Big Tobacco's Courtroom Winning Streak Ends in Florida

Tobacco industry lawsuits
Tobacco industry lawsuits

In 2006 Big Tobacco won a major victory when the Florida Supreme Court threw out a $145 billion verdict against the industry by ruling smokers couldn't sue as a class. Instead, they had to bring individual suits. In the wake of that decision -- known as "Engle" -- some 8,000 lawsuits have been filed. Now, the industry is winning some and losing some.

This week, it lost big: an $80 million verdict to a smoker's daughter. Most of that is punitive damages, which the judge will surely will reduce. (For example, an earlier $300 million Engle verdict was later reduced to $39 million.) The smoker -- James Cayce Horner -- started smoking two packs a day in the 1930s as a teenager and died in 1996 from lung cancer at 78.

The $80 million that Horner's daughter won is the third-largest Engle victory so far, and much more than the $18 million per case that plaintiffs would have to win on average for the 8,000 pending cases to total the $145 billion settlement in the original Engle suit. And on top of the damages, Big Tobacco would face many millions in legal fees for litigating 8,000 cases.

Mixed Tea Leaves

Of course, not every plaintiff will win, and many of the early verdicts for plaintiffs were smaller than $18 million, though some had been bigger. But exceeding $18 million per win may not be too hard. So far, plaintiffs have won 21 of the 32 cases for verdicts totaling $310 million, an average of about $15 million.

Still, 30 cases is less than 1% of the lawsuits filed, and the early tea leaves are mixed. After losing about a dozen cases, tobacco had won the eight decisions right before this one, suggesting that maybe it had figured out how to win. But the latest plaintiff victory dispels that notion. Not that the winner should count her money yet. "Tobacco always appeals," reports Bloomberg Businessweek, and appeals take about three years.

I imagine both sides would like to reach a settlement if they could. One problem, however, is that the verdicts have been inconsistent. As one plaintiff's attorney told the Am Law Litigation Daily, "there's not much to differentiate the facts of the cases smokers have won from those they've lost." That makes settling really hard.

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It's hard to imagine, but the tobacco industry may come to regret winning the original Engle case. Of course, it's possible to argue that it wasn't really a win for tobacco after all. That's because the court ruled that plaintiffs didn't have to prove much of their cases each time. The court held that in each individual case, the pro-plaintiff jury decisions from the Engle case could be used. So plaintiffs don't have to fight about the addictiveness of cigarettes or whether the tobacco companies committed fraud by concealment or negligence, for example.

Given that holding, why do plaintiffs lose? Well, the defense that smokers made a personal choice to smoke and are responsible for that choice is compelling regardless of how badly the industry behaved. So far, Big Tobacco wins about a third of the time.