Monday, January 22, 2018
News Roundup

U.S. Supreme Court sides against Big Tobacco in Florida litigation

The U.S. Supreme Court denied a tobacco industry appeal Monday in Florida litigation that stretches back almost two decades.

With billions of dollars potentially at stake, hundreds of Florida smokers and their families can still press forward with lawsuits over cancer, emphysema and other maladies.

According to one Wall Street analyst, Florida litigation is one of Big Tobacco's two largest areas of legal exposure.

At issue is whether Floridians can pursue individual lawsuits based on jury findings from a class-action suit that was thrown out years ago. The class-action jury had found that the tobacco industry conspired to withhold evidence that their product was dangerous.

The Florida Supreme Court has ruled several times that people who were part of the class-action case could still use that conspiracy finding when pursuing suits as individuals. The industry appealed the latest cases, totaling about $70 million, citing violation of due process. By rejecting that appeal Monday, the U.S. Supreme Court let the Florida law stand.

So far, 110 cases have already been tried, with about $500 million in outstanding verdicts, according to a Morgan Stanley analysis in May.

Lawyers estimate that about 2,500 plaintiffs from the old class-action suit have filed individual cases that have not yet gone to trial.

Plaintiffs still must prove that they became addicted to cigarettes, which caused illness or death. Juries can still reduce verdicts by assigning a portion of the blame to the smokers. But plaintiffs no longer need to prove that the industry deliberately hid the dangers of cigarettes, a critical component of big punitive damages,

The Supreme Court on Monday "pretty much nailed the coffin in cigarette company appeals," said St. Petersburg attorney Howard Acosta, who represents about 350 tobacco litigation clients and has taken about 20 cases to trial. "This gives a strong green light to continue going forward without fear that the Supreme Court is going to step in and take away verdicts."

Brian May, spokesman for Philip Morris USA, issued a brief statement: "We are disappointed, but we remain committed to vigorously defending ourselves in all pending cases."

It is not clear how this legal action might affect smokers who were not part of the class-action suit, filed in the 1990s.

When the class action was thrown out, Florida courts gave the roughly 8,000 members of the class a special right to take advantage of the jury's finding of conspiracy.

Many of those plaintiffs have since died. A spouse who survived them could still pursue the suit under Florida's wrongful-death law, Acosta said, but if that spouse then dies, the cause of action goes away.

If a smoker dies without a surviving spouse, then the smoker's children can still pursue a suit.

"The cigarette companies are dragging this out because people are dying every day, but there are still plenty of cases," Acosta said.

Plaintiffs are winning about two-thirds of the Florida cases, said Ed Sweda, a senior attorney for PHAI, a health advocacy group at Northeastern University's law school.

He said Big Tobacco lawyers now may try to craft a global settlement with the roughly 50 Florida lawyers who represent the former class-action clients.

In 2013, Liggett Group paid $110 million for such a settlement. That leaves Philip Morris, R.J. Reynolds and Lorillard Tobacco as potential defendants.

"Given the loss they suffered today, it makes sense that sooner, rather than later, they will try to look for a grand settlement," Sweda said. "They certainly can get whacked and that would bring more predictability and stability to the industry."

A similar settlement occurred years ago when states sued the industry over expenses to Medicaid caused by smoking.

Other than the Florida suits, the industry's biggest legal exposure involves old industry claims that "light" cigarettes were healthy, Morgan Stanley said.

Stephen Nohlgren can be reached at [email protected]

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