$27b verdict against RJ Reynolds

Last updated 15:59 20/07/2014

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A Florida jury has slammed the R.J. Reynolds Tobacco Co. with US$23.6 billion (NZ$27.1b) in punitive damages in a lawsuit filed by the widow of a longtime smoker who died of lung cancer in 1996. 

The case is one of thousands filed in Florida after the state Supreme Court in 2006 tossed out a US$145 billion (NZ$166b) class action verdict. That ruling also said smokers and their families need only prove addiction and that smoking caused their illnesses or deaths. 

Last year, Florida’s highest court re-approved that decision, which made it easier for sick smokers or their survivors to pursue lawsuits against tobacco companies without having to prove to the court again that Big Tobacco knowingly sold dangerous products and hid the hazards of cigarette smoking. 

The damages a Pensacola jury awarded Friday to Cynthia Robinson after a four-week trial come in addition to $16.8 million (NZ$19.3) in compensatory damages. 

Robinson individually sued Reynolds, the  No. 2 U.S. cigarette maker, in 2008 on behalf of her late husband, Michael Johnson Sr. Her attorneys said the punitive damages are the largest of any individual case stemming from the original class action lawsuit. 

‘‘The jury wanted to send a statement that tobacco cannot continue to lie to the American people and the American government about the addictiveness of and the deadly chemicals in their cigarettes,’’ said one of the woman’s attorneys, Christopher Chestnut. 

Reynolds’ vice president and assistant general counsel, J. Jeffery Raborn, called the damages in Robinson’s case ‘‘grossly excessive and impermissible under state and constitutional law.’’ 

‘‘This verdict goes far beyond the realm of reasonableness and fairness, and is completely inconsistent with the evidence presented,’’ Raborn said in a statement. ‘‘We plan to file post-trial motions with the trial court promptly, and are confident that the court will follow the law and not allow this runaway verdict to stand.’’ 

The lawsuit’s goal was to stop tobacco companies from targeting children and young people with their advertising, said Willie Gary, another attorney representing Robinson. 

‘‘If we don’t get a dime, that’s OK, if we can make a difference and save some lives,’’ Gary said. 

In June, the US Supreme Court turned away cigarette manufacturers’ appeals of more than US$70 million ($NZ80m) in court judgments to Florida smokers. Reynolds, Philip Morris USA Inc. and Lorillard Tobacco Co. had wanted the court to review cases in which smokers won large damage awards without having to prove that the companies sold a defective and dangerous product or hid the risks of smoking. 

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The Supreme Court refused to hear another of the companies’ appeals last year, wanting the court to consider overturning a US$2.5 million (NZ$2.9m) Tampa jury verdict in the death of a smoker. 

Other Florida juries have hit tobacco companies with tens of millions of dollars in punitive damages in lawsuits stemming from the original class action lawsuit. 

In August, a Fort Lauderdale jury awarded US$37.5 million (NZ$43m), including US$22.5 million (NZ$26m) in punitive damages against Reynolds, to the family of a smoker who died at age 38 of lung cancer in 1995. 

Attorneys for Reynolds said they would appeal, arguing that the woman knew the dangers of smoking because cigarettes had warning labels when she started. The attorney for the woman’s family said teenagers like her were targeted by tobacco companies. 

Some large jury verdicts awarding tens of millions of dollars in damages to relatives of smokers have been upheld by appeals courts. 

In September, the 3rd District Court of Appeals affirmed US$25 million (NZ$28m) in punitive damages and US$10 million (NZ$11m) in compensatory damages against Lorillard, the country’s No. 3 cigarette maker, for Dorothy Alexander, whose husband died in 1996 of lung cancer. Lorillard, based in Greensboro, North Carolina, unsuccessfully argued the damages were excessive and raised a number of other claims. 

The 1st District Court of Appeals upheld in June 2013 a $20 million (NZ$23m) punitive damage award to another smoker’s widow, more than a year after reversing a US$40.8 million (NZ$46.9m) award in the same case against Reynolds. After the appeals court rejected the first award as excessive the award amount was recalculated. The tobacco company still objected. 

Philip Morris is the United States' biggest tobacco company and owned by Richmond, Virginia-based Altria Group Inc. Reynolds is owned by Winston-Salem, North Carolina-based Reynolds American Inc.

- AP


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