception of less risk,'' he said in response to the memo.
In the same memo, deBethizy stated, ''It is evident that another
critical factor in the declining market is increasing health
consciousness, a very important attribute of the 1990s
consumer.'' Rosenblatt suggested that RJR made its first
health claims on Eclipse in April 2000 so that the
company could introduce the scientific evidence in the trial's
He asked deBethizy whether the Miami jury's historic verdict
on April 7 to grant $12.7 million in compensation to the three
lead plaintiffs contributed to the timing of RJR's marketing
expansion of Eclipse to Dallas-Fort Worth and the Internet,
which RJR announced about a week later.
''Absolutely not,'' deBethizy said.
Rosenblatt continued suggesting that RJR expects Eclipse to
fail, just as Premier, a similar RJR product, did.
Premier failed partly because it didn't have the support of the
public-health officials who ''were trashing Premier,'' deBethizy
said, and Eclipse is an improved product based on Premier's
''WE HAD TO PERSUADE the public-health community, who
had abandoned the reduced-risk cigarette approach in the late
'70s for smoke-free society in the year 2000,'' deBethizy said.
''There are 45 million Americans smoking in the year 2000.
That approach has failed. An alternative like Eclipse should be
DeBethizy said he made about $220,000 last year, and his
salary and bonuses have increased in the past two years. On
Monday, Schindler said he made $2.15 million last year.
Rosenblatt will probably argue that salary raises prove that
RJR is financially robust.
Yesterday morning, the marketing coordinator of the Jaycees
in Tulsa, Okla., testified about the positive effects of a youth
smoking-prevention program for sixth-graders sponsored by
Brown and Williamson Tobacco Co.
Magen Kelsay admitted under cross-examination that she
gets a 2 percent to 5 percent share of the money she attracts
to the Jaycees.
Brown and Williamson contributed $300,000 to the Jaycees'
smoking-prevention program, she said.
Excerpts from The
Sun-Sentinel, June 20, 2000, writer Terri Somers,
headlined, Exec defends Big Tobacco, spars with lawyer
Unrepentant, the chief executive officer of R.J.
Reynolds Tobacco told a Miami jury it was time
he spoke up on behalf of the hardworking,
honest people of integrity with whom he has
worked the past 25 years.
"I've been at the senior-executive level for 12
years, and I've never been invited to the
conspiracy to defraud," Andrew Schindler
testified before a jury that already has ruled the
country's top five cigarette makers conspired to
hide the health risks of smoking.
"I've never seen it. And I've never experienced
it," Schindler told the jury that now must decide
how much the companies should pay as
punishment for their actions.
Schindler, who heads the nation's
second-largest cigarette company, was the
third of five tobacco CEOs to take the stand in
defense of the industry being sued by 300,000
to 500,000 ailing Florida smokers.
Later this week, state Attorney General Bob
Butterworth, once a dogged foe of Big Tobacco,
is expected to testify on behalf of the Liggett
Group, the smallest of the five companies on
trial. He is expected to tell the jury about the
role Liggett CEO Bennett LeBow played in
negotiating a legal settlement with the
attorneys general of all 50 states.
Under that agreement, the tobacco
companies will pay $254 billion to the states
over the next 25 years. Tobacco lawyers have
said they worry the jury hearing this case could
order them to pay at least another $100 billion
in punitive damages to the members of this
class action. And they have often referred to
the attorneys general settlement, saying it is
But on Monday, when Stanley Rosenblatt,
the lawyer representing the sick smokers,
raised his voice and dramatically challenged
Schindler to admit R.J. Reynolds' wrongdoings,
the CEO raised his voice to an equal decibel.
"I've never been involved in the fraud or
misrepresentation you're alluding to," said
Schindler, who has worked for the parent
company of R.J. Reynolds for 26 years.
He also denied Rosenblatt's assertions that
R.J. Reynolds' Joe Camel campaign targeted
Schindler and Rosenblatt battled several
rounds before the jury Monday. Although the
jury previously ruled smoking causes lung
cancer and more than 20 other diseases,
Schindler would not agree to such specific
allegations. He also said cigarettes were not
addictive like heroin or cocaine. Instead, he
compared tobacco to caffeine in terms of
"There are significant and inherent health
risks to this product, and we have an obligation
to work on eliminating that risk. And that's what
we've been doing," Schindler said. He touted
the company's development of the product
Eclipse, a less toxic cigarette that has not
shown much success despite the $1 billion the
company spent in development and promotion
during the last several years.
Schindler snapped back when Rosenblatt
called the product a "public-relations ploy."
"That implies that some product I had access
to in the past could have been marketed to
smokers to reduce the risk of illness, " he said,
denying there was one.
At one point, he asked Rosenblatt whether
perhaps he had some better ideas he might
want to share with the company. "I'd be happy
to try it out," Schindler said.
"No, you wouldn't," Rosenblatt responded.
Schindler quipped, "You have an idea?"
Rosenblatt didn't miss a beat: "I sure do. Get
rid of the product. It's a killer. It's an addictive
killer that you sell, promote, manufacture."
"Enough," interrupted Miami-Dade Circuit
Judge Robert Kaye.
In another exchange, Schindler encouraged
Rosenblatt to lobby for the banning of tobacco,
if that is what he thinks society really wants.
"In the meantime, it is a legal product,"
The head of the tobacco company
that tried everything in its power to muzzle a whistleblower told a
jury on Friday that everyone at Brown &
Williamson has integrity
and would not lie or conspire to hide the link
between smoking and cancer.
And even though CEO Nicholas
G. Brookes testified a day earlier that
cigarettes are addictive
and apologized that his company had not made the
admission earlier, the
company officer admitted under
cross-examination that he
disagrees with the American definition of
Taking the witness stand in Miami-Dade Circuit Court for his second day of questioning, Brookes said there is no truth to "egregious allegations" that have been "floating around" for years about his tobacco company.
But former Brown & Williamson executive Jeffrey Wigand told network television's 60 Minutes a different story of perjury, conspiracy and the chemical spiking of tobacco to make cigarettes more addictive. His tale, and the company's use of a confidentiality agreement to try to prevent his story from being aired, spawned the movie The Insider.
There was no mention of Wigand or the movie in this trial, because Miami-Dade Circuit Judge Robert Kaye ruled it would be too prejudicial.
So Stanley Rosenblatt, the
lawyer representing 300,000 to 500,000 ailing Floridians who sued the
cigarette makers, played the role of accuser and
"Do you admit Brown & Williamson lied on the issue of causation?" Rosenblatt asked Brookes, referring to the link between smoking and sickness.
Pointing out he has been
the company's CEO for only five years, Brookes
said: "I can
tell you that I, or anyone else, have not lied."
All the people he has met
during his tenure at the company are
"professionals who would
have acted with integrity in their decisions, even
before I got there," he
But he made these declarations to a jury that already ruled otherwise.
The jury, which now must
decide how much the five tobacco companies should pay as punishment for
sickening and killing thousands of Florida smokers, already ruled the
manufacture a dangerous product. And they ruled that the companies
to hide the health risks of smoking.
"I'm aware of the jury's opinion and what occurred during the first two phases of this trial," Brookes said. "Obviously, I have a very different perspective."
If he believes the company acted with integrity, Rosenblatt asked, why did he agree to settle lawsuits with attorneys general from throughout the United States and sign an agreement requiring the industry to pay out $254 billion over the next 25 years?
Brookes said he felt pressured
to avoid litigation that would have
bankrupted the company.
And the company wanted to "turn the page on
allegations" of its past
behavior and start talking with public health
officials about addressing
the health issues swirling around tobacco, he
Brown & Williamson, the third largest cigarette company in the country and maker of Kool and Lucky Strike, is now in "a perilous financial situation," said Brookes, who makes about $1.5 million a year. British American Tobacco, its parent company, had to give the American subsidiary a $1 billion cash infusion in 1994, he said. And the parent company gave it another $450 million in 1998, so that Brown & Williamson could make the required settlement payments to the states, he said.
Brookes said he hoped the jury would consider the company's financial condition and the company's work to address public health issues when determining awards.
Tobacco lawyers have said they fear a verdict of more than $100 billion.
Rosenblatt showed the jury
a copy of a speech Brookes gave to cigarette
wholesalers, when the CEO
said he was annoyed with provisions in the
settlement with the
general. The settlement, he said, goes "far
too far in unfairly
The agreement would require the companies to pay a penalty if the rate of youth smoking does not decline, Brookes said. Meanwhile, Brown & Williamson spends about $4 million a year on its own youth smoking prevention program.
"Was the reason you didn't show up and testify in phase one (of this trial) because you were annoyed at being called a wrongdoer?" Rosenblatt asked.
"And now you're subjecting yourself to this because there is a substantial amount of money on the line?"
Gordon Smith, one of the lawyers representing Brown & Williamson, objected to the question and Kaye ruled that Brookes did not have to answer it.
On Thursday, Brookes testified that nicotine is addictive, contradicting statements made by his predecessor.
On Friday, Rosenblatt asked him to recall a 1998 interview with CNN, when the CEO refused to say smoking was addictive.
The word addiction, as it
is used in America, has become "bland in its
meaning," Brookes said.
People in the United States claim to be addicted to
everything from video
to hard drugs, he said.
"People have quit (smoking)," he said. "If you can quit, I don't think addiction is the proper word to use."
"I also testified before Congress that yes, smoking is addictive as the word is understood. But not in the way I would use the word," Brookes said. "Our critics want to know that Brown & Williamson changed. So I'm not going to engage in any quibble about whether smoking is addictive," he said.
EXCERPTS from The Miami Herald, June 16, 2000, writer Martin Merzer; headlined: Tobacco executives admit to 'regrets' / Rare apologies seek court's mercy
Brookes, chairman of Brown & Williamson.
The sign above the witness chair in Miami-Dade Courtroom 6-1 says, "We who labor here seek only truth,'' and one by one, the nation's most powerful
tobacco executives raise their right hands, submit to a tenacious attorney
and a hostile jury -- and make startling concessions.
Never before have most of them testified in open court.
Never before have top tobacco executives acknowledged so publicly and
without reservation that cigarettes are addictive and make people dreadfully
And never before Thursday have they looked directly at sick smokers and
apologized for the industry's behavior -- for denying that tobacco is harmful and for failing to accept anti-smoking initiatives more rapidly and comprehensively.
"I do have regrets,'' Nicholas Brookes, chairman of Brown & Williamson
Tobacco Corp., told a galvanized courtroom. "I have sincere regrets that
many of the things we are now embarked on doing could have been done
His eyes did not leave the front rows of the gallery. One former smoker
sat there in a wheelchair. Others had electronic voice boxes taped to their
throats. Some people wore buttons made from photos of dead relatives.
Brookes: "To the extent any of those things either changed your decision
not to quit or would have allowed you to quit smoking sooner . . . or not to
have taken up smoking in the first place, then I sincerely apologize to
So, like penitents dragged to the altar, the executives are taking the
stand and seeking mercy.
Michael Szymanczyk, president of Philip Morris Inc., the nation's largest
tobacco company, testified in Miami-Dade Circuit Court this week that
tobacco is indeed harmful, an opinion accepted by most people but eternally
rejected by tobacco executives.
"Smoking is bad for your health,'' he told jurors.
Scientists blame tobacco for the deaths of 335,000 Americans every year.
Brookes followed him to the stand Thursday. He wore a charcoal gray suit, a blue shirt, a blue and maroon tie, and brown framed glasses.
He has worked for Brown & Williamson for 22 years. He earns $1.5 million
each year. He spoke with a crisp British accent, turning frequently to his
left, addressing the jury directly and with deference.
Question: "Does smoking cause disease?''
Brookes: "Smoking is a cause of lung cancer and other diseases.''
"Is smoking addictive?''
Two years ago, Brookes told Congress: "I wouldn't personally, in a
serious debate about smoking, label tobacco as addictive.''
Stanley Rosenblatt, the plaintiffs' attorney, questioned
the sincerity of Brookes' apology to sick smokers.
"Every day,'' Rosenblatt said, "you're creating new victims.''
Brookes retreated, saying adults know the risks and have a right to
Three years ago, Rosenblatt thrashed the industry in the flight
attendants' secondhand smoke trial. Once again, he and his wife and partner, Susan, sit on one side of the room.
On the other side, nine tobacco lawyers gather around the defense table.
A dozen other tobacco lawyers and public relations specialists sit directly
A former actor, Rosenblatt pouted theatrically Wednesday when tobacco
lawyer Dan Webb accused him of being argumentative as he went after
"I'm not being argumentative,'' Rosenblatt told Circuit Judge Robert
"I just raised my voice. That's how I talk.''
Still to come before the jury:
Andrew Schindler of R.J. Reynolds Tobacco, who once said tobacco was no more addictive than carrots, and another executive -- Martin Orlowsky of
Lorillard Tobacco -- who smoked a pack of cigarettes a day, failed twice to
kick the habit, and denied that tobacco was addictive.
Those opinions, expressed in 1993 and 1997 in sworn depositions, are
likely to shift now.
So are the opinions expressed in 1994, when top executives of the seven
largest U.S. tobacco companies took the oath and told a congressional
subcommittee that cigarettes are not addictive or harmful.
None are in power any more, but their successors stuck to the party line
April 14, 1994, William Campbell, president of Philip Morris Inc.,
speaking to Congress: "Philip Morris research does not establish that
smoking is addictive.''
June 14, 2000, Szymanczyk, speaking in Miami and asked by his lawyer if
Philip Morris now admits that smoking is addictive: "Yes.''
For tobacco executives, the times truly are changing, though some
observers believe the changes are cosmetic and intended to influence this
Just last week, Philip Morris announced a sharp curtailment of cigarette
advertising in magazines read by children and teenagers.
"It's a real dog and pony show,'' said Edward Sweda, a senior attorney
for the Tobacco Products Liability Project at the Northeastern School of
Law, an anti-tobacco group. "They are extremely concerned about what the
jury is likely to do.''
Known as the Engle case, for plaintiff Howard Engle of Miami Beach, the
suit was filed on May 5, 1994. In October 1998 the six jurors and six
alternates -- people with apparently boundless patience -- began hearing
The jury already has ruled that tobacco is addictive and causes lung
cancer and dozens of other diseases.
It already has found the industry guilty of conspiring to conceal these
health hazards and knowingly selling defective products.
It already has ordered the industry to pay $12.7 million to the first
three representatives of the group of aggrieved smokers -- or their heirs.
forbids the jury to drive the industry into bankruptcy and
Gov. Jeb Bush recently signed a law that allows the companies to post no
more than $100 million during an appeal.
First up was Szymanczyk.
Speaking softly and nearly always in perfect sentences, he testified
about the plight of his industry, already undermined by a $246 billion
settlement of suits filed by state governments.
"Right now,'' he said, "Philip Morris has no borrowing power at all.''
He said Philip Morris has changed its attitudes and culture, and now
intends to be a responsible corporate citizen.
Still, his admissions went only so far.
Szymanczyk denied that his company ever marketed cigarettes to under-age smokers. He denied that it ever misled Americans about tobacco's health effects. He denied that it ever joined other companies in concealing damaging information about tobacco.
Unlike Brookes, he refused to apologize for his company's past behavior.
Any such statement, he said, would appear "pretty insincere.''
Excerpts from The Sun-Sentinel, June 7, 2000, writer Terri Somers; headlined: Tobacco Industry Profits Soaring, Jury Told In Smoking Trial
The future looks
rosy" for the country's five biggest tobacco companies, which are worth
about $157 billion, a University of Miami Law School professor told a
that must decide how much the cigarette makers should pay as punishment
for making a cancer-causing product.
Cigarette consumption may be down, but profits are up more than 57 percent since 1998, said George Mundstock, the finance professor.
The U.S. business alone of Philip Morris, the world's largest cigarette
maker, is worth about $80 billion, Mundstock said. Morris has 49 percent of
the domestic cigarette market.
that R.J. Reynolds Tobacco Co., with 24 percent, is worth $36 billion;
Brown & Williamson Tobacco Corp., with 14 percent, is worth $22
Lorillard Tobacco Co., with 11 percent, is worth $17 billion; and
Group Inc., with 1 percent, is worth $1.8 billion.
On cross-examination by tobacco company lawyers, Mundstock conceded he based his calculations of company values on projected profits. He said he included not just the cash they had on hand, but how much they could borrow to pay a court judgment against them.
With the jury out of
courtroom on Tuesday, tobacco lawyers speculated
that the case could wind up costing the cigarette makers more than $1
trillion in total punitive and compensatory damages for 300,000 smokers.
But Stanley Rosenblatt, the lawyer representing the smokers, scoffed at
tobacco lawyers' talk of doom and gloom.
"Every stock market
is saying this (tobacco stock) is a buy because
it is going to take at least 100 years for all this to be resolved,"
In a move that an
activist described as strategically timed,
Philip Morris announced Monday that the company will pull its advertising
from more than 40 publications, more than 15 percent of whose readers are
younger than 18.
"If this case didn't
the cigarette companies would not be doing
this," said Ed Sweda, lead lawyer for the Tobacco Control Resource Center at Northeastern University in Boston.
Excerpts from The Sun-Sentinel, May 30, 2000, writer Terri Somers; headlined: Tobacco Companies Looking To Filter Deadly Image As Jury Debates Punitive Damages
With hundreds of
of dollars at stake, the country's top five
tobacco companies also are trying to elicit a sympathy for their
They are attempting to
the corporations with the faces of the
factory workers who make the cigarettes and the image of teachers and other dedicated professionals whose retirement funds are tied up in the industry's stock. They also are depicting an industry that has changed and now is actively working to prevent teenagers from picking up the cigarette habit.
In their opening
last week in the punitive phase of this
statewide class action, industry lawyers painted pictures of gloom for all
of those people and their money. And they talked about the $254 billion
shadow cast on the industry by legal settlements it has reached with the
attorneys general of all 50 states.
For the first time it
a group of plaintiffs has found a chink in the
armor that has allowed the industry to go unscathed. And industry lawyers
know they are facing a tough audience.
Now the jury is being asked to decide how much the companies should pay as punishment for their actions and to deter them from continuing business as usual.
The key issue of this
of the trial was summed up early last week by
Dan Webb, the lead attorney for tobacco giant Philip Morris: "The bottom
line of this case, Mr. Rosenblatt and I agree, is whether these tobacco
companies have changed. Have they 'gotten the message.'"
There's been a change
corporate culture, Webb said, presenting charts
showing the company's core values that are supposed to include openness,
cooperation and efforts to prevent teen smoking.
That commitment toward
teens includes a new division within the
corporate structure, funded with $100 million and a company vice president
at the helm, he said.
"It's not some guy down in the basement and (the CEO) said to him go out and deal with this," Webb said.
spent $12 million to develop its youth
anti-smoking plan, and in 1999 spent $8.4 million on it, which is $700,000
more than the company spent in the same year on advertising, said Ken Riley, a company attorney.
called these measures "cosmetic."
"Usually $100 million is a large figure. But in context in the tobacco
industry, and what is at stake for them, many billions of dollars, it's a
wise investment if it is successful in convincing the public, particularly
the policy makers, that they have fundamentally changed the way they do
business," said Ed Sweda, the top lawyer for the Tobacco Control Resource Center, based at Northeastern University in Boston.
"It's principally a
program because there are some fundamental
things they can do that cost a lot less than a $100 million and they can do
it overnight if they really want to reduce the incidence of youth smoking,"
For instance, Philip
could retire the Marlboro Man, the cowboy image
that has become synonymous with the cigarette advertisements, he said.
More than 60 percent of
children who smoke, chose to start by smoking
Marlboro cigarettes over hundreds of other brands, he said.
"That's no coincidence, " Sweda said. "And (the tobacco companies) have not shown any measurable proof their anti-smoking programs have had an effect."
the industry efforts to cut back on advertising,
especially the promotional material thought to entice young smokers.
Under a $426 billion settlement with 46 states, and $13 billion-plus
settlement reached with Florida's attorney general in 1998, the industry
agreed to give up advertising on billboards, at sporting events and on mass
transit because these venues reach large numbers of young people.
Much of the billboard space had been paid for in advance, according to the
tobacco lawyers. And now that paid space is being used for anti-smoking
campaigns, they said.
But Sweda pointed out
have been a number of studies showing that
cigarette advertisements in magazines increased in the first three quarters
of 1999, immediately after the tobacco companies signed these agreements.
"So the direct message
the studies is that the tobacco companies
shifted their advertising dollars into other means," he said.
The tobacco lawyers
out in court that under the settlement
agreements the attorneys general were given the power to monitor cigarette
advertising and other industry activities. If they see something they don't
like, they have the power to challenge it.
"The attorneys general
the power of investigation and can ensure the
conduct of the past does not occur or continue into the future," said Webb,
the Philip Morris attorney.
The problem, however,
that the agreements are made with individual
attorneys general. Any problem with the cigarette makers must be fought by
an individual attorney general in an individual state.
A few weeks ago,
attorney general finally used that power and
charged RJ Reynolds with violating the settlement agreement by mailing free cigarette samples to people, including those who did not seek them.
And more recently, Brown and Williamson pulled a magazine advertising
campaign for one of its cigarettes because the promotions showed the
cigarettes in human-like poses and situations, which one attorney general
found inappropriate under the agreement.
But how much are the individual attorneys general, and the state governments they work for, willing to challenge an industry now infusing state coffers with billions and billions of dollars?
All this money coming
the states gives the tobacco companies a
tremendous edge with legislators looking to balance their budgets, Sweda
Florida is no exception. Months ago the tobacco lawyers said in court and in trial documents that they feared a huge punitive award in this class action could potentially bankrupt the industry.
Florida law does not
awards in a lawsuit to bankrupt a company. But
that apparently was not enough to quell the fears of Florida legislators.
Last month, state Attorney General Bob Butterworth sent a legal opinion to
the legislators that contradicted the plan that has been laid out for this
class-action trial and was contrary to appeals court rulings that have
already been issued.
A few weeks later, the
legislature passed a law that would protect the
tobacco companies by placing a $100 million cap on the amount the industry would have to post as a bond in order to appeal any damages awarded to the smokers.
Under the previous law, tobacco would have had to post about 120 percent of the award to the smokers in bond. And that could have been billions, which would have had a great impact on the way the companies do business.
"It doesn't bode well
vigorous enforcement of other things under the
(settlement agreements) if they are focusing simply on the dollars coming in
but not the other major purposes of the agreement," Sweda said.
"At this point the
are the only ones left to carry that torch
alone," he said.
EXCERPTS from Bloomberg, May 17, 2000, writer William McQuillen; headlined: Kaye on Tobacco Industry Arguments in Miami Case: Comment
Miami, May 17 (Bloomberg) -- The following are comments by
Florida Judge Robert Kaye, rejecting arguments today by lawyers
for Philip Morris Cos. and other tobacco companies that they
should be permitted to use their $246 billion settlements with the
states as a defense before a Florida jury. The industry hoped
telling the jury in the sick smokers' class-action lawsuit that it
has already been punished enough might help the companies avoid a
multibillion dollar punitive damages award.
"You haven't been punished,'' Kaye told tobacco industry
attorneys. ``You made an agreement. You were not forced to pay
that amount of money against your will.''
The tobacco companies will be allowed, though, to refer to
the settlement payments to illustrate the companies' financial
difficulties, Kaye said.
`You can argue this is part of the amount of money you have
expended and don't have available . . . you can't say you have
been punished enough because of it,'' the judge said.
The industry is trying to say "`We have been punished
enough because we agreed to pay so much money to the states,'''
Kaye said. "You haven't been punished. You made an agreement in
lieu of a lawsuit. (You said,) `I'm going to settle this thing and
pay it.' You did not get punished in any other case . . . you were
not forced to pay that amount of money against your will.''
After Philip Morris attorney Dan Webb continued to disagree
with Kaye's ruling, the judge replied, "Appeal me. What do I
care? I don't want to argue this point with you anymore . . . I've
thought about it. I've thought about it. I've thought about it and
I'm very firm on this position.''
In response to Brown & Williamson's effort to present
evidence on the company's charitable works. "This is the way they
used to run Chicago,'' Kaye said. "Huey Long gave away (a lot of)
money and was the biggest crook in the world. You can go out and
be as charitable as you want and still be a bad guy.''
After an attorney commented he did not remember where they
had left off yesterday, Kaye responded, "Limbo, I think it was.''
18 April 2008
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