Here are some responses to the efforts in the Florida, North Carolina, Georgia, Virginia and Kentucky Legislatures to enact special protections for the the Tobacco Industry in response to the Engle class action tobacco lawsuit in Florida.
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WASHINGTON, April 12 / U.S. Newswire / -- The American Cancer Society, America's largest voluntary health organization, today condemned efforts to provide special protection to big tobacco. The Society cited moves by legislators in Florida, North Carolina, Georgia, Virginia and Kentucky to shield the tobacco industry from punitive damages in the Engle class action tobacco lawsuit in Florida.
"Punitive damages are intended to punish an individual or entity for their egregious behavior, and prevent them from engaging in that behavior in the future," said John R. Seffrin, Ph.D., chief executive officer for the American Cancer Society. "The American Cancer Society opposes any legislation or measure that would change the rules and grant special legal protections to the same tobacco companies that have been found guilty of deceiving the public about the dangers of smoking."
The Engle jury recently awarded plaintiffs $12.7 million in damages in the compensatory phases of the trial. The jury had already decided that the tobacco companies were guilty of deceiving the public about the addictive and harmful effects of cigarettes.
"While we are pleased with the jury's compensatory damages award in this case, we will be keeping a close eye on the next phase of the trial," added Dr. Seffrin. "The tobacco industry's extreme and outrageous behavior has compromised the health of millions of Americans. The Supreme Court recently concluded that while the FDA does not currently have the authority to regulate tobacco products, tobacco use among children 'poses perhaps the greatest public health risk in America.' Until Congress acts, the courts are the only recourse available to keep the tobacco industry's behavior in check."
Tobacco use is the number one preventable cause of death in America, killing nearly 430,000 people each year. Thirty percent of all cancer cases are attributable to tobacco use. More than $50 billion is spent in health care costs each year to treat smokers suffering from cardiovascular disease, cancer and lung disease and other related ailments.
Dear Governor Bush:
We are writing to you to express our concern over proposals that have been proffered by a number of public officials that would provide protections to the tobacco industry in the Engle class action tobacco suit.
We realize that the state of Florida benefits financially from the annual tobacco settlement payments. However, the tobacco industry has been found guilty in a court of law and the courts should be allowed to handle this phase without interference from the legislature. Enclosed is our position, which addresses our concerns regarding proposals to protect the tobacco industry. We would be deeply disappointed if the Florida Legislature enacted new legislation to deny victims their rights and at the same time grant additional rights to those that have already been found guilty of wrong doing.
The proposals to protect the tobacco industry are predicated on exaggerated fears of tobacco industry bankruptcy. Many groups and organizations have already attested to the fact that it is extremely unlikely that the tobacco industry will go bankrupt. Tobacco analysts on Wall Street, the plaintiff attorneys in the Engle suit, and health groups have all said that tobacco industry bankruptcy is very unlikely. In fact, tobacco industry representatives have stated publicly that they do not fear bankruptcy. We have also enclosed some information that addresses the unfounded fears of tobacco industry bankruptcy.
The tobacco industry has obviously been fueling concerns about bankruptcy. Their motivation is obviously to reduce the amount of the appeal bond they may have to post and to significantly reduce and delay any punitive damage award that may be handed down.
Governor Bush, we hope you will keep our concerns in mind. We respectfully ask you to veto any legislation that comes to your desk that would in any way intervene in the Engle class action tobacco suit.
Sincerely,
Position of the Tri-Agency Coalition on Smoking OR Health on legislation and proposals that affect the punitive damage stage of the Engle class action tobacco suit
The Tri-Agency Coalition is opposed to any legislation or proposal that would in any way limit or prevent the Engle class action tobacco suit from proceeding expeditiously to the punitive damage stage. Florida's Legislature should not be pushing for special protections that would shelter the tobacco industry, but should instead focus on protecting the health of their citizens from the predatory practices of Big Tobacco. The Engle case should continue without the burden of any new legislation that would only delay or impede due process for the victims of the tobacco industry.
The Engle class action lawsuit is the first of its kind to ever go to trial. The lawsuit was first filed in 1994 on behalf of an estimated 500,000 sick Florida smokers. The jury has already decided that the tobacco companies are guilty of deceiving the public about the addictive and harmful effects of cigarettes and has awarded the plaintiffs $12.7 million in compensatory damages. The jury will decide on punitive damages in the next phase of the trial.
The plaintiff attorneys in the Engle case have stated that they have no intention of requesting punitive damages that could bankrupt the industry. In fact, Florida law does not permit them to do so. Punitive damages are to punish and deter, not to bankrupt.
The purpose of punitive damages is to punish an individual or entity for their egregious behavior, and to try to prevent them from engaging in that behavior in the future. Since the Supreme Court recently decided that the FDA does not have the authority to regulate tobacco products, the courts are the only recourse available to keep the tobacco industry's behavior in check.
We now know that the tobacco industry deceived the public about the dangers of smoking, hid research results, and aggressively marketed their product to children. The tobacco industry's extreme and outrageous behavior has compromised the health of millions of Americans.
Tobacco use is the number one preventable cause of death in Florida, killing nearly 30,000 people in Florida each year. More than $4.6 billion is spent in health care costs each year in Florida to treat smokers suffering from cardiovascular disease, stroke, cancer, lung disease, and other related ailments.
That was the reaction from public health advocates, legal analysts and sick smokers last week to the news that state legislators are discussing measures that would shield the tobacco industry from a possibly huge punitive verdict in a precedent-setting class-action case.
As a result of that case, for the first time sick smokers could receive money directly from the cigarette companies to pay for medical bills, lost wages, and pain and suffering. But legislators are worried that a judgment to the sick smokers could jeopardize money the state's already getting from tobacco companies.
State leaders worked long and hard in 1997 to make their own settlement with the tobacco industry. Under that settlement, the industry is putting $13 billion into state coffers, through multimillion dollar payments each year. About $40 million of that money is being used each year to fund youth anti-smoking programs, and the rest is used for general purposes.
Many are opposed to the Legislature doing anything that would affect smokers' chances of getting money from the industry that made them sick.
"Florida's Legislature should not be pushing for special protections that would shelter the tobacco industry but should instead focus on protecting the health of their citizens from the predatory practices of Big Tobacco," the leaders of the state chapters of the American Cancer Society, the American Lung Association and the American Heart Association stated in a joint letter sent to Gov. Jeb Bush on Wednesday.
The class-action trial in Miami "should continue without the burden of any new legislation that would only delay or impede due process for the victims of the tobacco industry," the letter states.
Early last week, a special legislative committee was considering which of several proposed measures it might enact to safeguard the money it's getting from the industry. By Thursday evening, it appeared the special committee had narrowed its options to:
Putting a $50 million cap on the amount the tobacco companies would have to post as a bond before they could appeal a punitive verdict in the class-action case.
Creating a contingency tax that could be added to the cost of a pack of cigarettes should the tobacco companies go bankrupt.
The legislators, after comments from the tobacco companies, said they fear the jury in the class-action case may award sick smokers more than $100 billion and as much as $300 billion in punitive damages. Such an amount could be ruinous to the industry, one tobacco attorney has said repeatedly.
Under state law, the tobacco companies would have to post a bond equal to about 120 percent of the verdict before they could proceed with their appeals.
Four other states where cigarettes are produced passed similar bond limits within the past month.
"If we don't do something here, we are gambling with something that the state and our people are counting on," Senate Republican leader Jack Latvala, of Palm Harbor, said in support of a measure to protect the tobacco industry from a huge verdict. "At the very minimum, we have to look at something in the area of a bond limitation."
But that sentiment was losing steam late in the week. Several legislators cast doubt on the prospect of a $300 billion verdict, estimating it would more likely be in the tens of billions, which they think the tobacco industry would be able to absorb.
"I don't see the whole sky falling in on the state of Florida with this verdict," said Sen. Walter Campbell, D-Tamarac.
Under a 1997 court settlement with Florida to reimburse Medicare for past treatment of sick smokers, the tobacco industry agreed to pay the state $13 billion over 30 years.
Unlike the class-action case, none of that money would go directly to any of the Floridians who smoked for years and now suffer from lung cancer, emphysema or any of the more than 20 ailments the jury in Miami-Dade Circuit Court ruled last year are caused by smoking.
That jury on April 7 ordered the tobacco companies to pay $12.7 million to three former smokers with cancer, who represent the entire class, as reimbursement for their medical bills and pain and suffering.
In four weeks, the same six jurors will be asked to determine how much the tobacco companies should pay the entire class of ailing Florida cigarette smokers as punishment for producing and selling them a dangerous product and lying to them about its health risks. That phase is to begin on May 15.
News that the Legislature was considering a measure that could affect the class-action case in Miami became public on March 27, then Attorney General Bob Butterworth, in response to questions from legislators, gave a written legal opinion outlining what action lawmakers could take in connection with the case.
Butterworth's opinion, which could further separate sick smokers from any payout from the tobacco companies, was a change for the attorney general, who was a key player in the state's 1997 tobacco settlement.
A spokesman for Butterworth said the attorney general was only answering legal questions for the Legislature and was not proposing new legislation.
Butterworth did not respond to a request for comment from the Sun-Sentinel.
"Attorney General Butterworth has been a fighter against tobacco- related disease since the very beginning. I'm sure that it was with a heavy heart that he would do anything to protect the cigarette industry," said Woody Wilner, a Jacksonville lawyer whose firm has won cases against the industry in the lower courts and is fighting them in appellate courts.
"I guess he feels Florida's interest overrides consumer interest in this class-action case," Wilner said. "It is pretty hard for the state to say the state's money is more important than the money of the sick people in the class action."
"This is classic, irony and hypocrisy," said Dr. Elizabeth Whelan, president of the American Council on Science and Health. "It's like saving your cash cow. Basically the settlement ... is just a check to the state of Florida that they can use to build highways with or build schools, although it is supposed to be earmarked for anti-smoking efforts."
"This whole thing is a big money grab with cigarette companies as a source of revenue to be milked, and public health be damned," she said.Analysts questioned the need to protect the industry from bankruptcy by capping the bond amount.
"All this talk of bankruptcy is just a red herring," said Stanton Glantz, a professor in the cardiology department at the University of California at San Francisco Medical School, who has researched and written about tobacco cases throughout the country. It is a scare tactic by companies, he said.
Leaders of the cancer society and lung and heart associations point out that Steven Parrish, a senior vice president for Philip Morris, said on national television on March 26 that the company has no intention of going bankrupt.
Stock for Philip Morris, the world's largest tobacco company, was trading at just more than $21 a share on Friday afternoon, down from when the Miami class-action trial started.
Philip Morris paid its shareholders $4.5 billion in dividends last year. And the company's profits increased $4 billion to $19.5 billion last year.
"The cigarette companies have been whining too much to try and get favorable legislation, and there are a few things they haven't told everyone," Wilner said.
"As I read the law, they don't have to post bond equal to the judgment plus 20 percent. They can go directly to the trial judge and ask for it to be reduced, and the judge can do it," he said.
"The trial judge has discretion to reduce the punitive award, as well. By law, the punitive award cannot cause bankruptcy," he said. "Whether the Legislature has to go beyond that and say it again, I don't see the reason for it."
The reason, said John Coale, a Washington, D.C.-based lawyer waiting to bring a class-action case against tobacco, is that Circuit Court Judge Robert Kaye would probably not lower the bond to the $50 million legislators are considering.
Several legal analysts questioned what incentive that would leave the tobacco industry to resolve the class-action lawsuit.
"The way the system works is that people, or companies, have to be punished if they behave badly. That is why there are punitive awards. If you are not punished, you will continue behaving badly," said Whelan of the science council.
Even if the smokers appeal the bond limit, it gives tobacco companies time, several legal analysts say. And time and money are things the sick smokers do not have.
Whelan asked why assistance was not offered to companies involved in other large class-action cases, such as Dow Corning for manufacturing breast implants and asbestos-producer Johns Manville.
"Cigarettes are not just a legal product, they're supralegal, meaning they are above the law and they have special pieces of legislation created for them," said Whelan. "It's horrifying to hear that not only are (legislators) trying to protect the tobacco industry, ... but the reason they're saying they want to do it is so that they can continue to get tobacco money so that Florida children will get anti-smoking messages. So we have to keep a killer industry in business, killing people, so they can make money and keep sending us money?"
"I don't think Stephen King could spin a yarn as horrible as this."
Staff Writer John Kennedy contributed to this story.
Terri Somers can be reached at tsomers@sun-sentinel.com or 954-356-4849.