March 10, 2015, PLLR E-Newsletter | The American Association For Justice

March 10, 2015, PLLR E-Newsletter

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Tobacco companies settle federal cases

Cindy Gierhart
 

Plaintiffs and three major cigarette manufacturers—Lorillard Tobacco Co., Philip Morris, and R.J. Reynolds Tobacco Co.—have reached a $100 million settlement for roughly 400 cases pending in federal district court in Florida.

“This is the first time the big tobacco companies have settled a group of tobacco personal injury and wrongful death cases,” said chief settlement negotiator Joe Rice of Mount Pleasant, S.C. Liggett, a fourth defendant and the smallest of the named companies, settled 4,900 Florida cases for $110 million in October 2013, a portion of which was payable over 15 years.

“Getting a resolution today for these families is a huge thing, and that’s the number-one benefit. . . They’ve been waiting on 15 years,” Rice said.

For those plaintiffs, it signals an end to decades of litigation, beginning with a class action filed in 1994. In 2000, a jury awarded the class $145 billion in punitive damages, finding that smoking causes cancer, that nicotine is addictive, and that the defendants sold cigarettes they knew were defective and unreasonably dangerous.

In the landmark 2006 decision Engle v. Liggett Group, the Florida Supreme Court vacated the punitive damages award and decertified the class. However, the court kept intact the jury’s findings, holding that plaintiffs need not relitigate those issues in their future individual claims against the tobacco companies.

In October 2013, the Eleventh Circuit ruled that the jury’s findings in Engle could apply in federal cases as well as state cases.

As individual cases progressed, the tobacco companies routinely appealed as far as possible, until many plaintiffs died and had no family members left to represent them, effectively dismissing their cases, Rice said. The Supreme Court declined to hear the tobacco companies’ appeals numerous times, most recently in June 2014.

The tobacco companies probably agreed to settle because plaintiffs were winning more cases, the cases are extremely expensive to litigate, and the defendants had significantly whittled down the number of cases remaining in federal court, Rice said.

According to the terms of the settlement, Philip Morris and R.J. Reynolds are each responsible for $42.5 million, and Lorillard must pay $15 million. The settlement is pending judicial approval.

The settlement does not affect the more than 4,500 cases pending in Florida state courts, nor does it affect federal cases that have already gone to trial.

“Hopefully it will have a positive impact on the state cases,” Rice said. There are no current settlement discussions at the state level, he said.