The Great Tobacco Deal: It's big, but is it bad for individual smokers who sue?Author(s): MARK CURRIDENSource: ABA Journal, Vol. 83, No. 8 (AUGUST 1997), pp. 20-21Published by: American Bar AssociationStable URL: http://www.jstor.org/stable/27839950 .

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NEWS

The Great Tobacco Deal It's big, but is it bad for individual smokers who sue?

BY MARK CURRIDEN

For 90 days, a group of

state attorneys gener al, trial lawyers and pub lic health advocates met face-to-face with Big To bacco to discuss war and peace.

In hotel conference rooms in Chicago, Dallas, New York and Washing ton, D.C., tobacco repre sentatives were met with tongue-lashings as they were accused of targeting children for addiction, ly ing to the American peo ple and causing the coun try's worst health blight. Several times, lawyers on both sides threatened to walk away from the nego tiating table.

Breakthrough Finally, on a 90-de

gree Washington, D.C., afternoon on June 20, the bickering sides shook hands, hugged and cheered the reaching of a settle

ment agreement of his toric proportions and astronomical dollar amounts. The deal would re quire the major cigarette makers to cough up $368.5 billion over the next 25 years?more than 20 times the settlements reached in the breast implant and asbestos cases combined.

Officially referred to as an agreement in principle, the deal must be approved by Congress, which is expected to make some changes to the proposal before it is enacted.

The agreement is "the most [important] public health achieve

ment in history," said Mississippi Attorney General Michael Moore, one of the lead negotiators for the states, at a press conference after the deal was struck.

But one question remained unanswered amid all the celebra tion: Is the agreement likely to

make it easier or harder for injured individual smokers to win damages

from cigarette companies in court? "That is the multibillion-dollar

question," says Norwood "Woody" Wilner, a Jacksonville, Fla., trial lawyer. Wilner won a $750,000 to bacco verdict last August against Brown & Williamson Tobacco Co. and has filed another 200 cases. He is scheduled to go to trial on anoth er on Aug. 4. "The answer is nobody knows yet," he says.

The agreement would settle pending and future smoking class actions and the lawsuits filed by 40 states that seek reimbursement of smoking-related claims paid by

Medicaid. Individuals could still sue tobacco companies, but could not recover punitive damages. Compensatories for all cases would be capped at $5 billion a year.

Under the plan, the industry also would accept new marketing and sales restrictions intended to drastically reduce smoking?espe cially among teen-agers. It also

would strengthen warning labels and fund a national program to help smokers quit cigarettes.

Untrod Ground Independent legal experts say

it is too early to know what impact the deal will have. "No settlement like this has ever happened before, so there's no baseline for compari son," says University of Wisconsin law Professor Marc Galanter. "However, since no smoker has ever gotten anything from a tobacco company, it obviously can't make it harder [for smokers] to win."

Despite the difficulty of pre dicting the impact of the 68-page proposal, many lawyers are offering their opinions on it. Richard Day nard, a critic who is a Northeastern University law professor and direc tor of the Tobacco Products Liabili ty Project, calls the deal "a body blow to the tort system. It's tort reform for the industry least de

Mississippi Attorney General Michael Moore (right), shaking hands with whisrieblower Jeffrey Wigand after the settlement was announced, calls it the most important public health achievement in history.

20 ABA JOURNAL / AUGUST 1997 REUTERS/BLAKE SELL/ARCHIVE PHOTOS

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serving of reforms or protections." However, trial lawyers who

took part in the settlement say it is a good proposal that punishes cig arette makers while leaving the courthouse door open to any smoker

who wants to sue.

A Defense Eliminated "It's a great deal for individual

plaintiffs," says Ronald Motley, a

lawyer from Charleston, S.C., who

helped negotiate the deal. By agree ing to use new, stronger warning labels that say smoking can cause cancer, "The industry will forever be precluded from arguing that it's not a bad product."

Motley, who represents a doz en states in the Medicaid reim bursement lawsuits, says that once a plaintiff proves his own injury is from smoking, the industry's only defense is assumption of risk. A

linchpin in the tobacco companies' 40 years of courtroom successes has been its argument that smokers knew cigarettes were potentially risky but still chose to smoke.

Critics of the deal say Motley is assuming there will be good trial lawyers willing to accept tobacco cases. "Without the incentive of re

covering punitive damages, there's no reward for the lawyer to take on this complex, highly risky litiga tion," says Vanderbilt University law Professor David Partlett.

"I don't think most good law yers are going to accept or reject a case based on the potential for

punitive damages," counters New Orleans lawyer Russ Herman, a

member of the negotiating team and a leader in the Castano group, made up of 60 lawyers who have filed a series of class action law suits against Big Tobacco. "The farce of this whole debate is the punitive damage issue. It's not an issue. Only 18 states allow puni tives anyway."

Motley agrees. "I've gotten more punitive damage awards than any lawyer in America, and I've only collected on two," he says. "No lawyer lives on punitives."

Another complaint is that the $5 billion per year cap on damages is too low. "Five billion dollars could go awfully fast if just a couple of juries decide they really want to

punish this industry for killing mil lions of people," says George Wash ington University law Professor John Banzhaf, director of Action on

Smoking and Health. Supporters point out that the

$5 billion ceiling is also a floor, meaning that the industry will be required to pay that amount wheth er it wins or loses in court. Any money not paid for verdicts would go to a special fund administered by a group of lawyers and public health advocates to fund anti-smok ing projects.

Besides, supporters say, tobac co litigation has not been very lu crative for plaintiffs so far. During

more than 40 years of litigation there have been only two jury awards: for $400,000 in New Jersey and $750,000 in the case brought by Wilner in Florida. The New Jer sey judgment was later reversed

and the Florida case is on appeal. "There's only about $3 billion a

year paid in all torts in the U.S., so I don't think the $5 billion cap is an

issue," says John Coale, a Washing ton, D.C., lawyer and member of the negotiating team.

Coale, Motley and others say they would not be surprised to see the industry change its long-held po sition of never settling any individ ual smqker suits. The trial lawyers say the companies may try cases the first few years in an effort to deter other suits. But if litigation ex

plodes, cigarette makers may decide it makes financial sense to settle.

The companies "are going to have to pay the $5 billion anyway, so why spend so much more on at

torneys' fees to fight these cases?" says Coale.

Further Tinkering Possible Of course, the agreement still

is not a done deal. Any changes made by Congress must be ap proved by the tobacco companies, the state attorneys general and the trial lawyers. And many legal ex

perts are predicting that even if the plan is passed by Congress, there will be many legal issues.

"I think there's going to be a whole string of legal challenges to this thing before it's over," says Emory University law Professor Frank Vandali. "A legislative set tlement this big, this sweeping, this inclusive will no doubt end up be fore the Supreme Court on several constitutional issues."

For example, legal experts question whether Congress may impose restrictions on state court

judges prohibiting them from con

solidating identical claims against the same defendant. Another issue is whether three state attorneys general who oppose settlement of the Medicaid suits can be bound by the deal.

Indeed, Minnesota Attorney General Hubert H. Humphrey III, who opposes the agreement, has said that "no one should be able to settle my lawsuit but me." Mary land and Wisconsin are the other two states that oppose the deal among the 40 that filed Medicaid suits.

"This U.S. Supreme Court does not look kindly upon Congress putting additional restrictions on states and state courts," Vandali says, "which is exactly what this deal would do."

Tobacco and Torts In exchange for the cigarette industry's $368.5 billion and concessions, anti-smoking negotiators agreed to tinker with the tort system. Among other things, the agreement would:

Settle ali class actions against the industry and prohibit future ones.

Give the companies immunity from punitive damages for past wrongdoing. There would be no limits on compensatory damages.

Give the industry a $5 billion annual cap on the amount of damages it would be required to pay each year in judgments. If verdicts for any given year exceed $5 billion, smokers would have to wait until the following year to collect.

Give the FDA regulatory authority over tobac co products, emfi. that the agency could not

ban nicotine until the year 2009.

Have the companies agree to reduce teen age smoking by 67 percent over the next decade or pay a $2 billion-a-year fine.

Turn over internal documents, work product and attorney-client records to a panel of judges appointed by the U.S. Supreme Court. The panel would release nonprivileged documents.

Require the companies to agree that nicotine is didtetii^ nM that sincMng can cause cancer ande?h?r diseases. :

ABA JOURNAL / AUGUST 1996 21

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