Tobacco industry to fight against punishing verdict for smokers

MIAMI - A Florida jury that already found tobacco companies conspired to sell a dangerous product will begin this week to consider a possible punitive penalty. Anti-smoking activists are looking for a day of reckoning for an industry that has yet to pay a penny to smokers who went to trial.

Big Tobacco plans to offer its $250 billion settlement with states and restrictions on youth marketing as proof that no more punishment is needed in the landmark case brought by an estimated 500,000 sick Florida smokers. But opponents expect the nation's five biggest cigarette makers to pay billions more.

''It can't be hundreds (of billions) because it has to be nonbankrupting, but I think the industry is worth roughly $100 billion, and I think a fair punishment is a nice big hunk of that,'' said Dick Daynard, a Northeastern University law professor who hopes for a verdict in the tens of billions.

The class-action lawsuit against the companies was the first of its kind to go to trial, and the punitive damages phase is important enough that the industry's top executives plan to voluntarily testify - something they rarely do.

''They have a good story to tell. The people running these companies now are not the ones running the companies in the '50s when most of this alleged wrongdoing occurred,'' said David Adelman, tobacco analyst with Morgan Stanley Dean Witter. ''They really and truly have reformed their business practices.''

Peter Jacobson, a University of Michigan associate professor of public health who researches the role of courts in shaping health policy, predicts a change in tone from the 1994 congressional testimony of tobacco executives who denied that cigarettes are addictive in spite of internal industry documents stating the opposite.

He expects the CEOs in this case to project a more conciliatory tone and sympathy for sick smokers, warning that jurors would hold any evasiveness against them.

''Look what happened to Microsoft based on Bill Gates' depositions or Bill Clinton, where the public visually can see and can read what they say and how they say it,'' Jacobson said.

The complex trial has completed two of three phases: the July verdict holding the companies liable, and an April 7 ruling awarding $12.7 million in compensatory damages for medical expenses, pain and suffering.

Now, the jury must decide whether to award punitive damages in order to punish the companies for their conduct.

Circuit Judge Robert Kaye will be asked Monday to rule on motions in the case that have piled up since he went on vacation two weeks ago. Opening statements are expected Tuesday and Wednesday.

The testimony is generally expected to focus on numbers: Economists and actuarial experts will testify about the value of the industry and the size of the class of smokers. The industry intends to call a tobacco farmer and a convenience store owner to speak to the economic impact of a big verdict against the companies.

Using a conservative figure of 300,000 for the number of smokers actually covered by the class-action lawsuit, lead tobacco attorney Dan Webb noted in court that a punitive award of $500,000 each, low by today's standards, would produce a $150 billion verdict.

The simple math was one of the reasons for a bill passed by the state Legislature this month. The industry will be allowed to appeal by posting a maximum $100 million bond, an exception to the standard appeal bond equal to about 125 percent of the verdict.

By Florida law, a verdict can't bankrupt a company, and a judge would be required to reduce an overwhelming award. Consequently, industry profits are what's at risk.

The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson, Lorillard Tobacco Co., Liggett Group Inc. and the industry's Council for Tobacco Research and Tobacco Institute.

''If an award comes down that's substantial as predicted, this will send a message to other prospective jurors that the way in which the tobacco industry has conducted its business and sold its product is no longer acceptable,'' Jacobson said.