'Big Tobacco' faces final showdown as £190bn case wraps up

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The Independent US

With no place to hide from its legal woes, the tobacco industry suffered one more punch this week when a California jury awarded $20m to a woman dying of cancer and faces yet another blow in Florida, where a different case that cost cigarette makers tens of billions of dollars each is nearing conclusion.

In the California trial, which ended late on Monday, jurors agreed that Philip Morris and R J Reynolds should pay $10m each to Leslie Whiteley, 40, a mother of four, who started smoking when she was 13 and who is expected to die from lung cancer within a year.

Crucially, Ms Whiteley took up the habit after 1969, when the US Congress obliged the tobacco companies to print explicit health warnings on cigarette packets. Until this verdict, the industry had argued that suits by anyone who began smoking after 1969 were bound to fail. The warnings, their lawyers said, should have been enough to make the risks of smoking clear. "One of the most worrying aspects about this is that the industry put on a very strong defence and failed," Martin Feldman, an analyst with Salomon Smith Barney, said of the California verdict. Other experts warned that it could trigger a tidal wave of new suits against the companies by post-1969 smokers.

Even more alarming for the industry is the Florida trial, which is a class action suit. Last summer, the jury agreed that the tobacco companies had engaged in "extreme and outrageous" conduct in selling a product that can cause death. Now they are in the penalty phase and will soon be asked to decide whether compensatory damages should be awarded to three smokers.

In his closing arguments this week, the lawyer for the smokers, Stanley Rosenblatt, recalled the old advertising techniques of the industry, showing Fifties-era television commercials featuring stars such as Lucille Ball. "Sure doesn't seem like a dangerous product, does it?" Rosenblatt said after the video. Referring to the defendants, who include Philip Morris, R J Reynolds and British American Tobacco-owned Brown & Williamson, he said: "Their prosperity caused a lot of unnecessary suffering. They want to walk away."

Crucially, the three smokers under direct consideration are there for an entire class of plaintiffs - every smoker in Florida who cares to join it. They could number one million. If the jury awards compensation to the three, it will then be asked to consider punitive damages for everybody in the class. The final amount, industry lawyers suggest, could top a staggering $300bn.

There would be appeals, but such a verdict could devastate the companies. It has been only two years since they reached a settlement to pay $246bn to all the US states to refund them for public funds spent on caring for sick and dying smokers. All of the industry's woes stem from the uncovering of their own secret memos on the dangers of smoking and especially from the revelations made by former Brown & Williamson scientific researcher and whistle-blower, Geoffrey Wigand.

With the Florida class action trial now nearing its climax, the individual states are naturally becoming concerned that they may never see their money if the case ends in a huge verdict. "Given the complexity and duration of the tobacco settlement, it is rational to anticipate the possibility of a bankruptcy filing or filings at some point," said North Dakota Attorney General, Heidi Heitkamp .