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May 7th, 2010:

Florida emerges as center of tobacco litigation universe

lawsuit-cash-advance-fundingLast updated: May 7, 2010

Source: St Petersburg Times

With 9,000 cases awaiting trial in Florida -including many appeals – the state has emerged as the prime battleground in the legal war against Big Tobacco.

On April 26, a Fort Lauderdale jury found Philip Morris USA, R.J. Reynolds Tobacco Co. and Liggett Group responsible for the cancer death of Margot Putney, a Florida woman who began smoking in about 1953 at the age of 15 and died in 1995. The verdict: $15 million.

On April 21, a Gainesville jury said R.J. Reynolds Tobacco was partially responsible in the death of Frank Townsend, who smoked cigarettes and later developed lung cancer. R.J. Reynolds’ portion of the verdict: $46.3 million.

And on April 14, a Pensacola jury found R.J. Reynolds and Liggett responsible for the wrongful death of longtime smoker Janie Mae Clay. The verdict: $21 million.

I could go on. And on.

The pace of tobacco litigation in Florida is fast and furious these days. And ever since tobacco industry defense attorneys scored two wins in this state in 2009, the verdicts – 13 in a row and counting – have turned against Big Tobacco.

This is no fluke. The recent string of favorable verdicts may spell big trouble for a cigarette industry that not so long ago used to brag that it never, ever lost a legal case brought by a dying smoker (or his or her family).

“This ever-growing list of plaintiff victories in Florida constitutes a trend with a capital T,” says Edward L. Sweda Jr., senior attorney for the Tobacco Products Liability Project of the Public Health Advocacy Institute at Boston’s Northeastern University School of Law.

Sweda’s tracked tobacco litigation since his days in law school in 1979. He argues the sheer momentum and volume of these Florida cases with unfavorable verdicts for tobacco will force the industry to settle. If they lose at the appeals level, he says, tobacco companies must actually start paying off the verdicts against them.

And that, argues Sweda, is when it becomes very possible the tobacco industry will start talking settlement.

Why? The drumbeat of rulings against Big Tobacco is remarkable enough. But what boggles the mind and checkbook is that those verdicts are only the first of an estimated 9,000-plus claims that state and federal courts in Florida are due to hear – in theory, at least – for decades to come.

So many lawsuits means the tobacco industry will be forced to put in its second- and third-string legal teams, Sweda suggests, which may result in more losses for Big Tobacco.

No other state boasts anything close to such a volume of upcoming tobacco litigation. For good reason.

A class-action suit was certified in Miami in 1994 claiming 700,000 smokers had been injured by cigarettes and a tobacco industry that did not warn people of smoking risks. An appeals court decided in 1996 that the class action could go forward, though only Florida smokers could be included. This memorable case became known as the “Engle” case for lead plaintiff and Miami pediatrician Howard Engle.

In 2000, the plaintiffs won $145 billion – that’s a b for billion – in what was the largest punitive damage award by a jury in U.S. history. An appeals court later overturned the verdict, and the Florida Supreme Court refused to reinstate it. But the Supreme Court left in place some critical legal changes in the tobacco wars.

First, the court permitted each of the Engle class’ members, known as the “Engle progeny,” to file lawsuits individually. Hence the 9,000-plus lawsuits awaiting their chance in Florida courts.

Second, the court said the Engle jury’s findings on cigarettes, their health effects and the companies’ conduct over the years had to be accepted in future tobacco cases.

That means smokers do not have to prove that cigarettes are harmful every single time they bring suit. It is already a given, the court stated, much to the tobacco industry’s dismay.

In federal cases, tobacco lawyers have appealed arguing these court instructions are unfair. They await a ruling on 4,400 federal cases, part of those 9,000-plus to be tried in Florida alone. But in Florida state courts, the state Supreme Court’s instructions are helping to generate verdicts at a breakneck pace.

What plaintiff lawyers have to prove in such cases is that the smoker (who may or may not be alive) was addicted and smoked a particular brand of cigarette.

In many cases, the verdicts are coming in with the juries assigning a percentage of responsibility to the smoker and the tobacco companies. Cigarette lawyers point to these split verdicts as evidence that these Florida cases are not clear-cut signs that the tobacco industry is losing.

Even so, that’s still left plenty for tobacco companies to pay.

First, of course, every plaintiff victory will be appealed by the tobacco lawyers.

Murray Garnick, a senior vice president at Altria, the parent of Philip Morris USA (which makes Marlboros), has been the de facto spokesman for the tobacco companies in much of this litigation. “Our fundamental case,” Garnick told Virginia’s Richmond Times Dispatch last month, “is that we’re selling a legal product that has risks that are well understood by the consuming public and that people should have the right to decide for themselves.”

And Garnick repeatedly has indicated the tobacco industry has no intention of settling these tobacco lawsuits – even if appeals courts uphold the growing volume of verdicts against it.

Does tobacco have pockets deep enough to handle 9,000 more cases in Florida alone? Can the price of cigarettes simply increase over and over enough to cover such industry costs?

Let’s see what happens when those big bills start to come due.

Written by Robert Trigaux

Ferrari bar code axed in puff of smoke

Ferrari?s Fernando Alonso during Qualifying at the Bahrain International Circuit in Sakhir, BahrainLast updated: May 7, 2010

Source: Times Online

Ferrari erased the bar code from their racing cars last night under pressure from British medical experts who accused the team of using the symbol as a “smokescreen for cigarette advertising”.

The most successful team in Formula One acted quickly and dramatically to revelations in The Times a week ago that pressure was growing for a government inquiry into whether Ferrari’s famous livery broke laws on tobacco advertising, while their relationship, said to be worth $1 billion (about £670 million), with Philip Morris, the maker of Marlboro cigarettes, was held up to intense scrutiny.

Ferrari reacted angrily to the report with Luca di Montezemolo, the team’s president, describing the accusations as ridiculous. But the twin Ferrari cars that will be wheeled out today for practice for the Spanish Grand Prix in Barcelona will not be adorned with the usual black-and-white bar code symbol. Instead, there will be an empty red space with a white border.

The team motorhome, their trucks and uniforms are still emblazoned with the bar code, but it seems to be only a matter of time before they go, too, as Ferrari buckles under criticism from leading figures in the British medical profession who are concerned that the team were engaged in subliminal advertising.

A Ferrari statement said last night: “Together with Philip Morris International we have decided to modify the livery of the cars, starting with the Spanish Grand Prix. The decision was taken in order to remove all speculation concerning the so-called bar code, which was never intended to be a reference to a tobacco brand.”

The rapid decision to ditch the bar code caught the paddock by surprise. Philip Morris has been one of the biggest-spending sponsors in the sport for decades and the multinational company’s deal with Ferrari has been one of the most high-profile and successful. But questions have been asked constantly about how Ferrari could continue to work with Philip Morris more than four years after the rest of the Formula One teams had voluntarily ended tobacco sponsorships. Ferrari have always maintained that their deal with Philip Morris allows for private sponsorship functions and dismissed suggestions that the vivid red colour of the cars — similar to a pack of Marlboro cigarettes — and the black-and-white bar code were a form of discreet advertising.

But Di Montezemolo and his senior managers at the team’s Maranello headquarters in Italy have clearly been rattled by the disclosures in The Times and must be wondering whether they should plough on with their long-time relationship with one of the world’s biggest tobacco manufacturers. It is thought there are still two years remaining on the decade-long deal and the pressure will be on the glamorous Scuderia to fall into line with the rest of Formula One and end its dependence on tobacco money.

Meanwhile, Lewis Hamilton has decisions of his own to make as he contemplates who will replace Anthony, his father, as his manager. The McLaren driver said that he had been inundated with “a million calls” as soon as he announced that he had split with his father. But the 25-year-old has ambitions beyond the narrow confines of the sport and it seems increasingly likely that he will sign with one of the leading agencies, such as IMG, which turned Tiger Woods from golfer to global superstar.

Like Woods — and Ferrari — Hamilton wants to be a worldwide brand. The beauty parade to find the management that can help to turn Hamilton from driver to global household name could be a long one, though. “I am not in any rush,” he said. “I am thinking of getting someone while I am in Formula One but who can progress what I am.”

Written by Kevin Eason