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Michael Piuze, lawyer for smoker. Is luck running out for the tobacco industry? This October, a court in Los Angeles handed out a $28 billion punitive award against Philip Morris Companies Inc. in Los Angeles-the largest verdict for a single plaintiff in U.S. history. The plaintiffs lawyer in the case, Michael Piuze of Los Angeles, calls the verdict “the harbinger of very, very bad news for the tobacco industry.” But Philip Morris’s associate general counsel William Ohlemeyer has a different view. “It’s a very big verdict and a very big headline,” he says, but he adds that “as a matter of law, it’s illegal, emotional, and irrational.” He says that “this verdict is so obviously the result of passion and prejudice that it has to be set aside.” Whatever the ultimate outcome, this verdict might spur a rise in lawsuits. And if more lawsuits are filed, it will continue a trend, notes Edward Sweda, senior attorney with the Tobacco Products Liability Project. “Philip Morris and the other tobacco companies have reported [in 10-K annual reports] that the number of smoking-related cases pending against them has risen from about 600 in 1998 to about 4,500 in 2002.” Not Expected To Live The plaintiff in the most recent trial is Betty Bullock, a 64-year-old woman who was diagnosed with lung cancer in early 2001. The cancer subsequently metastasized to her liver, and she is not expected to live much longer, Piuze says. Bullock smoked Philip Morris brands, and sued the company, charging negligence, fraud, and strict liability. At the heart of the case was the claim that Philip Morris had fraudulently concealed the danger of its product. On September 26, the Los Angeles jury awarded Bullock $650,000 in compensatory damages, then added $28 billion in punitives on October 4. Philip Morris will be filing motions to set aside or reduce the verdict. Emotional Verdict? The verdict was both “an aberration and a California verdict,” says defense counsel Peter Bleakley of Washington, D.C.’s Arnold & Porter. “The plaintiffs attorney invited the jurors to ignore the law.” Bleakley also argues that the court had determined that Philip Morris could not be punished for making and selling cigarettes. He adds that the jury could not find for the plaintiff on the fraud count, unless the plaintiff proved reasonable reliance. In post trial interviews, Philip Morris’s Ohlemeyer says, the jurors said they did not believe that Bullock was unaware of the dangers of smoking, “but they had an overwhelming desire to punish Philip Morris.” He adds that the success in Los Angeles is not transferable to most other jurisdictions: “I don’t expect it to spread beyond California and Oregon.” But Tobacco Products Liability Project’s Sweda counters, “This is not geography, but their own history,” adding, “they can’t escape the looming presence of their own past.” No Easy Breaks For Plaintiffs But litigation is also risky and expensive for the plaintiffs. There are the risks of reversal after winning a verdict, says Kenneth McClain of Kansas City, Missouri’s Humphrey, Farrington & McClain, who won a $15 million punitive judgment against R.J. Reynolds in June. “Quite a bit of mischief can be done by hostile courts of appeal,” he adds. Courts will look at substantial punitive awards, McClain explains, and throw them out, finding that the size itself indicates there was a runaway jury. Lawyers for tobacco companies agree that plaintiffs still face an uphill battle. “In most places,” says Ohlemeyer, “we’re getting defense verdicts.” In addition, “the vast majority of these cases never go to trial. We had 18 cases dismissed last year.” Of the hundreds of cases filed so far, “90 to 95 percent have never gone to trial and were never settled,” he adds. And so far, the industry has paid only one judgment following a trial, for $1.09 million. Attorneys for the tobacco industry also warn that there will be no easy victories. “We’re not going to settle,” says Ohlemeyer. “We have the time, and we have the inclination to let the appellate courts decide what the law is.” The National Law Journal

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