Recently in Tobacco Category

A landmark tobacco case that was first tried three years ago and which was returned to the Missouri Court of Appeals by the Missouri Supreme Court in July this year, finally moved forward this week.
In February 2005, a Jackson County jury found Brown &Williamson responsible for the death of Barbara Smith who died of a heart attack at the age of 73 after smoking Kool cigarettes for almost 50 years. The jury awarded Smith's family, who brought the case against the tobacco company, $2 million in compensatory damages which they later reduced to $500,000. They also set a precedent by awarding the family $20 million in punitive damages - the largest ever in a Missouri smoking case.
The tobacco company appealed and since the basis of the jury's decision for the punitive award was unclear, the Missouri Court of Appeals ordered a new trial in August last year only for the issue of punitive damages.
The Supreme Court heard the trial in February but sent the case back to the appeals court in July. Thus the appeals court re-adopted its earlier August 2007 decision and sent the case back to the trial court for a trial exclusively for punitive damages. 

Pic courtesy yoppy from flickr.com

Beginning its new term this October,  the supreme court is expected to deny most of   the appeals and arguments as regards law suits against tobacco companies. Out of the thousands of appeals only 10 appeals have been accepted for next year, the first being a dispute over whether federal regulation of cigarettes prevents smokers from suing tobacco companies for allegedly deceptive advertising of light cigarettes

Altria group and its subsidiary were sued by 3 Maine residents for malpractices in marketing. However the federal law forbids the state from imposing any specification for the advertisement of cigarettes,thus ruling out any  such law suit.

A federal judge is considering whether tobacco companies should be tried on the question of whether they deceived smokers for years about the safety of "light" cigarettes.

The case, filed in 2004, is part of the latest legal assault against tobacco companies. After the companies successfully warded off many lawsuits by people claiming to have been injured by smoking, more cases have been filed against the companies for defrauding consumers by selling light cigarettes.

In this case, known as Schwab after the lead plaintiff, Barbara Schwab, the lawyers asserted that cigarette makers had deceived smokers into thinking that light cigarettes, representing 45 percent of the market, were safer or less addicting.

While many of these so-called light cases have been unsuccessful, the Schwab case follows an opinion last month by a federal judge in the District of Columbia, who found that cigarette companies had engaged in decades of fraud and racketeering, including misleading smokers and concealing information about the health risks of light cigarettes.

A federal judge has dismissed a lawsuit by a group that claimed that tobacco companies should pay $60 billion spent by Medicare on smoking-related illnesses.

United Seniors Association Inc., a Virginia-based lobbying group for senior citizens, sued three tobacco companies last year, claiming they intentionally hid cigarettes' addictive properties and should be held liable for Medicare's expenditures since August 1999 to treat illnesses related to smoking.

The lawsuit named as defendants Philip Morris USA, R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., both individually and as the successors to the American Tobacco Co., Lorillard Tobacco Co. and Liggett Group Inc.

In a hearing in June, the companies asked U.S. District Judge Richard G. Stearns to dismiss the lawsuit, saying they had not been found liable for the medical bills and United Seniors had no standing to bring the lawsuit.

United Seniors had claimed that under the Medicare as Secondary Payer law, they could seek to recover government losses on behalf of taxpayers.

In his order filed Monday, Stearns said the case was a reprise of claims brought by the federal government in the 1990s against tobacco companies.

"These efforts by the government came largely to naught, with most courts rejecting the government's various theories of tobacco company liability," he wrote.

Stearns also pointed to a similar case in Florida, in which an appeals court said the plaintiff must prove a defendant's responsibility to pay Medicare costs before trying to recover them under the Medicare as Secondary Payer law.

Stearns' decision confirms that these types of lawsuits lack merit, Martin L. Holton III, deputy general counsel for litigation at R.J. Reynolds, said in a statement.

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The Florida Supreme Court has ruled that Philip Morris USA and other cigarette makers will not pay a $145 billion award, the largest in U.S. history, to Florida smokers. The court refused to reinstate a punitive-damage award that the companies had said would bankrupt them.

The case related to a $145 billion verdict that a Miami jury ruled in July 2000 against Philip Morris, a unit of Altria, Reynolds American Inc.'s R.J. Reynolds Tobacco and other U.S. cigarette companies. A state appeals court had rejected the award in May 2003, calling it "grossly excessive.'' The Florida Supreme Court affirmed that appeals decision today.

The ruling comes as a shot in the arm to the tobacco industry, reeling under multiple lawsuits over smoking-related deaths and disease. It also paves the way for Altria to separate the company's tobacco and food businesses. Shares of Altria Group Inc. and Reynolds American Inc.'s R.J. Reynolds Tobacco jumped to all-time highs as a result of this ruling.

The court held that the case cannot be treated as a class action, and Florida smokers must proceed with their claims individually. Florida smokers in the case were given one year by the ruling to file individual claims.

The court found that the amount of punitive damages was excessive "because it would bankrupt some of the defendants.'' The $ 145 billion verdict was also found to be improper because the trial court had decided the punitive amount for the whole class without first determining what actual damages were needed to compensate smokers for their injuries.

In today's decision, the court upheld $6.9 million in compensatory damages awarded to two smokers who served as representatives of the state-wide class. The court reversed $5.8 million in compensatory damages to a third class representative.

The Florida suit was filed in 1994 on behalf of some 700,000 smokers in the state, including Howard Engle, a Miami Beach pediatrician with emphysema who represented the plaintiffs' class. Florida's 3rd District Court of Appeal overturned the award and decertified the class, asserting that "the issue of damages requires individualized proof with regard to each smoker.''

In addition to Philip Morris, the world's biggest cigarette maker, and R.J. Reynolds, the other defendants in the case include Brown & Williamson Tobacco Co.; Loews Corp.'s Lorillard Tobacco Co.; and Vector Group Ltd.'s Liggett Group Inc. In July 2004, R.J. Reynolds acquired Brown & Williamson's U.S. operations.

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The Illinois Supreme Court has ordered that $2.15 billion in cash that was securing the appeal bond in the Price "lights" case be returned to Philip Morris.

The Price "lights" case is a class action suit filed against Philip Morris in Madison County, Illinois in 2000. The plaintiffs alleged that the descriptors -"lowered tar and nicotine" on every pack of Marlboro Lights cigarettes, misled "Lights" smokers to believe that the Marlboro Lights cigarettes were actually less hazardous than the full-flavor brands.

The smokers claimed that though the Marlboro Lights cigarettes did not pose any health risks to them, they suffered economic damages and asked the Court for reimbursement.

In 2003, Madison County Circuit Court ordered Philip Morris to pay a total of $10.1 billion in compensatory and punitive damages including attorney fees in the amount of $1.775 billion. Philip Morris appealed the decision.

Pending the appeal, Philip Morris was ordered to deposit an appeal bond secured by $800 million in cash and a pre-existing $6 billion long-term note to be placed in escrow pending the resolution of the case.

The $6 billion term note bears an interest rate of 7%. The interest amount of $210 million received every six months was to be deposited in the county account beginning October 1, 2003.

In 2004, Philip Morris appealed to the Illinois Supreme Court to overturn the $10.1 billion judgment and decertify the Price class.

The Supreme Court concluded that Philip Morris was specifically authorized to use descriptors such as "light" and "low tar" by the Federal Trade Commission. The trial court's judgment was reversed in favor of the company. The plaintiffs' motion for rehearing was denied. 

With the Supreme Court's verdict favoring Philip Morris, the total amount of $2.15 billion cash including the interest accrued on all cash deposited into the county account, the $800 million paid in quarterly installments and the interest generated from the $6 billion note, will be returned to the company. The Supreme Court's order will also terminate the company's obligations to deposit payments on the note and to pay administrative fees to the Madison County clerk.

If the U.S. Supreme Court declines to hear the plaintiffs' appeal, the $6 billion note, which also secured the 2003 judgment, will be returned to Philip Morris.

The Supreme Court will decide if tobacco giant Philip Morris must pay nearly $80 million in damages to the family of a longtime smoker, Jesse D. Williams. At $79.5 million, the award in the Oregon case is more than 150 times the $521,000 actual damages awarded by the jury.

The outcome of this case will determine if companies could be shielded from large jury awards. A 2001 U.S. Supreme Court ruling had recommended there should be no more than a 9-to-1 ratio between punitive damages and other compensatory damages.

Read "Court Trims $ 150 Million Tobacco Award" posted on May 18.

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Oregon's Court of Appeals has overturned a 2002 jury verdict that had ordered Philip Morris to pay $150 million in punitive damages to the estate of Michelle Schwarz, of Salem, who died of lung cancer. The case has been sent back to the circuit court to reconsider the amount of punitive damages.  Philip Morris attorneys had argued that the jury should have followed a 2001 U.S. Supreme Court ruling that recommended there should be no more than a 9-to-1 ratio between punitive damages and other compensatory damages.

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