TOBACCO COMPANIES

Under Attack

For decades, tobacco companies rarely lost health-related lawsuits filed by consumers. This trend changed in the 1990s as the tobacco industry paid hundreds of billions of dollars in settlements. Law suits were filed by individuals, groups (class action suits), states, and cities. As a result, cigarette prices soared. Smoking was made even more expensive as sales taxes on cigarettes were increased in an effort to discourage smoking and to raise revenue. State and federal agencies, such as the U.S. Department of Health and Human Services, launched antismoking campaigns, primarily targeted at youth. According to the Centers for Disease Control (CDC), an estimated forty-seven million adults in the United States were cigarette smokers in 1999. While cigar smoking increased by almost 70 percent from the 1980s, mostly among males, overall adult smoking consistently declined during the decade. After a twenty-year downward trend, however, tobacco use among individuals under the age of eighteen increased by more than 30 percent. Tobacco use was responsible for more than 430,000 deaths each year, or one in every five deaths, and associated health costs were $100 billion.

States

On 14 November 1998 a settlement was reached between four of the largest cigarette manufacturers and forty-six states. In the largest civil settlement in U.S. history, Philip Morris, R. J. Reynolds, Lorillard, and Brown & Williamson agreed to pay $206 billion to cover the medical costs of smoking-related illnesses. The states were scheduled to receive $12 billion up front over the first five years. The rest would be paid in annual installments until 2025. In addition, the companies agreed to spend __BODY__.7 billion on research programs aimed at discouraging smoking, especially among teenagers. The class action settlement also required that tobacco companies halt advertising on billboards and in transit stations, such as bus terminals and subways. Further, the companies were banned from selling clothing and merchandise that carried cigarette brand logos. The prohibitions meant that cartoon characters such as "Joe Camel" could not be used in advertising. While the settlement aimed at reducing smoking, it did not include any specific penalties if smoking did not decline. There were also no penalties if underage smoking increased.

Jury Awards

There were also several jury verdicts against the tobacco industry. In Widdick v. Brown & Williamson Tobacco Corporation, Angela Widdick filed suit against the company for the death of her father, Roland Maddox. During the trial, thousands of pages of confidential Brown & Williamson documents surfaced and revealed that company officials had known about the dangers of smoking for decades. In one such document, a vice president stated that "nicotine is addictive. We are, then, in the business of selling nicotine, an addictive drug effective in the release of stress mechanisms." The jury found the company liable and noted that it was part of a larger industry-wide conspiracy to defraud the public. The company was ordered to pay the Maddox family $500,000 in compensatory damages. More importantly, the jury found that Brown & Williamson should pay the family $450,000 in punitive damages.

Class Action Suit

In July 1999 a Florida jury found the tobacco industry liable for illnesses of thousands of sick smokers. The suit was brought by pediatrician Howard A. Engle and eight other lead plaintiffs on behalf of approximately five hundred thousand sick smokers and heirs of deceased smokers. The defendants were the five largest U.S. tobacco companies: Philip Morris, R. J. Reynolds, Brown 8¢ Williamson, Lorillard, and Liggett. In addition, two industry organizations, the Council for Tobacco Research and the Tobacco Institute, were named in the suit. In the broadest ruling to date in the legal war against tobacco, the Miami jury concluded that cigarette makers "engaged in extreme and outrageous conduct," concealed the dangers of cigarettes, conspired to hide their addictiveness, and made a product that caused more than a dozen deadly diseases ranging from heart disease to lung cancer. If the verdict is not overturned on appeal, the plaintiffs could be awarded billions of dollars in damages.

Tobacco Victories

While states and individuals won major victories against the tobacco industry, cigarette companies were successful in some cases. They won a major victory in March 1999 when a federal court jury in Ohio ruled against 114 union health funds seeking to recover hundreds of millions of dollars spent to treat sick smokers. Following the lead of states that sued the industry to recover billions in Medicaid funds, the insurers charged that cigarette makers conspired to deceive the public about the dangers and addictiveness of smoking. In 1998 a Florida appeals court reversed a 1996 multi-million judgment against Brown & Williamson on a legal technicality. The appeals court ruled that Carter waited too long to file the suit. The statute of limitations in Florida for this type of civil case is four years. Carter filed suit four years and six days after being diagnosed with a lung disease.