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RJR plans to appeal Florida jury's ruling on damages from smoker's lawsuit
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Published: June 3, 2009
Only time will tell if a new bar has been set regarding damages from smokers' lawsuits in Florida.
But it's clear from a jury's ruling this week that tobacco manufacturers, particularly R.J. Reynolds Tobacco Co., are facing significantly higher potential awards than had been projected.
A jury in Pensacola, Fla., on Monday awarded $5 million in compensation damages and $25 million in punitive damages from Reynolds to the family of Benny Martin.
Reynolds said it will appeal the decision.
"It is our position that the trial proceedings were unconstitutional and otherwise inconsistent with law," Reynolds spokesman David Howard said. "We believe the verdict will ultimately be reversed on these and other grounds."
The award in the Martin case is by far the highest of the seven cases in which a ruling has been made. Plaintiffs have won five cases and the manufacturers two.
Philip Morris USA has appealed an $8 million jury award and Liggett Group Inc. has appealed a $700,000 award. Reynolds also is facing jury awards of $1.5 million and $1.2 million.
"The damages awarded (in this week's case) are not in line with the other jury decisions, so we view it as an isolated decision," Howard said.
Howard said that the damages awarded in the other two cases involving Reynolds were just compensatory, and the juries found the plaintiff 50 percent at fault.
"Therefore, Reynolds is liable for half the damages amount," he said.
The cases sprung from a decision in 2006 by the Florida Supreme Court that decertified a class-action lawsuit initially filed by Howard Engle. The 2006 ruling allowed former class members to file individual lawsuits stating that cigarettes caused their respective illnesses.
The focus of many of the lawsuits is whether tobacco manufacturers "conspired to make their products more addictive to customers and withheld information about the dangers of smoking," according to Robert Loehr, one of the attorneys for the Martin estate.
Analysts have said there is the potential for about 8,000 of these individual lawsuits in Florida. According to Philip Morris, about 4,000 claims have been put on hold pending a review by a federal appeals court of the constitutional issues that arise from allowing the plaintiff to rely on prior Engle jury findings.
Howard said that Reynolds is aware of at least 3,284 potential individual lawsuits, of which Reynolds is a defendant in 3,270.
Matt Schultz, another lawyer for the Martin family, said that it's hard to know yet whether the $30 million combined verdict represents the top in terms of jury awards.
"We'll have to see another 10 to 20 jury rulings before we'll know the significance of $30 million," said Schultz, whose firm Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor, PA is handling 45 individual lawsuits.
"Although there is some common evidence in the lawsuits, each case will be based on its own merits. The reason why Reynolds was singled out in this particular case was Mr. Martin smoked Camel and Lucky Strike cigarette brands."
When asked whether the $30 million could be the bar for damages, Howard said he couldn't speculate, "but clearly the damages awarded in the Martin case were excessive and unprecedented for Engle progeny cases heard to-date."
Stephen Pope, the chief global-market strategist with Cantor Fitzgerald Europe, said that the Martin ruling could establish "the lower limit for liability for tobacco players."
Schultz said that Martin smoked for 20 years before warnings labels were put on cigarette packs.
"In deciding the case, the jury ruled that the deceased smoker Benny Martin was 34 percent responsible for the lung cancer damages and that the tobacco company was 66 percent at fault," he said.
Pope said that "joint responsibility between tobacco company and smoker has to be applied" in these individual lawsuits.
Edward Sweda, a senior attorney for the Tobacco Products Liability Project in Boston, said he believes the $30 million jury award is another major blow to the tobacco industry.
"The unmistakable message from this jury is that the tobacco industry's reprehensible misconduct must not be minimized or excused," Sweda said.
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