EngleUpdate2004

A Florida jury has ordered Philip Morris USA to pay $300 million to a former smoker who developed severe emphysema and may need a lung transplant. The verdict may encourage more plaintiffs and lawyers to bring similar claims. There should be more lawsuits seeking not only monetary damages, but changes in how the tobacco industry markets its products.

Lucinda Naugle began smoking in 1968, when she was 20, and succeeded in quitting, after several attempts, in 1993. Because of her emphysema, she requires 24-hour oxygen and travels by wheelchair. Last week, the jury awarded her $56 million in compensatory damages and $244 million in punitive damages, the most damages for an individual suing a tobacco company.

Florida has become a hotbed of tobacco litigation. A few years ago, its Supreme Court rejected a class-action lawsuit, and a $145 billion plaintiffs’ award, and told the class members they had to sue individually. It said the plaintiffs would not have to again prove important elements of the case, including that nicotine is addictive and that smoking causes illnesses. Those suits are working their way through the courts.

The tobacco industry likes to argue that smokers assumed the risk of smoking, and are responsible for their injuries. But the industry spent years denying that its products were addictive or deadly. It continues to spend billions on advertising, giveaways and other marketing to persuade people to smoke.

Lawyers are often reluctant to represent smokers and former smokers. Suits against the tobacco industry, which is known for its tough litigation tactics, can take years and be extremely expensive. Last week’s $300 million verdict, which could still be reversed or reduced on appeal, provides a strong incentive for others to sue.

Big awards can send a message to the tobacco industry, or be regarded as simply a cost of doing business. Mark Gottlieb, director of the Tobacco Products Liability Project, says more class-action suits are needed, with settlements requiring the industry to finance effective counter-marketing. ...

By the time a plaintiff like Ms. Naugle wins a lawsuit against a tobacco company, the damage is done.

After just three hours of deliberations, a six-person jury in Broward County, Fla. has awarded a plaintiff suffering from severe emphysema $300 million against Philip Morris.

It was the 10th of the Engle cases , which involve individual trials to determine if a plaintiff was addicted to cigarettes and whether or not that addiction caused his or her injury.

If a jury sides with the plaintiff, they are presented with findings that the defendants were negligent, that cigarettes are defective, unreasonably dangerous and addictive, and that the tobacco companies conspired to conceal health and addiction information with the intention of consumer reliance on the misinformation.

Of the eight plaintiffs’ victories to date, this verdict, comprised of $56.6 million in compensatory damages and $244 million in punitives, is far and away the largest.

Juries have awarded $7.8 million , $30 million , $8 million , $1.55 million , $1.3 million , $1.2 million and $5.3 million . There have also been two defense verdicts .

In addition, while juries in prior cases have apportioned fault to the plaintiff ranging from 34 percent to 57 percent, jurors determined that Cindy Naugle was just 10 percent at fault.

Naugle’s attorney Robert W. Kelley, a partner at Kelley Uustal in Fort Lauderdale, said that several factors contributed to the size of the verdict: his client’s powerful testimony, his success in blocking the defense from using its standard juror questionnaire, and, for the first time in an Engle case, a refusal to stipulate to the tobacco company’s own valuation of its net worth.

The verdict is also the largest award for a single plaintiff against a tobacco company, noted Edward L. Sweda, senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston .

While only 10 trials have taken place to date, many more cases are set to be tried in 2010. If similar verdicts are reached, “the tobacco companies will need to re-examine their position of not settling cases,” Sweda said. “They cannot afford to take an unlimited number of nine-digit awards.”

In a written statement, Philip Morris USA said it plans to appeal the verdict.

Lucinda “Cindy” Naugle, 61, began smoking in 1968 when she was 20 years old.

She smoked for 25 years, trying unsuccessfully to quit several times, and only with the help of the nicotine patch finally quit in 1993.

Naugle suffers from severe emphysema as a result of her smoking, requiring her to use oxygen at all times and travel in a wheelchair, Kelley said.

“Her condition affects her ability to do anything and everything,” he said.

Before Naugle even took the witness stand the jury was able to see just how bad her condition was, Kelley said, because after walking the 15 feet from the counsel table to the witness stand, she had to take five minutes to catch her breath before she could testify.

From the beginning of the trial, Naugle took responsibility for smoking and admitted fault to the jury.

But Kelley said he tried to keep the focus on Philip Morris and its behavior, which was “to refuse to accept any responsibility. I don’t think juries appreciate that.”

He also objected to the defense’s use of its standard juror questionnaire, which Kelley estimated contains 100 questions, most of them multiple choice, and runs about 25 pages.

He believes the defense scans the questionnaires and then has its jury consultants and psychologists profile potential jurors for the best advantage.

But having to conduct jury selection the old-fashioned way “put them at an extreme disadvantage,” Kelley said.

Although the trial lasted three weeks, Kelley said his presentation was just two days during the first phase and about a day and a half during phase two. He used one expert during both phases of the trial, who testified about the effects of addiction on Naugle and later “enlightened the jury about the tobacco industry’s 50 years of distorting and denying the truth.”

Naugle’s treating physician, a pulmonologist, also testified about her condition and her prognosis.

“He told the jury that she is going to need a lung transplant and explained the cost that entails and the difficulty of becoming a candidate and waiting for lungs to become available, which can be a long time, or never,” Kelley said.

After the first phase of the trial, jurors deliberated just 45 minutes before determining that Naugle was addicted to cigarettes and that addiction caused her emphysema.

Despite their quick deliberations, Kelley said he felt “very confident” about the verdict. He only gave jurors one suggestion about an award.

Naugle’s doctor testified that it would cost $3.5 million for future medical care, and “I said they should give her the benefit of the doubt on that, and assume she would live as long as possible with a great deal of medical needs, like oxygen and a wheelchair and a possible transplant,” Kelley said. “But I left the rest of it up to the jury.”

They awarded $56.6 million in compensatories.

Kelley intentionally left the jury to its own devices for the punitive award.

“I didn’t give them a dollar amount,” he said. “I told them I have four kids and sometimes I have to punish them. But what they hate the most is when I say, ‘I love you, but you did this bad thing and you know you have to be punished. How do you think you should be punished?’”

He told the jurors to listen to the closing argument from the defense and see how it suggested Philip Morris should be punished. The defense attorneys didn’t suggest an amount, which Kelley said could have been a factor in the size of the verdict.

In all the prior Engle cases, the plaintiffs’ attorneys stipulated to the defense valuation as to the net worth of the company, Kelley said. But he objected, and presented expert testimony from an economist.

The economist testified that Philip Morris, a wholly-owned subsidiary of Altria Group, can manipulate its net worth downward by “sending its assets up” to the parent company. He testified that through the end of the third quarter of 2009, Philip Morris had almost $3 billion in excess free cash (meaning after it paid all its employees and other obligations). Averaged out on a daily basis, that comes to about $10 million per day, Kelley said.

The dollar amount the defense sought to have the plaintiff agree to was significantly lower – $1.6 billion.

After Kelley reviewed the numbers in his closing argument, he reminded jurors they had been in the courtroom for roughly 21 days. $10 million per day over a 21-day period could have formed the basis for the $244 million punitive award, he speculated.

Plaintiff’s attorneys: Robert W. Kelley, Todd R. Falzone and Todd R. McPharlin of Kelley Uustal in Fort Lauderdale , Fla.

Defense attorneys: Tom Quigley of Winston & Strawn in New York and Jennifer Brown of Shook Hardy & Bacon in Miami .

The case: Naugle v. Philip Morris USA ; Nov. 19, 2009; Broward County Circuit Court, Fort Lauderdale , Fla. ; Judge Jeffrey Streitfeld.

The record, so far, hasn't been very good for the tobacco companies in the so-called Engle progeny smoker suits. They've won, by our count, just two of the ten cases to go to trial, and the damages awards have been climbing. The first Engle progeny trial resulted in an $8 million verdict against Philip Morris in February. In August, R.J. Reynolds lost a $30 million verdict. And on Thursday, a Broward County jury ordered Philip Morris to pay a whopping $300 million--$56 million in compensatory damages and $244 million in punitives--to Cindy Naugle, a former smoker who claimed the company's negligence was to blame for her emphysema. Here's Bloomberg's story on the jury verdict.

The Litigation Daily spoke with Naugle's attorney, Robert Kelley of Kelley and Uustal on Friday. We wanted to know, first of all, why this award was so much larger than those in previous Engle trials. One reason, he said, was that this was the first trial in which the jury heard about the "real financial resources" of Philip Morris. The company, he said, claimed that it was worth only $1.7 billion. But he presented witnesses who said that in just the first three quarters of 2009, Philip Morris paid $3.1 billion in dividends to Altria, its parent company. "We broke it down and it was about $10 million a day," he said. "The jury was impressed by the numbers."

The Engle progeny trials resulted from a controversial 2006 ruling by the Florida Supreme Court that decertified the enormous Engle nationwide class action, but held that individual plaintiffs could rely on the class action jury's liability findings against the tobacco companies. The defendants have consistently blamed the state supreme court's res judicata ruling for adverse results in the progeny trials.

Naugle is no exception. ...

Plaintiffs lawyer Kelley, though, disputed the significance of the state supreme court's res judicata ruling. "The findings are worth very little," he said. "We still have to prove that it was the addiction that caused the disease, while [defense lawyers] are saying that it was the choice that caused the disease."

When Cindy Naugle took the witness stand in her lawsuit against tobacco company Philip Morris USA, she toted an oxygen bottle and had to pause a few minutes to catch her breath.

Lawyers for the 61-year-old Naugle say her emphysema is so bad that she needs a lung transplant and can barely walk a few feet without being winded. The cause of her health problems, lawyers argued, was a 25-year smoking habit. Naugle's lawyers said the cigarette maker committed fraud. They said the tobacco company knew - but concealed - that smoking cigarettes is addictive and harmful to a person's health.

Jurors agreed. On Thursday, it took the Broward County panel less than three hours to order Philip Morris to pay Naugle $300 million. It is believed to be the largest award to date among the 7,000-plus lawsuits filed in Florida against tobacco companies.

"If the tobacco industry realizes what their ultimate potential exposure will be, maybe they will decide to do the right thing by these people," said Robert Kelley, the Fort Lauderdale attorney who represented Naugle.

The award amounts to $56 million in compensatory and $244 million in punitive damages against Richmond, Virginia-based Philip Morris USA, a unit of Altria Group Inc.

In a statement e-mailed to the Associated Press on Friday, Philip Morris USA said it would appeal the verdict. ...

Edward L. Sweda, Jr., senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston, said appeals of cases like this often take years.

"Looking at the track record of these cases, the delay really does serve the company's interest and very much does not serve the interest of the individuals, especially if they are very ill or have a serious disease," he said.

Naugle, who is the sister of former Fort Lauderdale mayor Jim Naugle, began smoking Benson & Hedges brand cigarettes in 1958 because she thought it made her look older.

"Her mistake was one of youth," said Kelley.

She tried to quit for 25 years and finally succeeded in 1993 after using a nicotine patch and being diagnosed with emphysema.

Today, she relies on oxygen 24 hours a day and Kelley said Naugle constantly feels like she is "suffocating." A lung transplant will cost at least a half-million dollars.

Legal experts predict that thousands of tobacco lawsuits could gain momentum in Florida after a Fort Lauderdale jury ordered Philip Morris USA to pay $300 million to a former smoker who says she needs a lung transplant.

If it survives an appeal, the verdict late Thursday would be the nation’s largest award of damages to an individual suing a tobacco company and could encourage thousands of plaintiffs who have filed similar cases in Florida, according to Clifford E. Douglas of the University of Michigan Tobacco Research Network.

A state supreme court ruling in Florida a few years ago made it easier to pursue tobacco lawsuits there than in other states. But the tobacco industry, which plans to appeal, appeared unfazed. Tobacco companies have considered product liability suits as little more than a cost of doing business since the seven biggest companies agreed to pay $206 billion in a master settlement agreement with 46 states in 1998.

Florida, despite being one of those states, had a major legal ruling [the Engle trial] in 2006 that lowered a plaintiff’s burden of proof against a tobacco company.

The Florida Supreme Court rejected a class-action verdict and a $145 billion award to plaintiffs, saying smokers would have to sue individually. But the court said plaintiffs would not have to prove some key elements that had been upheld in the first stage of the class action: that nicotine is addictive, that smoking causes diseases, and that cigarette companies fraudulently hid those facts.

“That makes these cases in Florida unique,” Mr. Douglas said. Smokers in other states are still suing cigarette makers, he said, but they have higher legal hurdles.

A spokesman for the Altria Group, the Virginia-based parent company of Philip Morris USA, indicated it would appeal the verdict and said the Florida rules were “fundamentally unfair and unconstitutional.”

Shares of Altria, which had been up more than 27 percent this year, dropped 1.2 percent Friday, to $18.98.

Lucinda Naugle, the 61-year-old sister of a former Fort Lauderdale mayor, was awarded $56 million in compensatory damages and $244 million in punitive damages Thursday after a three-week trial and three hours of jury deliberation in Broward County Circuit Court.

Ms. Naugle, an office manager, had started smoking when she was 20 and quit when she was 45 years old, her lawyer, Robert W. Kelley of Fort Lauderdale, said in a telephone interview Friday. She now has severe emphysema and needs a lung transplant she cannot afford, he said.

The jury assigned her 10 percent of the liability for her smoking and disease, and Philip Morris 90 percent.

“She’ll get paid, I would hope, within a year or two,” Mr. Kelley said. “The question is will she live long enough.”

Mr. Kelley said about 25 more cases were lined up for trial in Florida next year. In all, more than 9,000 people from the former class action filed individual suits in various courts in Florida against tobacco makers by January 2008, the deadline set by the state Supreme Court.

About 4,000 of those cases were filed in federal court and have been stayed, pending a review scheduled in January by the United States Court of Appeals for the 11th Circuit, in Atlanta. ...

David J. Adelman, a tobacco analyst for Morgan Stanley, said the Florida case and, separately, forthcoming class-action lawsuits over light cigarette claims pose an “undeniable” increase in the industry’s legal risk “which had previously declined to an unprecedented low point.”

In an interview, Mr. Adelman noted that there were no jury trials in cigarette cases all of last year, and that other states had decertified class-action suits in ways more favorable to the tobacco industry. Further, Mr. Adelman said, the major legal threats to the industry were removed by the 1998 settlement with states. And since then, the industry has fended off calls in court and Congress for a huge disgorgement of its profits.

Even in light of the Florida verdict, Mr. Adelman said the tobacco industry could afford several hundred million dollars a year in legal losses if it had to. “That is a financially manageable issue,” he said.

Of more concern, he said in the interview and a note to investors, is a coming round of cases claiming fraud and damages from past marketing of so-called light cigarettes.

Those products have been shown to be no less harmful than regular cigarettes because smokers inhale them more deeply. Congress, in landmark tobacco legislation earlier this year, prohibited the use of the terms “light,” “low” or “mild” in all cigarette labeling and marketing, effective June 22, 2010.

The first of the “light cigarette” class-action cases is scheduled in Minnesota next October, followed by Missouri in January 2011.

Bracing for the possibility of big verdicts in nearly 9,000 lawsuits in Florida brought by sick smokers, Big Tobacco is backing legislation that sets a $100 million cap on the collective amount of bonds that would have to be posted to file appeals.

Sen. Mike Haridopolos, a Melbourne Republican, said he sponsored the bill because of concerns that large verdicts could threaten tobacco companies' ability to pay hundreds of millions to Florida each year under a landmark settlement reached in 1997. ''If they have all these verdicts against them, they could be forced to file for bankruptcy and we wouldn't get any of those settlement dollars,'' Haridopolos said.

Losing parties that appeal a judgment are required to post a bond to cover the full amount of damages plus interest. The bond, usually purchased from an insurance company, guarantees the judgment will be paid if the appeals fail. Haridopolos' bill would eliminate the requirement that tobacco companies post a bond in each case once the value of the bonds reaches $100 million. The limit applies to tobacco companies collectively, not individually.

Lawyers for smokers or their survivors contend the tobacco companies face no financial threat because the premium on an appeal bond is generally a fraction of the damages.

''They basically get a free appeal'' after the $100 million is reached, said Stephen Barnes, a Tampa lawyer whose firm is handling more than 450 cases. "This is an extraordinary handout and gift."

Lawyers expect it won't take many cases to reach the $100 million cap. The first of the nearly 9,000 cases went to trial last month in Broward Circuit Court, where a jury returned an $8 million verdict against Philip Morris USA. If enough verdicts of that size happen, Haridopolos said, it will jeopardize Florida's 1997 settlement with Big Tobacco.

The state sued the tobacco industry in 1995 to recover the cost of treating Medicaid patients suffering from cancer or other smoking-related illnesses. The settling companies agreed to pay the state billions. So far, the state has collected about $6 billion. Big Tobacco passed on the cost, about 50 cents a pack, to customers.

Robert Loehr, a Pensacola lawyer whose firm is handling about 45 cases, doesn't buy Haridopolos' reasoning for the bill.

"It sounds as if the legislation is opting for the health of the cigarette industry as opposed to the health of the citizens of Florida," Loehr said. "They are saying they want to make sure they stay solvent to sell deadly products so they can keep paying the settlement."

The nearly 9,000 cases are an offshoot of a 1994 class-action suit brought by Dr. Howard Engle ... who claimed the tobacco companies intentionally addicted smokers. In 2000, a Miami-Dade jury awarded the class, estimated to have some 750,000 members, more than $145 billion in damages. The Florida Supreme Court overturned the award, ruling smokers must prove in individual cases that cigarettes caused their illnesses.

During the trial, Florida lawmakers adopted a law that capped the amount of the appeal bond at $100 million.

The cap should apply to the nearly 9,000 ''Engle-progeny'' cases because they pose the same risk to the state's continued receipt of the tobacco settlement payments as the original Engle verdict, said David Sutton, a Philip Morris USA spokesman. ''It is more critical than ever to protect the hundreds of millions of dollars Florida receives from the tobacco settlement agreement each year,'' Sutton said.

A Florida jury has awarded $8 million to the widow of a smoker whose death was caused by his addiction to cigarettes, in a major potential legal setback for tobacco company Philip Morris.

The jury in Fort Lauderdale, Florida, decided in favour of Elaine Hess, widow of long-time smoker Stuart Hess, who died of lung cancer in 1997 at age 55. He had smoked for 40 years.

Philip Morris USA, a unit of Altria Group, said it would appeal the verdict, in the first of potentially thousands of cases to go to trial in Florida.

But Alex Alvarez, an attorney for Elaine Hess, said he and other lawyers who worked on the case felt vindicated after winning $5 million in punitive damages on Hess' behalf and $3 million in compensatory damages.

"She's a 110-pound elementary school teacher, and she went up against Philip Morris, one of the most powerful companies in the world, and won," Alvarez told Reuters.

"We have paved the road for these other litigants to come in and seek their day in court as well. We're happy to be able to do that for them."

He was referring to about 8,000 cases filed after the Florida Supreme Court's landmark decision in 2006 to throw out a $145 billion jury award in a class-action lawsuit filed in the early 1990s by Miami Beach paediatrician Howard Engle on behalf of thousands of sick smokers.
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In its 2006 ruling that threw out the $145 billion lower- court award in the Engle case - the first smokers lawsuit to be certified as a class action - the state Supreme Court left in place key findings that tobacco companies knowingly sold dangerous products and concealed the risks of smoking.

That promised to help the thousands of smokers who filed individual lawsuits against the tobacco companies because they would not have to prove those issues again.

In a statement saying it would seek appellate review of the case and of what it called the "constitutionally flawed" punitive damage verdict, Philip Morris vowed to fight on against all pending litigation in Florida.

"We will vigourously defend each of these cases ... " said Murray Garnick, an Altria senior vice president and associate general counsel, speaking on behalf of Philip Morris.

"This case was selected by plaintiffs' lawyers from among thousands of others to be the first tried presumably because they believed it was their best case," said Garnick.

Edward Sweda, a senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston, agreed the Hess case was no guarantee of the result of future trials.

But he added that it also did not bode well for Philip Morris or its parent.

"It certainly is a very bad sign for Altria that this first of the potentially up to thousands of cases has gone against them so dramatically and so emphatically," Sweda said.

"It is a very positive sign for the smokers and their families going into the future trials throughout Florida later this year."

Sweda said jury selection in another trial, similar to the Hess case, had already gotten under way in Fort Lauderdale.

Tobacco giant Philip Morris must pay $8 million to a Cooper City widow whose husband died of lung cancer, a Broward County jury decided today in a landmark case that could foretell the outcome of about 8,000 similar lawsuits pending in Florida.

Stuart Hess, a chain smoker of up to three packs a day, died in 1997 at age 55.

His widow, Elaine, and son, David, brought a wrongful-death claim against Philip Morris, maker of the Benson & Hedges that Stuart Hess puffed on for more than 40 years.

After about nine hours of deliberations, the six jurors decided that Elaine Hess should get $2 million and David Hess $1 million for their losses.

The jury also decided that Philip Morris should pay $5 million as punishment for deceiving the public about the addictive nature of nicotine and the health risks associated with smoking.

... "Mr. Hess had it within his control to stop smoking, and quit smoking in time to avoid getting lung cancer," said Kenneth Reilly, an attorney representing Richmond, Va.-based Philip Morris USA.

Hess' attorneys had asked for more than $130 million -- $25 million to $35 million to the widow and son as compensatory damages for their loss and triple that figure as punitive damages.

The same jury already found Hess had been hopelessly addicted to nicotine and that his addiction casued his death.

The jury determined that both Philip Morris and Stuart Hess bore responsibility for Hess' addiction and ultimate death, but the tobacco company carried only 42 percent of the fault. The remainder of the fault was Hess'.

This is the first of about 8,000 individual lawsuits to go to trial since the Florida Supreme Court in 2006 threw out a record $145 billion class-action jury award.

Cigarette makers, lawyers and other Florida smokers and survivors who have filed similar lawsuits have closely watched the Hess case, viewing it as a test that may signal how other cases will turn out and how much cigarette manufacturers could be ordered to pay in damages.

When the state's high court tossed the class-action award, it upheld conclusions that cigaretes causes cancer and the tobacco industry had concealed known risks.

The Hess family attorneys told jurors that Hess bought into decades of deceitful practices by Big Tobacco designed to promote sales of their deadly products.

"They knew if they hooked 'em young, they'd have a lifelong customer," one of the Hess'attorneys, Alex Alvarez, said in closing argument Tuesday.

Deceptive advertisements, attacks upon health studies about the dangers of smoking and formulated doubts about links to cancer were all early ploys of the tobacco companies, Hess' attorneys said, showing jurors early black-and-white ads glamorizing smoking, Philip Morris' internal memos and clips from the 1994 congressional hearings where tobacco company executives, one after another, denied that nicotine was addictive.

"They are co-conspirators with other major corporations regarding the health effects and dangerous nature of smoking," another of Hess' attorneys, Gary Paige, said. "There's no more of a sinister act than that."

Philip Morris was ordered by a jury Wednesday to pay $8 million in damages to the widow of a smoker who died of lung cancer in a case that could set a standard for some 8,000 similar Florida lawsuits.

The six jurors deliberated over two days before returning the award for Elaine Hess, 63, whose husband Stuart Hess died in 1997 at age 55 after decades as a chain smoker.

The award amounts to $3 million in compensatory damages and $5 million in punitive damages against Richmond, Va.-based Philip Morris USA, a unit of Altria Group Inc. Hess's attorneys sought up to $130 million.

"It wasn't about the money from the beginning," Hess said after the verdict. "It was about doing the right thing. I just really hope this can help all the thousands of families who have also suffered."

The Hess case was the first to go to trial since the Florida Supreme Court in 2006 voided a $145 billion class-action jury award in the so-called Engle case, by far the highest punitive damage award in U.S. history. The court said each smoker's case had to be decided individually merits, but let stand that jury's findings that tobacco companies knowingly sold dangerous products and hid risks from the public.

To be included in those findings, smokers or their families had to file individual lawsuits by Jan. 11, 2008.

Altria, the Philip Morris parent, issued a statement calling the Florida legal procedure "profoundly flawed" and predicted the damage awards would be reduced or thrown out on appeal.

"We plan to challenge the verdict in the trial court and, if necessary, on appeal," said Murray Garnick, an Altria Client Services vice president and associate general counsel. "We do not believe today's verdict is predictive of the outcome of future cases."

The next case begins Thursday before Broward County Circuit Judge Jeffrey Streitfeld, the local self-styled "tobacco judge" who has about 350 tobaccco trials on his docket. Others are pending throughout the state.

The Hess trial, which began Feb. 3, included video of the ... 1994 testimony before Congress in which top executives of the major tobacco companies, including Philip Morris, denied that smoking was addictive. The jury in the Hess case previously found that Stuart Hess was hopelessly addicted, even as Philip Morris attorneys pointed to evidence he was capable of quitting.

The jury did find that Hess was 58 percent responsible for the cigarette addiction that led to his death. If Philip Morris prevails on appeal, that could cut the compensatory damage award from $3 million to about $1.3 million.

The jurors declined comment after the verdict.

The Hess case has been closely watched by the tobacco industry and by the thousands of other Florida smokers and survivors who have sued. Although it does not directly control the outcome of the other lawsuits, the Hess case could signal how many of them will turn out.

The original Florida lawsuit was filed in 1994 by a Miami Beach pediatrician, Dr. Howard Engle, who had smoked for decades and couldn't quit. The class of smokers was estimated at up to 700,000 when the giant $145 billion award was issued in 2000.

For decades, tobacco companies almost never lost lawsuits filed by smokers but have had several major judgments against them more recently. Philip Morris, for example, is currently appealing to the U.S. Supreme Court a $79.5 million jury award in an Oregon case; other large damage awards against the industry have often been reversed or reduced on appeal.

FORT LAUDERDALE, Fla. (AP) -- The jury that decided a 40-year chain-smoker was helplessly addicted to nicotine must now decide whether tobacco giant Philip Morris owes his family potentially millions of dollars for his death from lung cancer.

The next phase of the closely-watched lawsuit filed by the man's widow, Elaine Hess, starts Friday in Broward County Circuit Court. Hess' lawyers plan to argue that Stuart Hess became hooked on cigarettes because of deceptive practices by Philip Morris that hid the dangers of smoking.

"The jury's going to hear a lot more about what the tobacco industry has been doing for the last several decades," said Adam Trop, one of Hess' attorneys.

The lawsuit is the first of about 8,000 such cases to go to trial since the Florida Supreme Court in 2006 threw out a $145 billion jury award in a class-action lawsuit on behalf of thousands of smokers and their families.

The state's high court upheld the conclusion that tobacco companies knowingly sold dangerous products and concealed smoking's health risks, but ruled each case must be proven individually. The jury's decision Thursday that Hess did not continue smoking by his own choice was crucial.

"It is highly likely that the tobacco companies will be forced to account for their decades-long, reprehensible history of corporate wrongdoing," said Edward L. Sweda Jr., attorney for the Tobacco Products Liability Project at Northeastern University law school.

Hess' attorneys have not revealed how much they will seek, but it would likely be in the millions of dollars. Elaine Hess broke down in tears when the verdict was announced after almost three hours of deliberations, but declined to comment.

In a news release, Philip Morris warned it was not giving up.

"The Hess trial is not over"... .

In closing arguments, Hess attorneys Gary Paige and Alex Alvarez said Stuart Hess tried for 40 years to quit his heavy smoking, even trying hypnosis. But they said the powerful nicotine forced Hess to continue smoking even as he underwent chemotherapy before he died in 1997 at age 55.

"People smoke because they're addicted, not because they choose to," Paige said. "Nobody wants to be addicted to cigarettes. It's as addictive as cocaine and heroin."

Philip Morris attorney Kenneth Reilly said Hess' medical records show that he quit from time to time but decided each time to resume smoking despite doctors' advice to stop. Reilly said thousands of smokers successfully quit each year.

The trial is being closely watched by the tobacco industry and by thousands of other Florida smokers and survivors who have filed similar lawsuits. Although it does not have a direct legal effect on those other lawsuits, the Hess case could signal how they may turn out.

Much of Hess' evidence concerned the tobacco industry's well-documented efforts to hide and downplay the dangers of smoking, but Reilly said Hess was well aware by the mid-1960s of government warnings about health risks.

The $145 billion damage award by a Miami jury - in 2000 the largest such punitive award in U.S. history - was thrown out as excessive by the state Supreme Court. It involved a class of smokers estimated at about 700,000 as part of a 1994 lawsuit filed by Miami Beach Dr. Howard Engle, a pediatrician who had smoked for decades and couldn't quit.

At the time, the Engle case was the first class-action lawsuit against tobacco companies to make it to trial in the U.S.

A jury decided Thursday that a longtime chain-smoker's death from lung cancer was caused by nicotine addiction ....

The lawsuit by Elaine Hess, widow of Stuart Hess, is the first of about 8,000 such cases to go to trial since the Florida Supreme Court in 2006 threw out a $145 billion jury award in a class-action lawsuit on behalf of thousands of smokers and their families.

The state's high court upheld the conclusion that tobacco companies knowingly sold dangerous products and concealed smoking's health risks, but ruled each case must be proven individually. Now that the jury has found that Hess was addicted, the case will proceed to the liability and damages phases.

Hess's attorneys have not revealed how much they will seek, but it would likely be in the millions of dollars. Elaine Hess broke down in tears when the verdict was announced after almost three hours of deliberations.

"We're very pleased with the jury's verdict," said Hess attorney Adam Trop. "Starting (Friday), the jury's going to hear a lot more about what the tobacco industry has been doing for the last several decades."

Philip Morris attorneys declined comment.

In closing arguments, Hess attorneys Gary Paige and Alex Alvarez said Stuart Hess smoked heavily for 40 years and tried numerous times to quit, even trying hypnosis at one point. But they said the nicotine was too powerful, forcing Hess to continue smoking even as he was undergoing chemotherapy before he died in 1997 at age 55.

"People smoke because they're addicted, not because they choose to," Paige said. "Nobody wants to be addicted to cigarettes. It's as addictive as cocaine and heroin."

Kenneth Reilly, attorney for Richmond, Va.-based Philip Morris — a unit of Altria Group — said Hess' own medical records show that he was able to quit from time to time but made the decision each time to resume smoking despite doctor's advice to stop. Reilly said thousands of smokers successfully quit each year.

"From an objective standard, have they proved Mr. Hess was addicted? The answer is no," Reilly said.

The trial, which began Feb. 3, is being closely watched by the tobacco industry and by the thousands of other Florida smokers and survivors who have filed similar lawsuits. Although it does not have a direct legal effect on those other lawsuits, the Hess case could signal how they will turn out.

Much of Hess' evidence concerned the tobacco industry's well-documented efforts to hide and downplay the dangers of smoking, but Reilly said Hess was well aware by the mid-1960s of government warnings about health risks.
[Web Editor's note: The tobacco industry was certainly well aware that their products kill. So why were they continuing to manufacture and market them?]

The $145 billion damage award by a Miami jury — in 2000 the largest such punitive award in U.S. history — was thrown out as excessive by the state Supreme Court. It involved a class of smokers estimated at about 700,000 as part of a 1994 lawsuit filed by Miami Beach Dr. Howard Engle, a pediatrician who had smoked for decades and couldn't quit.

At the time, the Engle case was the first class-action lawsuit against tobacco companies to make it to trial in the U.S.

Miami-Dade Circuit Judge David C. Miller awarded $218 million in legal fees Tuesday to Stanley and Susan Rosenblatt for years of work they put into now-defunct class action litigation against the nation’s biggest cigarette markers.

“I find it very reasonable,” Miller said from the bench, referring to fee calculations estimating they worked for 77 hours a week on average at an hourly rate of $274. “These are reasonable and conservative hours.”

“In fact, in some firms that would not have been acceptable billing,” he joked before a courtroom packed with at least 200 people.

Tobacco attorney Robert Heim, a partner with Dechert in Philadelphia, told Miller “it would be wrong under common fund law” to award fees to the Rosenblatts, saying a guardian ad litem should be appointed to administer a fund “to protect the interests of the class.”

The fees would come out of a common “guaranteed fund” of about $800 million that Big Tobacco put up as collateral in 2001 to appeal the record $145 billion punitive verdict the Rosenblatt’s won against cigarette makers. The verdict was later thrown out by the Florida Supreme Court along with a class certification order uniting sick smokers in a single lawsuit.

Miller still must determine how to distribute the rest of the $800 million fund.

Rosenblatt railed against Big Tobacco as he argued Tuesday before Miller for fees in the case dating back to 1994. The two-year trial marked the first time tobacco executives acknowledged in court that smoking causes illness and is addictive.

“For close to half a century, there were all these high-priced lawyers saying, ‘Ah, it’s all about willpower. It’s not addictive,” he said. Describing the industry’s legal tactics, Rosenblatt said, “There’s a word in Yiddish. It’s chutzpah.”

Given the industry track record in the case, an appeal is assured.

Plaintiffs and attorneys from around the state whom Rosenblatt had never met took the podium to recommend that Miller grant him fees.

“It was just incredibly gratifying,” he said. “We were impressed.”

The plaintiffs largely belong to the roughly 8,000 lawsuits dubbed “the Engle progeny,” the offspring of the famous class action filed on behalf of Miami Beach pediatrician Howard Engle. The case became known as Engle v. Liggett as it moved through the courts.

A line to speak in support of the Rosenblatts’ fee request ran out of the room. Many people at the hearing were visibly ill or relatives of deceased smokers.

Gene Anthony Hitchens, for example, came to the hearing with an oxygen tank and tubes running to his nose. He carried the tank with him when he spoke before the judge.

Tobacco lawyers argued the Rosenblatts had no right to the money because the punitive award was overturned and because the fund might be used for punitive awards in the Engle spinoffs.

“Much of the case, including the entire $145 billion class-wide punitive damages award, has been resolved in defendants’ favor and the ultimate benefit of the litigation to class members is yet to be determined,” Heim wrote for the industry in opposition to attorney fees.

The fee petition put the people in the room in a bit of an awkward position. The Rosenblatts stumped for their own role in starting litigation that other attorneys are pursuing now, and the Engle progeny attorneys supported them.

“I don’t see the problem. He worked hard,” said Carl Grant of Fort Lauderdale. His father George smoked for most of his life and died in 1983 from emphysema and heart disease. “It ain’t no free ride. They earned it.”

New Engle lawyers, including the ostentatious Willie Gary, agreed.

“When I think of the jobs they’ve done for the people, it gives new meaning to the words ‘hard work,’” he told Miller.

The work they did was to lay the groundwork for much of the litigation against the tobacco industry in Florida. And while the verdict was tossed and the class disbanded, the findings of the jury in the case the Rosenblatt’s litigated can be used for future cases.

Despite decertifying the class, The Florida Supreme Court upheld the findings of the Miami jury in the original Engle case that will guide individual smoker cases going forward. Juries in individual Engle progeny cases will be advised to accept as proven that nicotine is addictive and smoking causes cancer and more than a dozen other illnesses.

Future juries considering damages also will be told tobacco companies were negligent, placed defective and unreasonably dangerous products on the market and defrauded consumers by misleading them.

But cigarette makers are not going to accept the findings as mere givens when the individual cases go to trial. Defense attorneys around the state look at the jury findings as being open for interpretation.

Attorneys representing smokers insist tobacco attorneys have employed creative stalling tactics to allow sick smokers to die before their cases can be heard, a charge tobacco attorneys dismiss.

Miller said he wants to expedite the proceedings.

“Justice delayed is justice denied,” he said.

The justices, without comment, today left intact the Florida Supreme Court's conclusion that the 1999 jury verdict would apply to future lawsuits. The jury found that cigarette makers withheld information about smoking risks and put unreasonably dangerous products on the market.

Philip Morris and Reynolds American Inc.'s R.J. Reynolds Tobacco unit face dozens of Florida lawsuits that seek to use the verdict as a starting point. Smokers and their family members have until January to file additional suits.

"We're expecting in the tens of thousands to be filed by the deadline," said Ed Sweda, a senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston .

The cigarette makers contended in an appeal filed in Washington that the lower court ruling "promises to serve as a catalyst" for those lawsuits. "Plaintiffs' lawyers have begun blanketing Florida with solicitations, telling prospective litigants that the scales are now tipped decidedly in their favor," the appeal argued.

The appeal stems from a case that at one point threatened the tobacco industry with a $145 billion punitive damage award. The Florida Supreme Court ruled that a state appeals court was correct to overturn the award and that the case couldn't go forward as a class action on behalf of 700,000 people.

At the same time, the state court said many of the jury findings would apply to individual cases. At the Supreme Court, the cigarette makers said those findings were so "generalized" that their use in future cases would violate the U.S. Constitution's due process clause.

The tobacco companies didn't contest the application of two of the jury's findings, that cigarettes are addictive and cause 23 diseases.

The appeal also contended that the Florida court cleared the way for smoker claims that are barred under a federal cigarette- labeling law.

Philip Morris and R.J. Reynolds filed the appeal along with Brown & Williamson Holdings Inc., Loews Corp.'s Lorillard Tobacco Co. and Vector Group Ltd.'s Liggett Group LLC. R.J. Reynolds acquired Brown & Williamson's U.S. operations in 2004.

The case arose out of a class-action lawsuit on behalf of 700,000 Florida residents suffering from illnesses they say were caused by their addiction to cigarettes.

In July 2006, the Florida Supreme Court dismissed a $145 billion punitive-damages award against the tobacco companies for injuring smokers, saying that recognizing the huge class of victims was inappropriate. But it upheld multimillion-dollar compensatory awards on behalf of two smokers.

The jury in the case found, among other things, that tobacco companies withheld information about the risks of smoking. And in the part of its ruling most troubling to the industry, the Florida Supreme Court said the findings against the companies could be used in individual suits by former members of the class.

The U.S. Supreme Court's decision makes it more likely that former class-action members in Florida will file individual lawsuits by a January deadline, said Ed Sweda, a senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston.

"There is much greater clarity for the individual plaintiffs and their lawyers in Florida now that they have a clear green light to go forward with these cases," Sweda said.

Philip Morris USA ... said it would vigorously defend against any individual lawsuit.

Dr. Howard Engle, longtime Miami Beach pediatrician, has always been angry about something.

In the 1950s and '60s, angry about segregation, he defied convention and ran an integrated medical practice.

In the '70s, mad about drugs in the schools, he stormed before the Dade County School Board with a shocking tale of students offering to sell him dope.

In the '80s, outraged about teenage promiscuity, he blasted off in the newspaper about irresponsible parents and inadequate sex education.

In 1994, furious about his own nicotine habit and the cigarette companies' strategies to hook kids, he became the lead plaintiff in a landmark class-action lawsuit against the tobacco industry.

Sixteen years later, waiting for ultimate resolution in the case, he's still livid with the industry, and himself.

''Goddammit! I'm an addict!'' snaps Engle, 86, firing up a Marlboro Medium. ``It's not very pleasant to admit.''

In November 2004, Florida's high court heard an appeal in the case. Miami lawyers Stanley and Susan Rosenblatt asked justices to reverse an appellate court ruling that overturned a Miami jury's 1999 verdict and punitive damage judgment.

A favorable ruling in Engle et al. vs. R.J. Reynolds Tobacco Co. et al. would put at least 300,000 sick Florida smokers back on track for a record-breaking $145 billion verdict against the industry that they claim ruined their health.

The jury, which heard 157 witnesses over two years, concluded that the industry had intentionally misled smokers about the dangers of smoking.

The case went twice to the Third District Court of Appeals in Miami, which initially upheld, then overturned, the smokers' class certification, nullifying the award.

''I would assume they'd rule in a reasonable time,'' Engle mused recently at the Venetian Islands home he and his artist wife, Brooke, built 54 years ago, 'but I don't know what `reasonable' is in a case like this.''

What he does know is that even if the court reinstates the award, he probably won't live to benefit from it.

''I hope my [three] children will get something,'' said Engle, who suffers from respiratory diseases, which he blames on more than six decades of smoking, and lymphoma.

Engle, wrapped in a cotton kimono, makes no apologies for his smoking. He says he last tried to quit two years ago and managed for two months.

''Rough as hell,'' he said.

Then he was diagnosed with a malignant tumor.

``I said the hell with it. I enjoyed smoking; I'm going to smoke. I'm going to get cancer of the lung? I already have a couple of cancers.''

Engle, who retired in 2001 after having treated some Miami Beach families for three generations, got involved with the lawsuit because eight of the Rosenblatts' nine children were his patients.

''We'd see him in his office, and in a very embarrassed way, he'd go into his room and smoke,'' recalls Stanley Rosenblatt, a malpractice/personal-injury lawyer. 'I'd say to him, `What is your problem? You're in the health business!' ''

When Engle asked to join the case, Susan, who handles appeals, thought him the ideal class representative: ``a brilliant man who spent his entire life helping people and healing people and in the process, doing a number on himself.''

To some, he seemed a hero; to others, a fool.

''I put myself in the middle of the target and took a lot of bumps because of it,'' Engle said. ''I got a lot of negative reaction, from patients, friends, fellow physicians,'' in part because the Rosenblatts have sued doctors.

But last month, the American Academy of Pediatrics honored Engle with a special achievement award for his fight against tobacco as a childrens' health issue.

Dr. Julius Richmond, U.S. surgeon general during the Jimmy Carter administration and a smoking opponent, calls the academy's honor ``a long overdue recognition.''

He and Engle have known each other since the 1940s, when both were pediatrics residents in Chicago.

Through Engle, Richmond became a star plaintiffs' witness.

Now, like many of the plaintiffs, he ''waits each week with bated breath'' for the Supreme Court's ruling.

''It's a very important case in so many ways,'' said Richmond, 89, of West Palm Beach.

Tobacco lawyers repeatedly questioned him about addiction: Why, if so many people can quit smoking, is it not simply a matter of will?

``I'd say, `You don't understand that [some] people in the depth of addiction can't quit. . . . In the pattern of chemical addiction, there's a good deal of variability.''

And Howard Engle is one of the unlucky ones.

'His situation was very precarious. . . . He told me how motivated he had been because he was so incensed about [the companies'] behavior.''

He began smoking at the University of Wisconsin Medical School, to mask cadaver smells, and never paid for cigarettes because representatives of ``R.J. Reynolds and Chesterfield stood on street corners passing out these little five-cigarette packs. They'd come to the anatomy lab and give us cigarettes.''

By the time he'd finished a two-year stint in the army and started practice, Engle realized he was addicted, ''even after getting a master's degree in pathology and doing autopsies and seeing carcinoma of the lung,'' which had killed his father at 53.

In those days, South Florida hospitals and many doctors' offices were segregated. Not Engle's.

The hospital's CEO, Steven Sonenreich, 52, has known him for 30 years and ``always knew that his bark was much larger than his bite. And after he got finished barking, we'd have a good chuckle.''

What Engle never cared about was money, according to Sonenreich, even though the tobacco attorneys repeatedly accused him of joining the suit just to cash in.

Now, Engle wishes he'd cared a bit more. The doctor who ''never turned anybody away because they couldn't afford it,'' whose name is linked to the largest civil damage verdict in American history, is living on Social Security.

''I had built up a very nice pension fund, but I didn't think I'd live this long, and I've spent it all,'' Engle said. ``Now we're selling antiques.''

Almost exactly one year after decertification, Florida Supreme Court gives smokers' class a second chance.
Arguments to take place while industry is defending $300 billion federal RICO trial in DC.

A national class action on behalf of sick smokers and the estates of those who died as a result of smoking-caused disease was filed on May 5, 1994 by attorneys Stanley and Susan Rosenblatt. On October 31, 1994, the trial court in certified the nationwide class. The tobacco company defendants appealed the class certification and on January 31, 1996, the Third District Court of Appeals in Florida affirmed the class certification but narrowed the class to citizens and residents of Florida (see 672 So. 2d 39). The tobacco company defendants again appealed, this time to the Florida Supreme Court and on October 2, 1996, the state's high court rejected the appeal.

The same jury of six returned for the next part of the trial. The second phase of the trial began on November 1, 1999 and was divided into two parts. In the first, three individual class members' claims for damages were tried as if they were separate individual cases. During this portion of the trial, the tobacco companies filed a desperation motion to the Florida Supreme Court called an an Extraordinary Writ Under the All Writs Power motion to urge the state's high court to void the trial plan or decertify the class. The Florida Supreme Court rejected this motion and let the trial plan and class certification stand on December 27, 1999.

Meanwhile, the plaintiffs were presenting the jury with evidence proving that the defendant tobacco companies were liable for injuries to the three representative class members. This phase of the trial resulted in a verdict establishing tobacco company liability for the injuries to the three representative class members on April 7, 2000. $6.9 million in compensatory damages were awarded to lung cancer victim Mary Farnan, a 44-year-old nurse, and to the husband of Angie Della Vecchia, a longtime smoker who died of lung cancer last summer at the age of 53. Despite questions about the statute of limitations, the jury awarded plaintiff Frank Amodeo, a throat cancer victim and 60-year-old clockmaker $5.7 million. This verdict opened the door to the second part of the second phase

On July 14, 2000, a jury in the Engle class action trial issued a jaw-dropping punitive damages verdict against the tobacco industry totaling approximately $145 billion. The verdict broke down among tobacco companies as follows: Philip Morris Inc. - $73.9 billion; R.J. Reynolds Tobacco Co. - $36.2 billion; Brown & Williamson Tobacco Corp. - $17.5 billion; Lorillard Tobacco Co. - $16.2 billion; and Liggett Group Inc. - $790 million.

The trial judge, Robert Kaye, denied the defendants' post-trial motions and issued a final judgment on November 6, 2000.

On May 21, 2003, a panel of the Third District Court of Appeals unanimously decertified the class and reversed the punitive and compensatory damage awards. The Court also ruled that punitive damages were unavailable to all plaintiffs suing the tobacco defendants under the and Master Settlement Agreements. Plaintiffs asked the full Third District to review the panel's decision, but that request was rejected. That left the smokers with one last hope of reviving the case: by appealing to the Florida Supreme Court.

On May 12, 2004, the Florida Supreme Court agreed to review the decision of the Third District Court of Appeals. On October 6, 2004, the Florida Supreme Court will hear 20 minutes of arguments from each side. The smokers' briefs are due to the Court by June 7, 2004 and the tobacco companies' briefs are due 20 days after they receive the petitioner's brief.

The Third District Court of Appeals' decision showed a surprising lack of regard to prior decisions of the Third District as well as some very dubious conclusions that will likely invite review by the Florida Supreme Court or an en banc review by the other appeals judges in the District..

The first and most obvious question raised by the decision is: why review and modify the class certification in 1996 and then wait for the longest civil trial in history to take place and then nearly another three years after that to come to the realization that individual issues among class members pose a problem?

For a class action to be approved, common issues among class members must predominate over individual issues. The Court points to issues involving the fact that some residents are transient and, therefore, questions about whether or another state's laws could apply to particular class members' claims could arise. The Court notes that there were differences in how the jury regarded the proportion of fault attributed to the three representative class members themselves and that each of the representative class members' illness and experience was different. Of course! These are not new issues that became apparent since the class was certified. The Court was well aware that the state hosts more part-time residents than other states. The Court knew that everyone's experience with smoking-caused disease was not identical in 1996. The Court could certainly anticipate that a jury might regard the proportion of fault attributed to the different class members differently. In fact, that is precisely why this trial plan called for a third phase to settle individual issues for each class member. Surely that approach is more efficient than holding separate full trials for each and every class member. It took a year in the first phase of the trial for both sides to present the underlying issues that apply to every class member. Why go through that same exercise thousands of times? But this is precisely what the Court suggests is the better approach. The truth is that there simply aren't enough attorneys and court rooms available to try each individual case fully and that such an approach would deny the vast majority of the members of the class an opportunity to be heard.

The strangest rationale for decertifying the class nearly three years after the trial is cited on page 14 of the decision where the Court says, "it would further be unjust to bind absent class members to a negative decision where the class representative's [sic] claims present different individual issues than those of the absent members." The strange thing about this is that it simply did not happen and the jury found that the individual class representatives' claims were sufficiently proven to establish defendant liability. Perhaps one might consider it considerably more unjust to absent class members as well as class representatives to spend two years trying the case and then ruling that the entire process was a waste of the time, money, and emotional investment staked in the trial.

The other glaring inconsistency involves the Court's ruling on the lump sum punitive damages which it describes as "the cart before the horse." The point of a lump sum punitive damages finding was that this jury had heard more about the tobacco company defendants than any other jury had ever heard and would, therefore, have the requisite knowledge of the underlying facts to determine the appropriate sanction. A judge or jury hearing the individual claims of class members in the third phase of the trial would not have the time to hear the full sordid tale of tobacco industry deceit multiplied by the tens of thousands of class members.

Two of the three judges on this panel were on the three judge panel that ruled that lump sum punitive damages were unlawful in September of 1999 only to reverse themselves the following month. Now, once again, the Third District Court of Appeals has flip-flopped on this issue. One can only speculate as to why the Third District Court of Appeals would give the green light to the trial plan in 1999 (and the Florida Supreme Court would decline to intervene when asked) only to reverse itself a second time more than three years later. The only thing that has changed since 1999 is that the jury has since issued its verdict on punitive damages and this court clearly dislikes the number of zeros in that verdict.

In the punitive damages phase of the trial, the tobacco companies declined to put on any expert witnesses to explain to the jury what they could afford to pay out in punitive damages. Instead, they submitted their audited financial statements that asserted that their combined net was just over $8 billion. The plaintiffs, on the other hand, presented industry experts who suggested that the defendants' ability to pay was much greater than their declared net worth. For example, under the terms of the Master Settlement Agreement (MSA), the industry will pay about about $6 billion this year to 46 states. Four other states, including Florida, will receive higher per capita payments under their own settlements with the tobacco defendants that predate the MSA. Advertising and promotion expenses industry-wide for this year are expected to be in the $6-8 billion range. Tobacco companies pay dividends to their shareholders that amount to billions of dollars per year. These are telltale signs that the companies' ability to pay far exceeds their declared net worth. The jury saw through the smokescreen of the financial statements and found the plaintiffs' experts to be more credible. The Court strongly disagreed.

But instead of reducing the punitive damages awarded by the jury as is often the practice when such awards are reviewed on appeal, the Court instead came to the remarkable conclusion that the State of Florida's 1997 settlement with the tobacco industry barred punitive damages awards against tobacco companies in any future Florida proceeding. The Court wrote at page 64 that, "as a matter of law, Florida's Settlement and Release . . . preclude the plaintiffs' punitive-damages claims here." This conclusion is sharply at odds with the language of the settlement agreements themselves and raise the question: why did the Third District Court of Appeals permit a trial plan calling for punitive damages to go forward in 1999 if all punitive damages claims against the tobacco industry were settled in 1997 or 1998? If that is what the court supervising the trial court believed, then why send tens of thousands of class members on a wild goose chase?

The Court cites to a few land use, zoning, and nuisance cases that were resolved by state action. Rulings in these cases restrict private civil litigation of the same issues. One would be hard-pressed to find a less analogous set of cases. The claims of the sick class members or their survivors involve lung cancer, emphysema, bladder cancer, kidney cancer, heat disease, stomach cancer, and the other included conditions are not nuisance or zoning claims and most certainly were not settled or released by the State of Florida.

The State of Florida sued the tobacco companies to recover Medicaid program costs of treating indigent smokers whose medical treatment was necessitated as a result of smoking cigarettes under provisions of statutes including the Third Party Liability Act and the Florida Racketeering and Corrupt Organizations Act. The State of sought punitive damages from the tobacco defendants. On August 25, 1997, the State entered into a Settlement Agreement with the tobacco industry defendants and, as part of the agreement, released all of the claims of the State and its counties, municipalities, public hospitals, universities, and other public entities. The rights on individuals or classes of individuals were not affected in any way.

The Court maintains that the trial court committed a reversible error by instructing the jury not to consider the Florida Settlement Agreement or the Master Settlement Agreement (MSA) with 46 states in regard to the issue of punishment and deterrence. However, the Florida Settlement Agreement is very clear on this point. It states in section VI(c): "neither this Settlement Agreement nor any evidence of negotiations hereunder, shall be offered or received in evidence in this Action, or any other action or proceeding, for any purpose other than in an action or proceeding arising under this Settlement Agreement." Likewise, the MSA contains a nearly identical provision at section XVIII(f): "Neither this Agreement nor any public discussions, public statements or public comments with respect to this Agreement by any Settling State or Participating Manufacturer or its agents shall be offered or received in evidence in any action or proceeding for any purpose other than in an action or proceeding arising under or relating to this Agreement."

Mark Gottlieb, Senior Staff Attorney for the Tobacco Products Liability Project (TPLP) at Northeastern University School of Law, notes:

EXCERPTS from The Sun Sentinel, May 13, 2004, headlined, Court to review $145 billion verdict against 5 largest tobacco companies, writer, Ann W. O'Neill