Florida jury slams Reynolds Tobacco with $23.6B in damages

The R.J. Reynolds Building has served as downtown Winston-Salem's architectural signature for 85 years.

The R.J. Reynolds Building has served as downtown Winston-Salem's architectural signature for 85 years.

WINSTON-SALEM, N.C. — R.J. Reynolds Tobacco Co. was hit Friday with $23.6 billion in punitive damages by a Florida state court jury, one of the largest such awards in U.S. corporate and legal history, according to the Winston-Salem Journal.

A jury in Escambia Court determined Thursday that the widow of Michael Johnson Sr., Cynthia Robinson, should receive $17 million in compensatory damages in the “Engle” case even though the jury determined Johnson was 30 percent responsible for his own illness.

Engle cases have been scrutinized since they sprang from a decision in 2006 by the Florida Supreme Court that decertified a $145 billion class-action lawsuit initially filed by Howard Engle. That ruling allowed former class members to file individual lawsuits stating that cigarettes caused their respective illnesses.

About 8,000 plaintiffs have Engle cases pending in Florida courts.

“We hope this verdict will send a message to R.J. Reynolds and other big tobacco companies that will force them to stop putting the lives of innocent people in jeopardy,” plaintiff attorney Willie Gary said in a statement Friday. Gary is one of the nation’s foremost and controversial attorneys involved in personal-injury lawsuits.

Though the punitive damages award is staggering — 75 percent of Reynolds American Inc.’s market capitalization — there is ample legal precedent in and outside the tobacco industry that the amount is likely to be ruled excessive by a state appeals or state supreme court, and possibly thrown out or drastically reduced.

“The damages awarded in this case are grossly excessive and impermissible under state and constitutional law,” Jeffery Raborn, assistant general counsel for R.J. Reynolds, said in a statement Saturday. “This verdict goes far beyond the realm of reasonableness and fairness, and is completely inconsistent with the evidence presented.

“We plan to file post-trial motions with the trial court promptly, and are confident that the court will follow the law and not allow this runaway verdict to stand.”

Of the 118 Engle cases that have gone to trial and reached a verdict, 78 have been for plaintiffs and 40 for defendants, according to Ed Sweda, a senior lawyer for the Tobacco Products Liability Project at Northeastern University School of Law.

The jury verdict came at the end of a heady week for Reynolds, which made official Tuesday a long-rumored bid of $27.4 billion for rival Lorillard Inc. to add Newport, the top-selling menthol brand, to its cigarette portfolio.

According to Gary, Johnson contracted lung cancer as “a direct and proximate result of smoking cigarettes. Johnson became addicted to cigarettes and was unable to quit smoking despite numerous attempts.”

“As a result of their negligence, my client’s husband suffered from lung cancer and eventually lost his life.”

Reynolds would not be responsible for paying damages while the verdict is under appeal. However, it also could take years and millions of dollars in legal fees before a ruling on the appeal could be made.

The most relevant precedent began in October 2002 when a Los Angeles jury awarded $28 billion in punitive damages against Philip Morris USA — the largest tobacco damages award ever issued in an individual case. The plaintiff, Betty Bullock, 64, received $850,000 in compensatory damages from the same jury.

In August 2011, an appeals court reduced the punitive damages to $28 million. Bullock died from inoperable lung cancer in February 2003.

Howard Acosta, an attorney for Robinson, told Law360 on Friday that Reynolds would need to bond the verdict to appeal it, which he said could be as much as $2 billion. Acosta said the bond alone should motivate the tobacco company to “consider settling this case.”

Reynolds spokesman David Howard said he believes Florida state law caps the appeal bond at $5 million.

Another legal element likely to diminish punitive damages for Robinson is that lawsuits involving staggering punitive damages have reached the U.S. Supreme Court level on appeal.

According to a Reuters news agency story, the court ruled in a 2007 lawsuit involving Philip Morris that punitive damages to punish defendant for harming nonparties of the case amounted to a government taking without due process, and was thus unconstitutional.

In October, the Supreme Court declined to hear the appeal of tobacco manufacturers, including Reynolds, of a multimillion-dollar Engle jury award. It was the third time since 2012 that the Supreme Court made that decision.

That meant in those four cases, the tobacco manufacturers had no further legal recourse and were required to pay the award. Reynolds said in its first-quarter earnings report that it had spent $69 million on Engle cases.

In October, Vector Group Ltd. and its Liggett Group tobacco subsidiary reached a settlement in which it will pay a combined $110 million to more than 4,900 Engle plaintiffs in exchange for the dismissals of their claims. It is paying $61 million in a lump sum and $49 million over a 15-year period.

Stephen Pope, managing partner for Spotlight Ideas in London, said the remaining tobacco manufacturers’ Engle exposure could be closer to $2 trillion nationally.

 

18 comments

  • Dirty dick

    Reynolds will motion an appeal and this idiot will not get hardly anything. I mean come on, you are a SMOKER and you know it’s killing you! Frivolous lawsuits make me sick and in the meantime killing American jobs.

  • FaithC

    This is ridiculous. If you smoke, you know the risks. Nobody holds a gun to a smokers head. If you don’t want to get sick…don’t smoke. It is that easy. The tobacco companies are not responsible for your stupid choices.

    • Johnny

      Ok, that might be true now. But, this man started smoking 40 years ago in a time when the tobacco companies knew the dangers and actively lied to us about them. It is easy to say he should have known better but a lot has changed since then. I have no sympathy for someone who starts smoking now but things were a lot different in the 60s and 70s.

  • JB

    This is one of the biggest miscarriages of justice. I get the family’s feelings about their losses. Reality is that people have known of the dangers of smoking for far too long for people to have these large settlements granted them. It’s obvious that the judges in these cases are biased.

  • ReduceGHGs

    This reminds me of the fossil fuel industry that knows about the dangers of continued burning their products but hides the fact and works to misinform the public. Sounds like it’s ripe for a class action lawsuit!
    Join the efforts to change course. Apathy/inaction effectively advocates for more of the same destructive behaviors.
    ExhaustingHabitability(dot)org

  • theremom

    So if smokers can sue these companies for there own choices then cant someone sue alcohol makers for a drunk driver killing there love one? Just saying.No difference to me.

    • Dirty Dick

      @”Theremom” you make a decent argument; however it would be like me suing Trojan condoms for my girl getting pregnant because the condom broke.

      • Johnny

        There is a huge difference. Alcohol companies and condom manufacturers didn’t lie about the risks of their products. This has a lot more to do with the tobacco companies lying about the risks than there being risks. If Trojan said their condoms were 100% effective and she got pregnant, you could sue. But they warn that it’s not foolproof. The same is true for alcohol – if they said you could drink 20 shots and still drive successfully, then you could sue. But they don’t say that. Big tobacco lied to us about the risks for many, many years.

      • Dirty Dick

        It appears Johnny says drank too much of the Kool aid for too many years wake up Johnny!! If you re one of these idiots that is “sue someone happy” you deserve to fall over. Big tobacco provides me a very nice living thank you very much to all of you smokers out there I love you!!

  • JB

    Since we, as a society, have opened the floodgates to questionable lawsuits since they’ve allowed so much money to be paid out for smoking lawsuits.

    • JT

      No, your analogy is nowhere near parallel. Take a logic course. Man, I’m glad you geniuses are not in the legal profession–you’d starve. The lawsuit is not over his “choice” to smoke; rather, it is over what the company knew about their product and either reported to the contrary or didn’t report at all. A better analogy is if Smithfield knows all of their pork products are infected with trichina worms and did not tell anyone or told people that trichinosis could not be contracted through contact with trichina worms. Did ANY of you people, besides Johnny and ReduceGHGS, pass the 4th grade?

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