Tobacco Firms Face Judicial Juggernaut
BATTLE OVER NEW EVIDENCE
The nation's major cigarette-makers are about to enter a legal gantlet unprecedented in the history of the $50 billion tobacco industry.
Tobacco firms face seven different trials between now and September, several of which present the possibility of multibillion-dollar damage awards if they lose.
The first trial begins April 7 in Jacksonville, Fla. Two others, both major class-action suits, are set to begin on June 2: one in Miami and one in Jackson, Miss.
Some analysts say the concentration of cases could bring the industry to its knees as early as this fall. Others say Big Tobacco's deep pockets - and the large population of habitual smokers - will ensure an expensive, drawn-out legal battle waged in courthouses across the nation for years to come.
"These guys are tenacious and ruthless, and have unlimited amounts of money," says John Banzhaf, director of the antismoking group Action on Smoking and Health in Washington.
In a recent press statement, the tobacco industry repeated its long-held position: "Smoking is a personal choice, and so is quitting."
The industry's prospects in court took a big hit last week when the fifth-largest tobacco company, Liggett Group, Inc., defected to the other side. In a civil version of a plea agreement, Liggett pledged to testify and provide incriminating documents to help anti-tobacco lawyers win their cases.
For years, the tobacco industry won case after case in court by emphasizing that smokers accepted health and other risks when they chose to start smoking.
But the tide of public opinion started to turn in 1994 with disclosures suggesting that tobacco executives knew 30 to 40 years ago that nicotine was addictive and that smoking caused serious illnesses but continued to aggressively market their products. In some cases they sought to cover up the addictive and health risks, according to tobacco company documents disclosed in several court cases.
Tobacco firms have denied such charges.
Liggett's cooperation is expected by state attorneys general to include testimony by company executives and lawyers that the firm participated in industry-wide fraud and conspiracy dating from the 1960s. Their testimony is expected to include admissions that the industry targeted teenagers as young as 14.
Overall, about 300 legal cases are pending against the major tobacco companies. In addition to Liggett, the major firms are: Philip Morris, R.J. Reynolds, Brown & Williamson, and Lorillard.
The civil cases include both class-action and individual suits seeking damages for longtime smokers or their survivors. Suits have also been filed by the attorneys general in 22 states seeking to recover hundreds of millions of dollars in state Medicaid payments used to treat smoking-related illnesses.
In addition, the US Justice Department is conducting a criminal investigation into whether tobacco firms withheld information and lied to federal agencies. Agents are also examining whether the executives of the major tobacco companies committed perjury when they testified to Congress in 1994 that nicotine is not addictive.
The Liggett cooperation agreement came as part of the lawsuits filed by the attorneys general. Several of them liken the cooperation agreement to plea bargains often offered to low-level drug dealers who agree to testify against their bosses in exchange for lighter sentences. The idea, they say, is to use the so-called little fish to catch the big ones.
Liggett's business accounts for roughly 2 percent of the tobacco market. The other four firms handle 98 percent.
Legal experts and attorneys involved in tobacco suits say Lig-gett's cooperation could be extremely significant. Most of the pending suits have been fueled in part by a flood of incriminating documents from individual tobacco companies. But until the Liggett cooperation, not a single page had ever been disclosed proving an industry-wide conspiracy.
Anti-tobacco activists believe that may soon change.
Liggett is offering, as part of the cooperation, to turn over to the attorneys general 25 to 30 documents generated by a committee comprising the top lawyers for each tobacco company. The lawyers met regularly to discuss the most sensitive aspects of the tobacco industry, including how to avoid litigation and win lawsuits.
"Those documents are likely to be the most damaging to the industry," says Mr. Banzhaf. "As a general rule, when you have [incriminating] things in your files you try to keep them in your attorney's files so they will be privileged."
To block the release of the documents, the tobacco industry filed suit against Liggett to force it to honor the confidentiality of the so-called Committee of Counsel. Tobacco lawyers persuaded a North Carolina judge last Thursday to order Liggett not to release the documents. They say the papers are protected under attorney-client privilege. "We think we are as entitled to [attorney-client privilege] as any other defendant in any other case, whether a private citizen or corporate citizen," says Nat Walker, a spokesman at R.J. Reynolds.
State attorneys general, led by Mississippi attorney general Mike Moore, say they already have the Liggett documents and will present them to judges in their own states to determine whether the documents may be used as evidence against the tobacco industry.
Anti-tobacco lawyers say there is a long-recognized exception to the attorney-client privilege. "If a threshold showing can be made that fraud has been perpetrated or a crime has been committed, then the attorney-client privilege is abrogated," says Graham Kelder with the Tobacco Products Liability Project at Northeastern University School of Law in Boston.
In effect, it would permit anti-tobacco lawyers to use the tobacco industry's own lawyers against them. Some legal experts suggest it raises basic questions of fairness. But others say there is no legal right for an attorney to participate in fraud and crime.
* On April 7, a Jacksonville, Fla., jury will be asked to hold R.J. Reynolds responsible for the death of a Jacksonville woman who began smoking when she was 15. The jury will also consider punitive damages.
* On June 2, attorneys for the state of Mississippi will ask a Jackson jury to order major tobacco firms to pay $940 million as compensation to the state for Medicaid payments made to treat smoking-related illnesses.
* Also on June 2, an attorney will ask a Miami jury to make the tobacco industry compensate 60,000 flight attendants who say they have suffered illnesses as a result of exposure to second-hand smoke on airlines.
* On Aug. 4, Florida will ask a jury in West Palm Beach to order major tobacco companies to pay $1 billion in compensation for smoking-related Medicaid costs paid by the state.
* Also in August, an attorney will ask a Jacksonville jury to order R.J. Reynolds to compensate a Jacksonville woman who smoked for 40 years and is now diagnosed with lung cancer.
* On Sept. 8, an attorney will ask a Miami jury to order major tobacco companies to compensate an estimated 400,000 Florida smokers who are believed to have suffered or died as a result of nicotine addiction.
* In September, Texas will ask a jury in Texarkana to order major tobacco firms to compensate the state for hundreds of millions of dollars spent in smoking-related Medicaid costs.