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(Bloomberg Businessweek) -- Cote v. Philip Morris USA
Case No. 15-15633
① THE ORIGIN
Remember the tobacco wars of the 1990s? Among the many lawsuits aimed at bringing down Big Tobacco was a class action, Engle v. Liggett Group Inc., filed in Florida in 1994. Six years later, finding that the tobacco companies had hidden the deadly nature of cigarettes, a jury awarded the plaintiffs $145 billion in punitive damages. Alas, six years after that, the Florida Supreme Court reversed that award and decertified the class. End of litigation, right? Not so fast …
② THE TWIST
In its ruling, the court said the Engle plaintiffs could still bring individual suits. And to make things a little more palatable for the smokers and their families, who’d waited through 12 years of trial and appeal, it ruled that the evidence of negligence and other bad conduct by the tobacco companies unearthed during the Engle litigation could be assumed to be true in any subsequent trial. With the deck thus stacked in their favor, thousands of former Engle plaintiffs filed suit. Judith Berger was one of them.
③ THE LAWSUIT
Berger started smoking in 1959, when she was 14, and received a diagnosis of pulmonary disease when she was 54. During her 2014 trial, she admitted that Philip Morris USA’s “misrepresentations about the hazards of cigarettes” weren’t a factor in her decision to smoke. Nonetheless, the jury awarded her $27 million, $20 million of it in punitive damages.
④ THE RESULT
The district court judge quickly tossed the punitive damages, noting that Philip Morris could hardly be held responsible for misleading a smoker who testified she hadn’t been misled. But a federal appeals court overturned the district court. Why? Because Berger had once been an Engle plaintiff, and therefore the tobacco company’s bad conduct was a given. (Berger died in 2017. The appeal was brought by Bernard Cote, who represents her estate.) Jurors could simply assume she didn’t know the health effects of smoking. Thus, on Jan. 17, the district court restored the $20 million.
● ONLY IN FLORIDA
The Florida suits are the last big litigation against Big Tobacco. Only the “Engle progeny,” as they’re known, can still bring suits with a good chance of winning. But their suits aren’t stopping anytime soon: There are still 3,000 to 4,000 plaintiffs waiting for their turn in court.
● BURNING CASH
How much is all this costing tobacco companies? It’s not going to break them, but it’s not peanuts, either. Altria Group Inc., Philip Morris’s parent company, spends $50 million to $100 million a year on the cases. The company told me it plans to keep fighting them for as long as it takes. Good luck.
—Nocera is a business columnist for Bloomberg Opinion.
To contact the editor responsible for this story: Jillian Goodman at email@example.com
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