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The $28 billion verdict against Philip Morris USA last October — the largest ever for a single plaintiff — was so big that a lot of people thought it had to be million rather than billion. It turned out that the judge agreed with them. Two months later, he reduced it to $28 million. Still, it was a big year for tobacco verdicts and a big year across the board, according to The National Law Journal‘s survey of the 100 largest verdicts in 2002. This year’s dollar total for the list was nearly 3 1/2 times larger than last year’s. Bullock v. Philip Morris easily led the way, and two additional tobacco verdicts also made the list. Schwarz v. Philip Morris is No. 14, with a $150 million verdict, and Lukacs v. Philip Morris is No. 63, with a $37.5 million award. So, is the tobacco plaintiffs’ bar on a roll? Not in the eyes of William Ohlemeyer, a Philip Morris vice president and associate general counsel. Nationwide, about 150 individual cases filed against his company were dismissed last year alone, he says. And two of the three cases on the NLJ list were almost entirely punitive awards — Lukacs was the all-compensatory exception — and they are routinely reduced by judges, as were Bullock and Schwarz (cut to $100 million). Two are under appeal and a related appeal on the third is pending. Philip Morris has yet to pay a penny to an individual plaintiff. SCORECARDS AND HIGH TIDES Yet a scorecard from the last few years suggests that Big Tobacco has more to worry about than it cares to admit: • West Coast jury verdicts won by individual tobacco plaintiffs: 6; • West Coast jury verdicts won by Big Tobacco: 0; • Consecutive years that a multibillion-dollar tobacco verdict has been No. 1 on the NLJ list: 2; • Verdicts a tobacco company actually paid: 1. To some observers, the last number is the most significant. Carter v. Brown & Williamson pierced the aura of invincibility. The $750,000-plus interest Brown & Williamson Tobacco Co. paid Grady Carter in 2001 was the first and only time a tobacco company has paid an individual tobacco verdict. Richard Daynard, a Northeastern University law professor and long-time Big Tobacco adversary, sees in these developments a turning of the tide. “We’re not going to know how high the tide can go until it’s receding,” says Daynard, who also directs the Tobacco Control Resource Center, a clearinghouse for industry opponents. “But the tide is still rising, and 2002 is a year in which it rose substantially.” What 2002 made clearest, Daynard adds, is that the $206 billion Master Settlement Agreement four tobacco companies signed in 1998 to compensate 46 states for medical costs attributable to smoking did not end the industry’s legal headaches. And recent months have brought new ones. SCANDALS INFLUENCE JURORS “I think 2002 is the beginning of a pendulum swing back toward jurors favoring plaintiffs in these cases, says Art Patterson, senior vice president at Bowne DecisionQuest, the jury consultants. “There was a period where it was swinging more toward individual responsibility,” but Enron and the other corporate scandals have influenced juror attitudes, says Patterson, whose firm consults for tobacco companies. “While in the past a majority of jurors held attitudes of distrust of big corporations,” he says, “we are now finding 70 percent and 80 percent of jurors endorsing attitudes of significant distrust.” Another reason for the recent success is advocates like Daynard and the Web sites he and others maintain. The tobacco companies have long shared information. In recent years, plaintiffs’ lawyers have matched them. “In some respects the plaintiffs’ bar has done a better job working cooperatively and collaboratively than the defense bar,” says Ohlemeyer. One beneficiary is Michael Piuze, Betty Bullock’s lawyer who also represented Richard Boeken, the plaintiff who won the $3 billion verdict against Philip Morris (since reduced to $106 million) that topped the NLJ list for 2001. Piuze and his Law Offices of Michael J. Piuze in Los Angeles had never tried a tobacco case before Boeken. But Madelyn Chaber had. Chaber won the first two tobacco verdicts in California: $51.5 million in Henley v. Philip Morris in 1999 (reduced to $26.5 million) and $21.7 million in Whiteley v. Philip Morris in 2000, both in Superior Court in San Francisco when she was with the now-defunct San Francisco firm Wartnick, Chaber, Harowitz and Tigerman. Chaber had been helped by Norwood “Woody” Wilner of Jacksonville, Fla.’s Spohrer Wilner Maxwell & Matthews — the lawyer who won the Carter case. Wilner had passed boxes of tobacco documents to her and she, in turn, shared boxes with Piuze. She also recommended that he add to his team Holly Hostrop and Ray Goldstein. Hostrop, a solo practitioner in Carlsbad, Calif., handled the pretrial motions and briefs. Goldstein knew the documents. A freelance paralegal, Goldstein has 3,700 documents on his laptop, including depositions, internal company communications and testimony from prior trials, he says. He was able to select for Piuze the documents most relevant to his case, and during the trial he could search by date, keyword, defendant, text or writer and quickly pull what the lawyer needed. More recently, Goldstein has flown around the country from trial to trial. He rarely stays for the duration, he says. He parachutes in to lay the groundwork: He loads his database onto clients’ computers and sets up exhibits. At the conclusion of the Boeken trial, Piuze decided he wanted to share what he’d learned, so with Goldstein’s help, he put together a CD-ROM he calls “Tobacco Trial in a Box.” It’s the high-tech equivalent of the boxes passed from Wilner to Chaber to Piuze. It contains documents from the trial and related material, and he’s made it available free to plaintiffs’ lawyers. Daynard also posted the files on a Web site. Another example of plaintiffs’ lawyer cooperation is the Tobacco Trial Lawyers’ Association. Founded five years ago, what began with 10 lawyers now boasts 60 law firms and more than 100 lawyers as members, according to Charles Tauman of Portland, Ore.’s Bennett, Hartman, Morris & Kaplan, who heads it. Particularly valuable, says Tauman, is the listserv the association hosts. Lawyers can post questions as they prepare a case, or even in midtrial, if they need a document or a quick answer. ‘LIGHT’ CIGARETTES ATTACKED Tauman is also a central player in a new litigation front. He was co-counsel on Schwarz, which was the first time a tobacco company was successfully sued for defrauding the public by marketing “light” cigarettes as a safer alternative. Tauman is now trying to bring a consumer-fraud class action against light-cigarette manufacturers. He’s working with Stephen Sheller of Philadelphia’s Sheller, Ludwig and Badey in an effort to certify classes in a dozen states, aiming to recover the money plaintiffs spent on cigarettes. The first trial began last month in plaintiff-friendly Madison County, Ill. ( Miles v. Philip Morris, No. 00L0112), and classes have been certified in Massachusetts and Florida. So far Philip Morris has beaten back actions in New Jersey, Arizona and Pennsylvania, according to Ohlemeyer. Light cigarettes, he adds, have always carried the same Surgeon General warning as others do, and, in recent months, Philip Morris has attached to its light-cigarette packages disclaimers acknowledging that they are no safer than regular cigarettes. The company argues that assertions to the contrary have come not from tobacco companies but from government agencies. STRATEGY SHIFT But the cases that occupied center stage in 2002 were the individual trials, and none shone brighter than Bullock. During the Boeken trial, Piuze says he was able to turn several Philip Morris witnesses against the company. In Bullock, the company tried a new tack. Known for a “scorched earth” defense strategy, this time Philip Morris’ lawyers aggressively cross-examined only the plaintiff herself and called just one witness. Juror Jose Farinas offers a blunt assessment: “The defense didn’t put on a case. We were shocked.” Ohlemeyer cautions against reading too much into this shift, which had more to do with execution than strategy. “In hindsight,” he says, “we underestimated the jury’s ability to use the evidence that the plaintiff introduced to prove our case.” Maurice Leiter, the company’s lead defense lawyer in Boeken and second chair in Bullock, declines to respond to Farinas. A partner in the Los Angeles office of Washington, D.C.’s Arnold & Porter, Leiter says only: “We did not believe that there was strong evidence that Mrs. Bullock smoked because of anything Philip Morris said or did. And so our goal at trial was to try to focus the jury on the case of this particular plaintiff, and to try to persuade them not to try the case on anger against tobacco companies.” The industry’s defense these days is two-pronged, says Judy Rothschild, a plaintiffs’ jury consultant at National Jury Project West. First is the standard “your mama done told you” defense: The plaintiff knew the risks. The second has been dictated by the release of millions of documents “which have changed the landscape,” Rothschild says. Companies can no longer deny they knew cigarettes were harmful and addictive. Instead, they argue: “That may have been us back then, but that’s not us now. We’ve changed.” Philip Morris’s best defense is probably its old standby — using its resources to fight every inch. “We don’t settle these cases,” declares Ohlemeyer. And though the company lost five trials in 2002, it also won five and is prepared to appeal the others to the Supreme Court. It’s been fighting and appealing since the Rose Cipollone case in the 1980s. Plaintiffs’ lawyers, on the other hand, have spent large sums — with virtually no returns. Boeken cost Piuze about $500,000, he says, and Bullock will cost at least that much by the time the appeals are done. “Tobacco Trial in a Box” may be free, but until a few more verdicts are paid, it may be too expensive for many lawyers to use.

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