Carolina and Virginia have now passed
to help protect tobacco companies from the death and destruction they
caused to smokers in Florida.
EXCERPTS from The Raleigh News & Observer, April 5, 2000, writer Bob Williams; headlined: Coming to tobacco's rescue - Legislators convene today to craft a $25 million cap on punitive damage bonds required to appeal a lawsuit.
"Everybody in this room knows why we are here," [Rep. Leo] Daughtry, a GOP candidate for governor who is from Smithfield, told more than 100 state legislators gathered for the informal session. "We are here to help the tobacco companies, and we want to help the tobacco companies."
Gov. Jim Hunt called the special session last week at the request of cigarette makers, who want a new state law to help shield the industry from a potentially devastating court decision in a class-action lawsuit now pending in Florida.
Specifically, the legislation would place a $25 million cap on punitive damage bonds required to appeal a lawsuit. The cap would cover all lawsuits, whether they originate in North Carolina or elsewhere.
General Assembly leaders ... hope to complete work on the tobacco industry proposal in one day and then adjourn until their regular session begins May 8.
The only witness who didn't draw any applause from the legislators was a representative of the N.C. Academy of Trial Lawyers, who cautioned lawmakers that the proposed law was probably unconstitutional.
Some constitutional law experts have said the legislation is probably a violation of the Full Faith and Credit Clause of the U.S. Constitution. In simple terms, that clause requires states to respect the judicial decisions of other states and federal courts.
"Please take our constitution seriously," said Charles Cromer, the academy's legislative liaison told the legislators. "If you are going to pass this legislation, you need to be certain in your heart the constitutional standard has been met."
Although most legislators appeared to favor the non-binding resolution, many voiced concerns about another amendment Daughtry plans to offer today that would sunset the appeals cap in June 2001.
Daughtry said the sunset clause would allow the legislature to revisit then appeals cap after cigarette makers reveal how much American tobacco they plan to buy next year.
"I don't believe we should be in the business of passing legislation in exchange for some sort of conduct by the companies," said state Sen. Frank Ballance, a Democrat from Warrenton. "I'm raising a question of right and wrong on that."
"My view is that you are treading on very dangerous water with this," [state Attorney General's office lawyer Jim] Gulik said. "I think you could run into some serious potential constitutional problems."
"If they are going to ask something of us, then I don't see anything wrong with asking them to help these farm families that are hurting," said Rep. Billy Creech, a Republican from Clayton.
"With the rush to get something out of here, we could end up with some unintended consequences," said state Sen. Fountain Odom, a Democrat from Charlotte. "I don't think I can support this as it now stands."
''It is needed. It is needed for the protection,'' said Senate President Pro Tem Marc Basnight, D-Dare.
Basnight added that if the tobacco companies go bankrupt because of Florida's requirements for posting a bond during an appeal, North Carolina could lose millions of dollars that it is due to receive under a settlement with the industry.
But trial lawyers here and elsewhere say that Florida's requirements for posting a bond during an appeal aren't nearly as stringent as the tobacco industry paints them.
''The bill is unnecessary. They don't need legislative rescue,'' said Richard M. Taylor Jr., the executive director of the N.C. Academy of Trial Lawyers. ''If they do get an excessive judgment, the trial court has a duty to reduce it.''
But Taylor said that
Carolina legislators don't need to
intervene. Florida law gives trial judges discretion to reduce the
amount of an award and gives companies a chance to ask for a bond less than the full amount of a judgment, he said.
''The trial court is
by law to reduce a judgment when it is
excessive,'' he said. ''The courts in Florida in a punitive-damages
question are going to first determine the net worth of the company, and then they're going to set the judgment at something less than that.''
If tobacco companies
want to post the entire amount of a
multibillion-dollar judgment, ''They can make their case about that,'' he said.
''If a court would set a bond that is so large that they couldn't produce it or it would put them out of business, . . . that would be a denial of due process of law. And that question could be litigated in the Florida courts.''
There are so many variables in the case whether a damage award would come before the legislature convenes, whether a judge would reduce the award or the appeal bond, whether North Carolina law or Florida law would ultimately prevail that some legislators are nervous.
Taylor, meanwhile, points out that the judge in Florida has issued a gag order in the case, and he questions where the estimates of damage awards of $100 billion or more originate.
reports say that a tobacco-industry lawyer mentioned the
possibility of a $300 billion verdict in open court and that a plaintiffs' attorney said he would seek $100 billion in the case.
''These big numbers are not coming from the plaintiffs or the court. They're coming from the tobacco industry,'' Taylor said.
''The truth about this is the tobacco companies are blowing a lot of smoke. They have lied to the public for years, over and over again. And they're doing it again.''
In North Carolina, the bankruptcy concerns primarily involve two companies with long histories in the state but now in shaky financial condition, Liggett Group of Durham and R.J. Reynolds Tobacco Co. in Winston-Salem.
legal woes don't stop with the Florida case.
The industry has lost several of those cases in recent months, including one in San Francisco this week where a sick smoker was awarded $1.72 million in damages from cigarette makers.
Even tobacco farmers and quota owners have gotten into the act, filing a $69 billion class-action suit earlier this year accusing cigarette makers of conspiring with the U.S. Department of Agriculture to drive down the amount of leaf they are allowed to produce each year.
are warning the appeals bond cap under discussion is unnecessary and is
very likely unconstitutional.
"A basic foundation of our democracy is respect for the court decisions of another state," said Dick Taylor, chief executive of the North Carolina Academy of Trial Lawyers in Raleigh. "Otherwise, you could have Michigan protecting the auto industry from lawsuits or Texas trying to shield the oil industry from its legal liabilities."
companies are simply trying to play on fears about bankruptcy to gain
protections they might not otherwise be able to secure. He was
critical of tobacco-industry attempts to get the General Assembly to
the cap during a special session to approve
Hurricane Floyd last December.
"That just shows the length this industry will go to get what it wants," Taylor said. "It was unbelievable they would try to hitch a ride on something as important as helping the victims of Hurricane Floyd. It is even more unbelievable they now feel entitled to their own special session."
Hunt said Tuesday he was being pressured by a wide range of tobacco interests -- everyone from cigarette makers to farmers -- to call the special session.
A March 18, 2000
Winston-Salem Journal, writer David Rice, noted that such
would be unconstitutional, but would buy time for the tobacco industry,
as they try to stall justice. Here are excerpts from the article,
"Tobacco assets shield disputed, Anti-tobacco activists say move to protect companies from damage award is illegal."
EXCERPTS, The Winston-Salem Journal, March 18, 2000
Moves to shield the assets of tobacco companies in North Carolina and other states from a large punitive-damage award in Florida are unconstitutional because they interfere with another state's court judgments, anti-tobacco activists said yesterday.Two other articles on this are of special interest. One is March 17, 2000, The Winston-Salem Journal, also by writer David Rice: "Big Tobacco sees missed opportunity - Legislators could have used special session to protect industry from Florida appeals bond."
State Sen. Linda Garrou, D-Forsyth, meanwhile, echoed the tobacco industry's plea for Gov. Jim Hunt to call a special session of the General Assembly to adopt the same protections that legislators in Virginia and Georgia have adopted and legislators in Kentucky are considering.
Opponents of the tobacco industry, meanwhile, question the constitutionality of proposals to set a limit on the size of the bond that a company facing a large damage award must post as it appeals.
Florida law would require tobacco companies to post an appeal bond equal to the amount of punitive damages.
Edward L. Sweda, a senior attorney with the Tobacco Control Resource Center at the Northeastern University School of Law in Boston, said yesterday that such protective measures violate the Full Faith and Credit Clause of the U.S. Constitution, which says that one state must honor another state's court judgments.
''It's interfering with the process that state has in place to protect people who win a judgment,'' Sweda said. ''If you don't have full faith and credit protecting other (court) systems, the whole federal system comes unglued.''
For example, ''It would be outrageous for Virginia residents who might theoretically be hurt by a Michigan automobile to have that state shield that industry,'' he said.
Even if such laws are unconstitutional, Sweda said, they buy time for the tobacco industry because they could take years to strike down in court.
''I'm sure they realize it's unconstitutional, but it's in the industry's interest,'' he said.
In a statement issued last month as Virginia legislators considered a similar proposal, Richard Daynard, the head of the Tobacco Products Liability Project at Northeastern, said that the shield also violates the Constitution's Interstate Commerce Clause. ''It is clearly intended to protect a local company from one of the consequences of doing business interstate. As such, it is also a flagrant violation of the Commerce Clause,'' he said.
Tad Boggs, a spokesman for Hunt, said that no call for a special session is imminent.
''The governor's obviously aware of what the senator's asked,'' Boggs said. ''He's also been talked to by people from the industry. It's going to be a process now. . . . It is definitely not anything that's pending this week, though.''
EXCERPTS, The Winston-Salem Journal March 17, 2000
Mel Watt's good fortune yesterday in winning a stay of a
decision to strike down his congressional district could be the
tobacco industry's misfortune.
With a judgment in Florida of $100 billion or more pending
against the industry, tobacco companies had hoped to use a
special redistricting session of North Carolina's legislature to
win protections similar to those approved by legislatures in
Virginia and Georgia in recent weeks so that the companies
can appeal the verdict.
Tobacco lobbyists tried to no avail to have legislators consider
protective measures during the General Assembly's special
session in December on Hurricane Floyd relief. The move met
with firm opposition from the N.C. Academy of Trial Lawyers,
an influential group in Democratic political circles.
Tad Boggs, a spokesman for Hunt, said yesterday that it is too
early to say whether the governor will call for a special
session on the issue.
article follows, with EXCERPTS from The
Depot, March 14, 2000, writers Kerry Hall and Ben Feller.
Lorillard asks for law to protect assets
GREENSBORO -- Lorillard Tobacco Co. is asking
state lawmakers to protect it and other companies
from going into bankruptcy while they appeal
potentially crippling damage awards.
As such, company leaders have been meeting
privately with county commissioners and the county's
representatives in Raleigh to rally support for a
special legislative session
[before the May 8th scheduled session.]
Georgia and Kentucky are pursuing measures of their
Wall Street, however, says the company is simply
adding an extra layer of protection, and that it would
take years before the law would be found
The company might not even need the protection
then, said Martin Feldman, a tobacco analyst with
Smith Barney in New York.
"I do have trouble believing that these rules are
constitutional or that they would survive U.S.
Supreme Court scrutiny," he said. "But it could take
a few years for them to be found unconstitutional, so
they'll help the tobacco industry during a sticky
Virginia's Governor, Nicotine Jim Gilmore, opted to help Philip Morris in the litigation facing them in Florida. Acting on a request from Philip Morris, Gilmore entered a PM bill, quietly pushing it through the House of Delegates, until a Virginian-Pilot reporter discovered the PM connection just as the bill was heading into the Senate. The bill passed, and has been signed into law. Now other states, including Florida, are getting into the action to protect tobacco, the biggest drug dealers in the world.
Here is a summary of
items in this section:
Help for Philip Morris, but not textile workers
The Virginia bill, and events
The vote in Virginia.
Letter from GASP to the Attorney General of Virginia, never answered.
However, on April 3, 2000, Richmond, VA area NBC 12 News reporter, Jim Babb, reported that AG Mark Earley told him that Earley thinks the Virginia law is constitutional. This contradicts numerous law professors across the nation.
Here is how The Roanoke Times, March 8, put it, in an article headlined, Relief for Philip Morris, but not for the jobless:
While opposing special relief for idled workers in high-distress areas, Gov. Gilmore favors relief for the cigarette giant.The Virginia House of Delegates passed the bill and sent it to the Virginia Senate without most of the Delegates knowing it was a Philip Morris protection bill. With the publication of the Feb. 25th Virginian-Pilot article, Virginia GASP made certain every Senator knew about the bill. The Virginia Senate passed it 33-6, 1 Not Voting.
THE CRUSADE for extra relief for idled textile workers in the
Martinsville-Henry County area continues, but appears doomed in the face of Gov. Jim Gilmore's opposition.
Gilmore is willing to provide a small and long-overdue increase in unemployment benefits statewide, plus a modest liberalization of unemployment-benefit rules. But why, he and others ask, should unemployed people be treated differently in different places in Virginia?
It's a legitimate question. It also happens to have some pretty good answers. Joblessness where the unemployment rate is 4 percent or less, as in most of Virginia, is fundamentally different from joblessness where the unemployment rate is nearly 20 percent and largely the result of a sudden big bankruptcy, as in Martinsville. The latter reflects extraordinary community distress, and justifies extraordinary relief efforts so that the community can subsist while new employers are recruited.
Here's another legitimate question, but without very good answers: Why should Philip Morris, the New York-based cigarette giant with operations in Richmond, be singled out by the governor and the General Assembly for special favorable treatment?
Gilmore, on the last day of the session, March 10th, asked for an emergency provision, to make the bill law upon his signature. The Assembly agreed. The House passed his amendment 75-18. The 18 who opposed it, are all Democrats:
NAYS-- Delegates Amundson, Brink, Christian, Cranwell, Darner, Deeds, Grayson, Hull, Joannou, Moran, Moss, Plum, Robinson, Scott, Van Landingham, Van Yahres, Watts, Williams.The Virginia Senate passed the emergency amendment 34-6. The six who opposed it were all Democrats:
NOT VOTING--Almand, Jones, J.C., McDonnell, Reid, Rhodes, Spruill
NAYS-- Senators Byrne, Howell, Marye, Puller, Ticer, Whipple.Further events are described later.
Thanks to these Senators, all Democrats: Leslie Byrne, Janet Howell, Madison Marye, L. "Toddy" Puller , "Patsy" Ticer, and Mary Margaret Whipple for standing tall, twice, for health and the U.S. Constitution, and against a vindictive governor and powerful tobacco lobby. They voted against the bill the first time it came through the Senate, and voted against the emergency provision.
also to the following Delegates, all Democrats, who had the courage to
vote against the emergency provision:
Kristen J. Amundson, Robert H. Brink, Mary T. Christian, C. Richard Cranwell, L. Karen Darner, R. Creigh Deeds, George W. Grayson, Robert D. Hull, Johnny S. Joannou, Brian Moran, Thomas Moss, Jr., Kenneth R. Plum, William P. Robinson, Jr., James M. Scott, Marian Van Landingham, Mitchell Van Yahres, Vivian E. Watts, Donald L. Williams.
A March 4, 2000 Virginian-Pilot article by Jennifer Peter was headlined "Gilmore's bid to protect tobacco firm gets Senate approval."The Virginian-Pilot, writer Ian Zack, was the first newspaper [Feb. 25th] to reveal the Philip Morris connection. The bill was carried by pro-tobacco Delegate Eric Cantor (R), who this year opposed Delegate Bill Barlow's (D) no-smoking in public restrooms of restaurants. Cantor wants to replace Congressman Tom Bliley, who will announce his retirement the week of March 6th.
In Excerpts from the March 4th, 2000 article, Senator Mary Margaret Whipple was quoted:
"I'm not in the habit of voting for bills that may be unconstitutional," said Sen. Mary Margaret Whipple, D-Arlington. "And I also think smokers are entitled to the damages the court awards them."A March 4, 2000 story from Bob Lewis of The Associated Press appeared in The Sun-Sentinel in Florida, headlined, "Virginia Senate approves bill protecting Philip Morris", quoted Delegate Eric Cantor, sponsor of the bill:
The bill's unusually swift passage through the General Assembly prompted criticism Friday from several lawmakers, who expressed concern about the surreptitious manner in which it was presented and considered.
The Senate Courts of Justice at one time placed an emergency clause on the bill, which would have made it effective immediately upon receiving the governor's signature. Norment soon removed it, however, because the bill then would have required approval by four-fifths of the Senate and would have had to be sent back to the House for further consideration.
Gilmore could attach an emergency clause to the bill as soon as next week. Any amendment made by the governor requires approval by only a majority of those voting.
am not characterizing it as a Philip Morris bill," Cantor
said. "This allows for a defendant in a lawsuit to avail itself
fully to the appeals process. No entity in the United States
could withstand a $300 billion appeal bond."
"I was never told this was a Philip Morris bill," said Cantor, who submitted the bill at Gilmore's request. But Cantor said he knew it would help any large manufacturer, including a tobacco company.A March 3, 2000, Reuters article headlined:
Sen. Thomas K. Norment Jr. (R-James City) praised the bill.
"This is a minor expression of sensitivity to the corporate presence of a major employer in the Commonwealth of Virginia."
A bond is a financial guarantee - backed by assets or cash - that such verdicts will be paid if appeals fail.
"That's why every state in the union has an appeal bond requirement," said Richard A. Daynard, a Northeastern University law professor and Chairman of the Tobacco Products Liability Project.
don't read this bill quite as
narrowly as what the media has
represented. It would pertain to any
corporation in Virginia. Philip Morris
is probably one of those corporate
citizens that could be covered,"
Senate floor leader Thomas
Norment, a Williamsburg
A professor of corporate law at Washington and Lee University in Lexington also challenged the constitutionality of the measure.
"How can you do it?" David Million told The Associated Press. "Florida has the authority to govern access to its own courts, and the appeal bond is one of the rules set up to maintain its own judicial system. States are supposed to respect
each others' judgments."
A former president of the Virginia Trial Lawyers Association decried the assembly's continuing deference to corporations.
"I find it puzzling and mystifying that a colony that struggled to liberate itself from an oppressive sovereign now seems fascinated with rewarding interests with privileges and immunities that are unbecoming to a democratic society," said Thomas E. Albro of Charlottesville, who this year sought a seat on the Virginia Supreme Court.
The Honorable Mark
Attorney General of Virginia
Copies to The Senate of Virginia
Dear Attorney General Earley:
Several legal experts have already stated that H.B. 1547 is clearly unconstitutional.
I refer to the enclosed opinion by Professor Richard Daynard, of the Northeastern University School of Law, and to the opinions expressed by other legal experts in articles in The Virginian-Pilot, and Florida's Sun-Sentinel, referring specifically to the "full faith and credit" clause, and the "commerce" clause of the U.S. Constitution.
I realize that, thanks to a free press [The Virginian-Pilot], it
is now known that Philip Morris had Governor Gilmore enter this bill,
Delegate Eric Cantor. The bill had already passed the House
this was freely
admitted in the February 25th story, with Mark Miner, spokesman for Gilmore, acknowledging protection of Philip Morris.
In a Reuters national story, March 1, Senator Thomas Norment
the legislature also was acting to protect Philip Morris. These
statements add to the evidence that this is an unconstitutional bill,
to protect one company from the accountability it faces in another
state, in a suit brought by smokers.
If a number of Virginians had brought suit against Michigan auto
and the jury had, as the Florida jury has in the Engle case, found them
liable for deceiving the public as to the safety of the product, and
Virginians were looking to receive punitive damages from those auto makers, would it not be inappropriate for the Michigan legislature to suddenly pass a bill capping the amount of the appeals bond, just to protect their auto makers from Virginians?
What lessons do we convey to the taxpayers, who must foot the bill for any court challenges, when Virginia legislators, their Governor, their Attorney General, and their Lt. Governor, all are silent on the constitutionality of a bill being discussed nationwide?
What lessons in morality, character, and good citizenship do we convey
to the children we rear, or mentor, or teach in school, when we are
as a state willing to subvert the U.S. Constitution in a desperate
to protect an industry which continues to knowingly produce an addictive drug that kills one out of every three consumers when used as intended? How different is Virginia, then, from say, Columbia?
Please comment on H.B. 1547 and its constitutional questions.
Anne Morrow Donley, Co-Founder, Virginia GASP, An all volunteer organization
from Reuters, March 1, 2000:
Virginia panel oks bill to shield Philip Morris assets
March 1, 2000
A Virginia legislative committee unanimously approved a bill
on Wednesday that would protect the assets of tobacco giant
Philip Morris Cos. Inc. against a potentially financially
crippling judgment that could be handed down in a class-
action smokers' lawsuit in Miami.
"We need to be sensitive to our major corporations," said
Senate floor leader Thomas Norment, a Williamsburg
Republican, referring to Philip Morris, the world's largest
tobacco company which employs about 7,000 people in
The Virginia bill, which was opposed by anti-smoking groups,
was expected to reach the Senate floor on Friday or Monday,
and would go into effect on July 1.
You may read the complete article from investigative reporter Ian Zack, The Virginian-Pilot, who exposed the Philip Morris connection in House Bill 1547, carried by pro-tobacco Delegate Eric Cantor (R). Cantor was asked to carry the bill for Governor James Gilmore, who requested it to help Philip Morris. In news reports, Cantor has repeatedly said he was not told by Gilmore that this was a Philip Morris bill. However, Cantor has an unblemished pro-tobacco record, including his vote in the 2000 session voted AGAINST H.B. 886 [Delegate Bill Barlow] to prohibit smoking in public restrooms of restaurants.
The Virginia bill, H.B. 1547, sailed through the House of Delegates, without any mention of Philip Morris.
Following the Friday, February 25th article in The Virginian-Pilot, at the Monday, February 28th subcommittee meeting of the Senate Courts of Justice Committee, there were several tobacco lobbyists in the conference room.
Eric Cantor, the bill's sponsor, succeeded in having an emergency clause added to the bill. This would mean that as soon as the bill passed, the Governor could sign the bill, and it would be law.
Anne Morrow Donley, of Virginia GASP, was the only one to speak against the bill, and stated that it was not a good precedent to be passing a bill to aid one company with litigation against that company ongoing in another state, and pointed to opinions questioning the constitutionality of the bill.
Senators Thomas Norment (R), William Mims (R), Frederick Quayle (R), and John Edwards (D) voted to report the bill to the full committee. Senator Louise Lucas (D) was absent.
The full committee met on March 1, and passed the bill to the full Senate.
EVENTS of March 1,
a recess from the Senate session, late afternoon:
First, on March 1, close to 4:30 pm, the Philip Morris protection bill, H.B. 1547, passed the Senate Courts of Justice Committee, 10-3, amending it to include the emergency provision, so that it would become law "upon passage." Later, the vote was revisited, the emergency provision was removed, and the bill passed unanimously. If the emergency provision had remained, it would have required a 4/5 vote in the full Senate, and then a return to the House for a 4/5 vote to approve the emergency amendment.
At the committee meeting, Anne Morrow Donley, of the Virginia GASP group, again was the only one who spoke against the bill, citing the constitutional questions it raised, as well as the fact that it was designed to protect one company in Virginia, setting a dangerous precedent.
No one spoke for the bill, although at least seven tobacco lobbyists were in the room, including lobbyists for Philip Morris, R.J. Reynolds Tobacco, and Brown & Williamson, all defendants in the Engle trial in Florida.
No one denied the constitutional questions raised. A Reuters story reported the events.
When the bill reached
full Senate on March 4, Senator Madison Marye asked: "This
is a quiet bid to shield tobacco company Philip
Morris from vulnerability in the Florida lawsuit, is that right?"
Senator Thomas Norment acknowledged that Philip Morris might be one of the corporations to benefit from the bill. Senator Mary Margaret Whipple stated, "I'm not in the habit of voting for bills that may be unconstitutional. And I also think smokers are entitled to the damages the court awards them."
1547 passed the Virginia Senate on March 3, 33-6.
The Votes are as follows:
Senators Barry, Bolling, Chichester, Colgan, Couric, Edwards, Forbes,
Hawkins, Holland, Houck, Lambert, Lucas, Marsh, Martin, Maxwell,
K.G., Miller, Y.B., Mims, Newman, Norment, Potts, Puckett, Rerras,
Saslaw, Schrock, Stolle, Stosch, Trumbo, Wampler,
NAYS-- Senators Byrne, Howell, Marye, Puller, Ticer, Whipple--6.
NOT VOTING-- Senator
"Nictoine Jim" Gilmore added an emergency amendment on the last day of the session, needing only a simple majority of each house to approve it. If the emergency amendment had been agreed to in the Senate Committee, it would have taken a 4/5 vote in both bodies to agree to the bill.
The Senate agreed to the emergency provision, 34-6, with the same brave six Senators voting against it.
The House agreed to the emergency provision, 75-18, with one abstension, and six not voting. The vote for March 10th is as follows:
Baskerville, Bennett, Black, Blevins, Bloxom, Bolvin, Broman, Bryant,
Callahan, Cantor, Clement, Councill, Cox, Crittenden, Davis, Day,
Devolites, Diamonstein, Dickinson, Dillard, Drake, Dudley, Griffith,
Harris, Howell, Ingram, Jackson, Johnson, Jones, D.C., Jones, S.C., Katzen, Keister, Kilgore, Landes, Larrabee, Louderback, Marshall, May, McClure, McEachin, McQuigg, Melvin, Morgan, Nixon, O'Brien, Orrock, Parrish, Phillips, Pollard, Purkey, Putney, Rollison, Ruff, Rust, Sherwood,
Shuler, Stump, Suit, Tata, Tate, Thomas, Wagner, Wardrup, Ware, Weatherholtz, Woodrum, Mr. Speaker [Wilkins] --75.
NAYS--Amundson, Brink, Christian, Cranwell, Darner, Deeds, Grayson, Hull, Joannou, Moran, Moss, Plum, Robinson, Scott, Van Landingham, Van Yahres, Watts, Williams--18.
NOT VOTING--Almand, Jones, J.C., McDonnell, Reid, Rhodes, Spruill--6.
The Governor has signed the bill; it is now law. North Carolina, Georgia, and Kentucky are being lobbied to pass similar bills.
The Virginia Group to Alleviate Smoking in Public, known as Virginia GASP, said in a statement that Gilmore was making "an arrogant attempt to stop justice in its tracks, derail true smokers' rights, damage health and the U.S. Constitution."
Anne Morrow Donley co-founder of Virginia GASP, said she believes Gilmore and the bill's House sponsor, Del. Eric I. Cantor, R-Richmond, tried to keep the measure secret.
"It is my opinion that this entire maneuver was carried out by Gilmore and Del. Cantor to ensure that no one would know about it," she said.
Sen. William C. Mims, R-Leesburg and a subcommittee member, said the cap on the bond would in no way protect the company if it loses on appeal.
"They are ultimately going to have to pay it or they're going to have to go into bankruptcy and fight it out there," Mims said.
Tobacco contributed a total of $407,159 to Gilmore for his run for Governor, his No Car Tax PAC, Commonwealth Council PAC, and New Majority PAC, with $175,194 coming from Philip Morris, $45,000 from Brown & Williamson, and $7,500 from RJ Reynolds, all defendants in the Engle case. Source: Virginia Public Access Project.
EXCERPTS from The Virginian-Pilot, article by Ian Zack, February 25, 2000:
The bill would place a $25 million cap on the bond required to appeal a Virginia or out-of-state civil court verdict that involves lucrative punitive damage awards. While the legislation would not block any judgment against Philip Morris, it would allow the company to avoid having to pledge more than $25 million of its Virginia assets for a bond.
It appears to be part of a multistate legal strategy being pushed behind the scenes by tobacco interests.
Philip Morris' name does not appear anywhere in the bill. Company officials and lobbyists declined to discuss it, citing a gag order imposed by a Florida judge.
But a Gilmore spokesman on Thursday confirmed that the governor had met with Philip Morris representatives before submitting the measure earlier this month. He said it is meant to protect working Virginians and the state's vital tobacco industry.
"The governor is certainly not going to let a judge in Florida determine the livelihood of thousands of Virginia workers," Gilmore spokesman Mark Miner said.
EXCERPTS from Florida's Sun-Sentinel, February 29, 2000:
Virginia moves to protect tobacco company's assets from smoking trial in Miami
By TERRI SOMERS Sun-Sentinel
Web-posted: 12:20 a.m. Feb. 29, 2000
Tobacco giant Philip Morris has friends in high places.
In Virginia, where almost 7,000 people are employed by
the cigarette maker, Gov. Jim Gilmore wants to protect
Philip Morris' assets from what some estimated could be an industry-crippling judgment to come out of an ongoing statewide class-action trial in Miami.
Should the Miami jury award sick Florida smokers a huge
punitive award, which some tobacco lawyers estimate could be
as high as $300 billion, the cigarette makers would have to
post the full amount of the judgment plus 10 percent as a
bond pending appeal, said Gregory Maxwell, a Jacksonville
lawyer who has brought cases against cigarette companies.
The bond would ensure the money is there to pay the
smokers, should the tobacco giants lose their appeals.
The U.S. Constitution's "full faith and credit" clause
requires all states to honor judicial
judgments from other states, said Richard Daynard, a law
professor at Northeastern University in Massachusetts.
The Virginia legislation is "clearly intended to protect
a local company from one of the
consequences of doing business interstate," which is a
flagrant violation of the Constitution's Commerce Clause,
said Daynard, an anti-tobacco activist.
A spokesman for the governor confirmed he met with
Philip Morris representatives before submitting the measure.
Clark Freshman, a law professor at the University of
Miami, said the proposal is "silly
for many reasons."
H.B. 1547 [complete text, new language in italics], passed the Virginia House unanimously, before the Philip Morris connection was revealed, and passed the Senate 33-6.
The summary of the bill is as follows:
Civil remedies; appeal bond. Places a limit on the maximum amount of a bond necessary for an appeal, from a domestic or foreign judgment where damages other than compensatory damages have been awarded, which stays the execution of a judgment. If the appellee proves that the appellant is purposefully dissipating or diverting its assets for the purpose of evading the judgment, the bill provides that the limitation on the bond shall be rescinded and the full amount required.
OF RICHARD A. DAYNARD,
PROFESSOR OF LAW AT NORTHEASTERN UNIVERSITY
SCHOOL OF LAW,
REGARDING VIRGINIA HOUSE BILL 1547.
FEBRUARY 28, 2000.
The core purpose of the Unites States Constitution is to turn a collection of states into a single nation. There are various clauses that address this purpose, including the Supremacy Clause, the Commerce Clause and the Full Faith and Credit Clause.
The Full Faith and Credit Clause contributes to this core purpose by
all states to give "full faith and credit" to the judicial judgment
in other states. When Virginia did this in the current
version of section 801-465.1 through 801-465.5 of the Code of Virginia,
it was simply carrying out its obligation under the Full Faith and Credit Clause. Indeed, even if Virginia had passed no such statute, its courts would still be obliged to recognize and enforce judgments from other states under the Full Faith and Credit Clause, combined with the Supremacy
The way in which legal judgments for money damages are enforced in the United States is through execution upon the property of the defendant. That is, the sheriff (or other judicial officer) seizes the defendant's property and sells it at auction for the benefit of the plaintiff, to the extent of his judgment. To stay enforcement, except on grounds that would have been recognized by the court that issued the judgment, is not to accord that judgment "full faith and credit."
It would not be constitutional for Virginia to decide not to enforce
judgment from other states because its courts or legislature would have
applied a different set of rules for determining liability or the
of damages had the case been brought in Virginia. For example, no one
that the Florida courts have jurisdiction in the Engle, et al. v.
Reynolds Tobacco Co., et al., (Case No. 94-08273 CA-22, Circuit
of the Eleventh Judicial Circuit in and for Dade County, Florida) case
over Philip Morris and the other tobacco companies, or that Florida
are within their rights in applying Florida's rules of court to that
If Virginia could reexamine, say, a $1 billion punitive damage judgment
against Philip Morris because it thinks such judgments should be
to $25 million, it
could refuse to enforce any judgment at all that reflected legal policies that differed from Virginia's. Since common law and statutory law vary along many dimensions from state to state, Virginia would be able to pick and choose among out-of-state judgments it wished to enforce. This result
would, of course, be entirely contrary to the Full Faith and Credit Clause, the Supremacy Clause and the core constitutional purposes these were designed to effectuate.
An additional problem with HB1547 is that it is clearly intended to protect a local company from one of the consequences of doing business interstate. As such, it is also a flagrant violation of the Commerce Clause.
For these reasons, HB1547 is unquestionably unconstitutional.
Tobacco 'cap' doesn't fit
Raleigh News & Observer
Date: Dec 22, 1999
The sneaky attempt by executives of R.J. Reynolds and other
companies to slip a self-protection bill into the General Assembly's
Floyd special session was right
in character, given the industry's history of hardball politics. Fortunately, it was rebuffed.
RJR paints the $100 million cap as a favor to North Carolina: Huge awards might put it and other tobacco companies out of business, drying up millions in local and state taxes paid by Big Tobacco.
Industry lobbyists also whisper ominously that bankruptcy could wipe out the state's chances of getting its share of a national tobacco settlement, which is about $10 billion over 25 years.
One legal scholar pointed out that any cap placed by North Carolina on awards levied in another state would be legally problematic. But a long court battle would be needed to resolve that, which the tobacco companies obviously wouldn't mind.
Tobacco certainly is a North Carolina economic mainstay, and big jury awards could ravage the industry. They also could hurt tax revenues. But those effects would have to be weathered, just as the state has adjusted to the downsizing of its vast textile industry. For the tobacco companies, punitive damages would have to represent the cost of doing business. Now legislators need to be leery of further attempts to have them clean up the industry's mess.