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The largest verdict for a single plaintiff in U.S. history — a $28 billion punitive award against Philip Morris in Los Angeles — is being called a forerunner of judgments to come by the plaintiff’s attorney who won it and an aberration that will be rectified on appeal by attorneys for the tobacco industry. “This is the harbinger of very, very bad news for the tobacco industry,” says Michael J. Piuze, of Los Angeles’ Law Offices of Michael J. Piuze, plaintiff’s counsel in the case that resulted in the $28 billion verdict, as well as in the case yielding a $3 billion verdict against Philip Morris in 2001. “The anti-smoking culture is gaining hold in the country.” “It’s a very big verdict and a very big headline,” counters William Ohlemeyer, vice president and associate general counsel of Philip Morris. “But as a matter of law, it’s illegal, emotional and irrational,” Ohlemeyer says. “This verdict is so obviously the result of passion and prejudice that it has to be set aside.” Plaintiffs’ lawyers agree that this latest verdict will be cut back drastically, but don’t agree that the amount awarded is evidence of an unreasonable jury, says Charles S. Tauman of Portland, Ore.’s Bennett, Harman, Morris & Kaplan, who won a $150 million punitive judgment against Philip Morris in March. “The tobacco companies have never accepted any responsibility at all. They’ve never apologized and never will,” he says. “That’s the reason these verdicts have gotten larger and seem to grow bigger by quantum leaps.” MORE SUITS COMING Whatever the ultimate outcome of this particular lawsuit, the verdict, coming in the wake of several other recent judgments against the industry, is expected by plaintiffs’ attorneys to spur a rise in lawsuits. “This verdict is going to encourage plaintiffs’ lawyers to bring new suits,” says Steven Hunter of Miami’s Angones, Hunter, McClure, Lynch & Williams, who won a $37 million verdict in a smoking case earlier this year, as well as a $5 million verdict in a secondhand-smoke trial. After each of those verdicts, he was contacted by potential plaintiffs and other lawyers to determine the advisability of bringing their own lawsuits. “Every time there is a verdict like this — not that there has ever really been a verdict like this — plaintiffs’ lawyers we’ve never heard from before call us or send e-mails,” says Mark Gottlieb, an attorney with the Tobacco Products Liability Project. In the days since the $28 billion verdict was awarded, he explains, the number of visitors to the project’s Web site has tripled to 2,154 per day. As another indication of the increase in interest, over the past few months several hundred lawyers, most of whom had previously been uninvolved in tobacco litigation, have acquired a plaintiffs’ litigation CD called “Tobacco Trial in a Box,” prepared by Piuze. Piuze developed the primer after he won a $3 billion verdict in 2001 against Philip Morris for a man who was diagnosed with lung cancer following 40 years of smoking Marlboros. The kit includes tobacco industry documents, evidence admitted in previous trials, pre-trial motions, defense motions and more. That plaintiff, Richard Boeken, died soon after the verdict. The CD includes tobacco company documents, briefs, motions filed and details on evidence. Boeken v. Philip Morris Inc., No. BC 226593 (Los Angeles Co., Calif., Super. Ct.). This spring, the Tobacco Products Liability Project placed “Trial in a Box” on the project’s Web site. Since then, more than 1,200 plaintiffs, lawyers and others have viewed the primer on the Web site, including 335 since Oct. 1. “The vast majority of those have been since Oct. 4,” says Gottlieb. Piuze is currently updating the “Trial in a Box” CD, to include the details from the most recent trial. 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.” The number of attorneys actively involved in such litigation has also increased, adds Tauman. In 1998, the Tobacco Trial Lawyers Association started with 10 charter members. “Now we have more than 60 lawyers with cases.” 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 the Philip Morris brands Marlboro and Benson & Hedges and sued Philip Morris, 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. Piuze followed the strategy established in his previous win against Philip Morris, using documents from the industry to assert that tobacco company personnel disputed scientific studies linking tobacco use to cancer, despite knowledge of the dangers of smoking, in order to preserve the market. But after the win in Boeken, a California Supreme Court decision forced a change in the evidence used. In 1988, the California Legislature had passed a law prohibiting smokers from filing products liability actions against tobacco companies. This law was repealed so the California attorney general could join the lawsuit against the tobacco industry. When immunity ended in 1998, this reopened the path to litigation for individual plaintiffs. The tobacco industry maintained that these individuals were still blocked because the repeal was not retroactive. The industry contended that only smokers who began smoking after 1998 could sue. In August, the California Supreme Court rejected this, but did bar evidence of alleged wrongdoing during the period the law was in effect. As a result, Piuze says, he could not place into evidence the appearance by seven tobacco industry executives at a congressional hearing in 1993, where each testified “that tobacco doesn’t cause cancer and that it’s not addictive.” In this trial, he says, he used other documents to prove the plaintiff’s contention of fraud. One such document was an internal Philip Morris memo written three weeks after the 1964 release of the surgeon general’s report linking smoking to lung cancer. In the segment of the memo on the company’s prospective public relations response to the report, Piuze pointed out to the jury, the author advises “we must in the near future provide some answers which will give smokers a psychological crutch and a self-rationale to continue smoking.” Piuze also used the March 1998 testimony of Geoffrey Bible, then chairman and chief executive officer of Philip Morris. Bible had been asked, he reported to the jury, “Do you know how many people have died as a result of smoking?” Bible had answered, “I don’t know if anybody has died.” In answering another question, Bible had asserted, “I do not believe that cigarette smoking causes cancer.” This was evidence, Piuze told the jury, of an ongoing effort to commit fraud. On Sept. 26, the Los Angeles jury awarded Bullock $650,000 in compensatory damages, then added $28 billion in punitives on Oct. 4. Bullock v. Philip Morris Inc., No. BC 249 171 (Los Angeles Co., Calif., Super. Ct.). Philip Morris will be filing motions to set aside or reduce the verdict. DID JURORS IGNORE THE LAW? The verdict was both “an aberration and a California verdict,” says defense counsel Peter Bleakley of Washington, D.C.’s Arnold & Porter. “The plaintiff’s attorney invited the jurors to ignore the law.” The court had determined that Philip Morris could not be punished for making and selling cigarettes and that the jury could not find for the plaintiff on the fraud count, unless the plaintiff proved reasonable reliance, he says. The defense contended the plaintiff chose to smoke, despite warnings, and that she never proved she relied on any statements of Philip Morris personnel. In post-trial interviews, 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.” The success in Los Angeles courts, as evidenced by this and the Boeken verdicts, he contends, is not transferable to most other jurisdictions. “I don’t expect it to spread beyond California and Oregon,” Ohlemeyer says. “Most people believe that smokers were warned and assumed the risk. There are a lot of places where people are not as willing to overlook the law.” “This is not geography, but their own history,” says Sweda. “They can’t escape the looming presence of their own past.” “The tide has turned, even in the heartland,” says Tauman, who points to recent substantial verdicts in Kansas, Florida and Puerto Rico, as well as Oregon and California. But plaintiffs’ attorneys already involved in these lawsuits advise that the litigation is risky and expensive. “The tobacco companies still fight every case as if the entire industry depended on it,” says Kenneth B. McClain of Kansas City, Mo.’s Humphrey, Farrington & McClain, who won a $15 million punitive judgment in Kansas against R.J. Reynolds in June. Burton v. R.J. Reynolds Tobacco Co. (D. Kan.). “If you’re faced with the prospect of a trial and an appeal, plus full-blown motion practice, you can spend a whole lot of money. In Burton alone, we spent 10,000 hours and half a million dollars.” The case has been pending for more than eight years and is still nowhere near resolution, he notes. REVERSAL RISK DAUNTING The risks of reversal after winning a verdict are also daunting, says McClain. “Quite a bit of mischief can be done by hostile courts of appeal.” Courts will look at substantial punitive awards, he says, and throw them out, finding that the size itself indicates there was a runaway jury. “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,” McClain notes. “The plaintiffs’ lawyers abandoned them, or they got dismissed by trial judges because the law didn’t support them.” Of the total cases tried, the defense has won eight out of 10; since 1996, that ratio has dropped to seven out of 10. But, so far, the industry has paid only one judgment following a trial, for $1.09 million. This followed the unsuccessful appeal of a verdict against Brown & Williamson. And attorneys for the tobacco industry 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.”

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