- The Washington Times - Thursday, July 6, 2006

TALLAHASSEE, Fla. (AP) — The Florida Supreme Court lifted a huge burden off the backs of U.S. tobacco companies yesterday when it threw out a record $145 billion punitive damage award against them even though it agreed the companies had misled smokers about the dangers of lighting up.

The court, which called the award excessive, also approved an appellate court ruling that it had been a mistake to certify the lawsuit as a class-action representing an estimated 300,000 to 700,000 Floridians made ill by smoking.

The court did say individual smokers could sue the companies, and its decision to uphold the trial jury’s finding that the companies had negligently misled the public about the dangers and addictive nature of cigarettes will be a weapon that can be used in future suits.

“It’s a big sigh of relief, I’m sure, for Big Tobacco, especially in terms of the punitive damages,” University of Richmond law professor Carl Tobias said of the ruling. “I think Wall Street reflects that.”

Shares of Altria Group Inc., parent of the biggest U.S. cigarette maker Philip Morris USA, rose $4.12, or 5.6 percent, to $77.45 on the New York Stock Exchange after briefly rising to a new 52-week high of $79.10.

Shares of Reynolds American Inc., the second biggest domestic cigarette maker, rose $4.21, or 3.6 percent, to $118.57 after rising earlier to a new 52-week high of $120.99. Reynolds American owns the U.S. tobacco businesses of R.J. Reynolds Tobacco and Brown and Williamson.

“The damages would have been crippling to businesses,” said R.J. Reynolds Tobacco Co. spokesman David Howard, who added that the Winston-Salem, N.C.-based company is reviewing the ruling. “It was excessive. … As a matter of law, punitive damages are not intended to put people out of business.”

William S. Ohlemeyer, Philip Morris USA vice president and associate general counsel, said, “As numerous trial and appellate courts have held, tobacco cases cannot be treated as class actions because liability must ultimately be decided on a case-by-case basis.”

Mr. Ohlemeyer said Philip Morris is reviewing the ruling and deciding if more appellate action is necessary.

The class-action trial lasted for two years, but the seven jurors deliberated less than five hours to reach its $145 billion verdict in 2000. The jury that decided the punitive damages said Philip Morris should pay nearly $74 billion, Reynolds more than $36 billion, Brown and Williamson more than $17.5 billion, Lorillard Tobacco Co. $16.25 billion and the Liggett Group $790 million.

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