Fifteen years after a Miami Beach pediatrician suffering lung disease took on the tobacco giants, thousands of smokers’ lawsuits are working their way through Florida courts and early results encourage both sides.
There have been nine verdicts in a massive block of litigation known in the industry as “Engle progeny,” the offspring of a landmark 1994 lawsuit filed by Dr. Howard Engle that produced a $145 billion judgment against cigarette makers six years later.
It was the first class-action brought by sick smokers to make it to trial and the largest civil damage award in U.S. history. The judgment was overturned on appeal, but the multimillion dollar litigation industry spawned by that lawsuit could thrive for years in Florida.
The scorecard: seven judgments for smokers and their families, ranging from $600,000 to $30 million; two wins for tobacco firms.
“I think we’ve seen that these cases are winnable,” lawyer Jonathan Gdanski said after winning a $1.9 million judgment last week in Broward County.
The lawsuit by Engle, who died in July at age 89, was filed on behalf of as many as 700,000 Florida smokers and generated more than 7,000 individual lawsuits, many filed by the relatives of dead smokers. Philip Morris, a unit of Altria, faces about 3,300; Reynolds American’s RJ Reynolds Tobacco Company some 3,500.
The largest judgment returned to date was $30 million in compensatory and punitive damages levied in June by a jury in Pensacola for Hilda Martin, the widow of a longtime smoker. But some of the judgments would require cigarette makers to pay less than $1 million and all of them will be appealed.
Despite losing seven of nine, cigarette makers can take comfort from some early trends. Only two resulted in punitive damages — imposed to rap companies for bad behavior — and in several, the juries rejected them as inappropriate.
SMOKERS PARTLY TO BLAME
In the Pensacola verdict, punitive damages accounted for $25 million of the $30 million judgment.
Some juries are putting the onus for smoking on smokers.
In two Fort Lauderdale trials, the smoker was found 50 percent liable, cutting in half the amount a tobacco company might ultimately have to pay. In a case decided Wednesday in Escambia County, the smoker was found 57 percent liable.
“Even in cases with plaintiffs’ verdicts, juries have held the plaintiffs liable for most of the damages and responsible for their choices,” Altria spokesman Jack Marshall said.
But Gdanski sees that in a different light. In his case, he said, he drew a stark line between the smoker and the tobacco company by telling jurors that Shirley Barbanell, late wife of his 92-year-old client, Leon Barbanell, was partly to blame.
“The tobacco company denied everything. They denied that she was addicted, they denied that she had lung cancer and they denied that she died of lung cancer,” he said. “The jury found for us on all of those points.”
Edward Sweda, senior attorney at the anti-smoking Tobacco Products Liability Project, said it was a good sign that juries were willing to hold cigarette makers accountable.
“The companies have major trial strategies to blame smokers for smoking, to blame their former customer for doing exactly what they, the companies, wanted them to do, which was to keep buying cigarettes and smoke them and buy some more,” he said.
The early results hardly represent a financial hardship for the tobacco firms compared to the shock value of the ruling in 2000, a $145 billion award that hung over the industry for years before it was thrown out in 2003 by an appeals court.
R.J. Reynolds and Philip Morris have both vowed to appeal adverse rulings and vigorously defend the remaining cases.
KEY APPEAL IN SEPTEMBER
Lawyers are scheduled on Sept. 17 to make arguments before the 11th U.S. Circuit Court of Appeals in Atlanta on an important facet of the Engle litigation.
When the Florida Supreme Court rejected the $145 billion award in 2006, it left intact some critical findings of the trial court — that smoking causes diseases, that nicotine is addictive, that cigarettes are defective and dangerous and that tobacco companies concealed the health effects of smoking.
The ruling was supposed to let smokers try their individual cases without having to prove those elements again, making it easier and cheaper for them to take on costly court battles.
A court in Jacksonville rejected the use of those findings, putting thousands of federal lawsuits on hold. An adverse ruling for smokers, while not binding on state courts, could have a chilling effect on those cases, lawyers say.
With thousands of lawsuits pending, Engle could shadow tobacco companies for years. But if the first results are an indication, the lawsuits are unlikely to impede profitability.
“From what we’ve seen so far in judgments, the damages that have been awarded are fairly manageable from a cash-flow perspective,” Morningstar analyst Philip Gorham said. “So from an investor’s point of view, these cases are road bumps rather than a life-threatening financial penalty.”
(Editing by Pascal Fletcher and Doina Chiacu)