Big Tobacco Caught in the Back Draft of its Scorched Earth Litigation Strategy
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Cal WarrinerNovember 20, 2009 9:20 AMBig Tobacco's pants are aflame today after suffering a 300 million dollar verdict in yet another defeat in its Florida litigation war. You see, knowing it has imposed more death and suffering than modern war, pestilence and aids combined, Big Tobacco's mantra has always been millions for defense and not a dime for restitution (and a few extra hundred million thrown in for political payola and advertising). Historically the strategy has worked. The big bully with its army of well healed, silver tongued lawyers could outspend, outmaneuver, and overwhelm wheezing customers and their lawyers. Tire them out, grind them into the dust, argue every issue, appeal every ruling and intimidate lawyers into not taking up the cause. No matter the cost, Big Tobacco had to make suing it so distasteful that smokers would just die and go away quietly. I mean, what would happen if all the sick smokers sued us at once? Right?
Today however, as Phillip Morris arrogantly thumbed its nose at yet another former customer who sat in the courtroom on oxygen, the strategy cost Phillip Morris 300 million dollars. Having once again turned its back on the opportunity to settle for for less than it paid one defense expert, Phillip Morris placed its fate in a gaggle of highly skilled cigarette lawyers from Chicago and San Francisco. The juries verdict, millions for restitution, to hell with your million dollar defense.
You see, the tide has turned in Florida. Instead of unleashing its army and unlimited resources on one poor smoker, Big Tobacco faces almost 8000 filed cases that are all proceeding concurrently. The cases arise from years of class action litigation in which a jury and ultimately the Florida Supreme court finally put an end to decades of Big Tobacco's dismiss, distract, deny and deceive strategy. No longer are Tobacco's slick litigators allowed to come to court ready to contest whether nicotine is addictive or whether it causes lung disease and cancer. Nor can the companies argue that their products were not defective or that they were not guilty of negligence and fraudulently lying to the consuming public about the dangers of cigarette smoking. Remember, as late as 1994 every tobacco company CEO stood before Congress and swore that nicotine was not addictive and that there was no medical proof linking cigarette smoking to cancer. Swallow lye to perpetuate the lie, no problem. Nope, the issue for the jury to decide in Florida is now what it always should have been. Is it the smoker's fault for buying the defendants' product and using it exactly as intended (quite ironic) or is it the product's addictive qualities manipulated so adeptly by Tobacco chemists that resulted in the smoker's disease? For the first time in the history of tobacco litigation, it's a fair fight. Recent history teaches when Big Tobacco can't poke, bite or hit below the belt, it is losing its shirt.
Since members of the now decertified Florida class have been trying their cases against Big Tobacco, the smoker has won eight of ten trials many in the multiple millions of dollars with today's 300 million dollar verdict being the largest. In each case, Tobacco has flatly refused to discuss settlement many times rejecting settlement offers of as little as $10,000. As a result, all of the smoker's litigation costs and attorney's fees are being tacked on to the verdict. Tobacco already faces over fifty trials next year with more being set every day. If past is prologue, the nicotine purveyors are in for disastrous 2010.
As the saying goes, all good things must come to an end. In Florida at least, the courts have put an end to traditional Tobacco defenses. When then will the companies spin to the financial industry about its exposure in Florida tobacco litigation end. The Florida Supreme Court's Engle decision is flawed, this verdict is an aberration; we intend to appeal; we feel good about our chances on appeal; we have plenty of resources to defend ourselves; lawyers will lose interest and Engle cases will just go away like the flight attendant second hand smoke cases did. Hogwash.
With this verdict, it's time that the financial markets woke up smelled the coffee. They need to start asking probing, hard questions. Can an industry that sells an addictive product that has killed millions and continues to kill hundreds of thousands each year cheat the fates indefinitely? Will the American public stand to have its children and its children's children addicted and killed by this evil industry?
Ironically, the litigation strategy that has served Big Tobacco so well for so long has exposed its biggest weakness. Tobacco cases are very winnable. They are even more winnable when filed en masse by just a fraction of its victims. Juries no longer buy Tobaccos' lies. Ironically, for less than the cost of corporate jet fuel, Big Tobacco could have resolved the entire Florida litigation. Now, it must live with the consequences of an archaic philosophy, hatched moons ago by dead men, each made rich by the very cigarettes that ultimately killed them.

