Tobacco vs. the pack

MIAMI - A decade has passed since a group of sick and angry cigarette smokers banded together in an unprecedented legal fight against the tobacco industry. A two-year trial produced the biggest award ever delivered by an American jury — $145 billion.

Now, in the midst of an evolving legal climate on tobacco-related lawsuits, Florida’s Supreme Court is ready to review a lower court ruling throwing out both the money and a decision allowing the state’s smokers to sue as one.

The two warring sides have been joined by an assortment of interested parties, including public health, public policy and business interests, for arguments set Wednesday.

“This is a case that’s just too big for the Florida Supreme Court to ignore,” said Columbia University law professor John Coffee.

Martin Feldman, a tobacco analyst with Merrill Lynch, considers the Miami case “one of the three most important challenges against the industry” — all with potential multibillion-dollar consequences. The others are the Justice Department’s racketeering claim on trial in Washington and a Philip Morris appeal challenging a $10.1 billion verdict in a light cigarette class action in Illinois.

The 3rd District Court of Appeal in Miami attacked virtually every part of the Miami smokers’ case last year, but another panel on the same court issued an order that guided the trial by shrinking the lawsuit from a national class action to a statewide case in 1996.

The state’s high court did not say why it wanted to examine the Miami case.

But attention has focused on three legal issues — whether smokers could bind together as a class, the appeals court’s elimination of punitive damages as an option based on the state’s settlement of its Medicaid reimbursement claims in 1997, and the trial court order allowing the gigantic punitive damage award for all smokers when the compensatory claims of only three cancer patients were aired.

The tobacco landscape has changed over time. After decades of denials, industry leaders acknowledge their products are addictive and can be deadly. Cigarette sales are falling as tobacco companies spend more than ever on severely restricted marketing. The industry also is paying annually on $246 billion in settlements reached in the late 1990s to cover smoking-related health care costs.

On the legal front, more than 50 federal and state courts across the nation have largely disbanded class-action attempts by smokers. Large-scale personal-injury class actions covering breast implants and asbestos injuries survived because they ended in settlement — a line drawn in the sand by the tobacco industry when it comes to smokers.

The tobacco industry has put on a formidable court fight whenever challenged, and Mr. Feldman said fewer trials are set in the next year on individual smoker lawsuits than at any other time since the late 1990s.

Defendants Philip Morris, part of Altria Group Inc., R.J. Reynolds, Brown & Williamson, Lorillard Tobacco Co. and Liggett Tobacco Co. insist smoking histories and illnesses vary so much that the lawsuit covering 300,000 to 700,000 Floridians cannot survive on appeal. R.J. Reynolds and Brown & Williamson have since combined as Reynolds American Inc.

“The odds are very much against certifying this broad a case today,” Mr. Coffee said. “It would be a stunning deviation from the current state of the law.”

Bob Montgomery, one of the lawyers who represented Florida in its Medicaid recovery lawsuit, applauds the husband-and-wife law partners Stanley and Susan Rosenblatt for taking on “a Herculean case” for the smokers, but sees little chance of getting the original verdict reinstated.

“If in fact they decertify, they say no class action, it’s goodbye Charlie,” Mr. Montgomery said. “I frankly don’t have much confidence that that case will be affirmed.”

The punitive damage award is in question several ways. Tobacco companies insist they would be forced out of business trying to pay, and state law bars bankrupting verdicts. They also argue punitive damages must bear some relationship to compensatory damages and cannot be decided for the group until everyone’s compensatory claims are addressed.