Originally created 02/12/99

More big anti-tobacco verdicts predicted

NEW YORK -- A California jury's record-breaking award of $51.5 million to a former three-pack-a-day smoker could herald a wave of jaw-dropping verdicts against the tobacco industry.

Only three other times have juries awarded smokers damages in health claims against tobacco companies -- and all of them were overturned on appeal. Until Wednesday, the biggest verdict was $1 million, in Florida.

Analysts suggested Thursday that cigarette makers' willingness to pay billions of dollars to settle state lawsuits has made the industry an easier target. The settlements are perceived as a public admission of guilt and a sign that the industry has lots of money to spend, experts said.

"When tobacco companies start offering billions of dollars of settlements, juries lose their sense of how much is a lot," said David Logan, a law professor at Wake Forest University who specializes in product liability.

That seemed to be the case in the lawsuit brought by Patricia Henley, 52, who has inoperable lung cancer and accused Philip Morris of hooking her on cigarettes. It was the first case to go to trial since California repealed a ban on individuals' lawsuits against tobacco companies in 1997.

On Wednesday, the jury awarded her $50 million in punitive damages -- more than three times what her own lawyer asked for. A day earlier the jury awarded her $1.5 million in compensatory damages.

Jury foreman George Loudis said some jurors wanted to go even higher.

"I accused a lot of them toward the end of losing touch with reality," he said. "One woman said she contemplated $1 billion. I mean, the numbers just flowed out of their mouths."

Philip Morris attorneys said the award stemmed from the "passion and prejudice" of the jury, and they plan to appeal.

Ms. Henley apparently benefited from having her case heard after cigarette makers agreed to pay $246 billion to settle claims by states seeking to recover the health care costs of treating sick smokers. As a result of those lawsuits, sensitive documents showing tobacco companies tried to hide the ill effects of smoking have been made public.

"This is the first real lawsuit where you've had the entire record available to the jury," Logan said.

President Clinton recently announced he would follow the lead of states and sue the industry to over the costs of treating smoking-related illnesses. Several foreign countries have also sued. And a class-action lawsuit on behalf of thousands of smokers is being heard in Florida.

Because of the size of Henley's award, analysts predicted many more lawsuits would follow, especially in California, which was among the first state to ban smoking in some public areas and has run an extensive campaign of public service announcements warning of the dangers of smoking.

"I would imagine that the tobacco executives are meeting at this very hour trying to figure out, `Is it too late to clean up our act?"' said Richard Daynard, a Northeastern University law professor who has worked with states that sued the cigarette makers.

"I think really for the first time in their history they're going to have to sit down and say, `Maybe we should go for safer cigarettes, maybe we should go to plain packaging."'

Tobacco stocks fell for a second day Thursday after the verdict, a possible sign of investor nervousness about the industry's future.

Jack Maxwell, an analyst with Davenport & Co., whose Richmond, Va., office overlooks a Philip Morris plant, counseled investors to steer clear of tobacco stocks. He said the industry is more vulnerable than ever, with more than 850 lawsuits pending.

"Everybody's taking a whack at them, from Clinton to the federal government, to trade unions," Maxwell said. "I'm sure a lot of them are going to be thrown out, but there are still going to be some that are going to go forward."


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