Judge upholds $145 billion smokers' award

MIAMI- A judge Monday upheld the record-breaking $145 billion verdict won by Florida smokers, rejecting claims that the amount will bankrupt the tobacco industry.

Circuit Judge Robert Kaye also widened the scope of the lawsuit to cover more people. He issued the 68-page order on the same day he received a federal judge's decision rejecting federal jurisdiction and sending the case back to him.

''Wow. Oh, my goodness. You delivered us good news,'' said Margaret Amodeo, wife of one of the three Florida smokers chosen to represent thousands of others during the two-year trial.

''It's great,'' said smokers' attorney Stanley Rosenblatt. ''I don't think any punishment is too great for an industry that has caused the kind of injury for so long that they have.''

The judgment opens the door on what is expected to be a prolonged appeals process in state courts by the five largest cigarette companies. The industry must post a $100 million bond to launch an appeal - and tobacco attorneys immediately promised to do so.

Philip Morris vice president William Ohlemeyer called the order improper and inappropriate.

''One thing is crystal clear. Under Florida law, juries cannot award damages that would financially cripple or destroy a company, and no industry in the world can pay a $145 billion punitive damage award,'' he said.

Under Florida law, a punitive verdict cannot bankrupt a defendant.

The six-member jury set a U.S. record with its punitive damages verdict in July in the first smokers' class-action suit to go to trial. The same panel earlier decided that the industry makes a deadly, dangerous product and awarded $12.7 million in compensatory damages to the three sick smokers, representing from 300,000 to 700,000 sick Florida smokers or their families.

Industry lawyers argued that the companies could afford to pay only $150 million to $375 million, and that they would be put out of business if the award was much higher.

Kaye concluded the punitive award was reasonable.

''The award is in keeping with the degree of wrongful conduct without sending the defendant into bankruptcy,'' he wrote.

Based on ''the decades of abuses committed by the defendants,'' the judge said he was more shocked by their ''concerted behavior ... over so many years'' than the award itself.

Kaye also decided the jury's findings of industry conspiracy, fraud and misrepresentation outweighed a four-year statute of limitations. That means the lawsuit covers smokers with illnesses diagnosed more than four years before the lawsuit was filed in 1994, not just between 1990 and 1994.

Martin Feldman, a tobacco stock analyst with Salomon Smith Barney, said he was surprised by Kaye's decision to keep the award intact.

''A brief perusal of the companies' balance sheets and accounts would indicate that they simply cannot pay $145 billion on a single payment,'' he said.

The defendants are Philip Morris, which was ordered to pay $73.96 billion; R.J. Reynolds, $36.28 billion; Brown & Williamson, $17.59 billion; Lorillard, $16.25 billion; Liggett Group, $790 million; and the industry's defunct Council for Tobacco Research and Tobacco Institute.


On the Net:

Tobacco links: http://www.umich.edu/(tilde)umtrn/websites.html


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