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Tobacco companies hailed last week’s reversal of the landmark, $145 billion punitive damages award to 700,000 Floridians who claimed cigarettes made them ill as the beginning of the end for smokers’ class actions. Plaintiffs’ lawyers and other critics of Big Tobacco said the industry may yet eat its words. Even if the decision by the Florida 3rd District Court of Appeal survives a challenge in the Florida Supreme Court, there are characteristics unique to Ligget Group Inc. v. Engle, No. 3D00-3400, that precludes it from becoming the touchstone for all class actions on behalf of smokers, they assert. Whatever its implications, the May 21 decision by itself represents a major victory for the tobacco companies. The verdict handed down by a jury in 2000 after a two-year trial — $12.7 million in compensatory damages to three lead plaintiffs injured by smoking and a whopping $145 billion in punitive damages to a class of Florida smokers estimated to number 700,000 — was “roughly 18 times the proven net worth” of the companies, according to Judge David M. Gerstein’s opinion for a unanimous three-judge panel. In a press conference on the day the opinion was issued, Philip Morris Associate General Counsel William S. Ohlemeyer argued that the case has a bigger significance. He said it proved that class actions on behalf of smokers are unworkable. He circled back again and again to the biggest remaining thorn in the company’s side, the $10.2 billion judgment in Price v. Philip Morris, No. 00-L-112. In that case, Circuit Court Judge Nicholas G. Byron of Madison County, Ill., ruled in March that the company had misled consumers into believing that Marlboro Lights and Cambridge Lights are less harmful than nonlight cigarettes. Ohlemeyer said that since both Engle and Price were merely variations on the same basic cause of action (fraud), Engle‘s lessons about the unworkability of class actions apply with equal force to Price and should lead to a reversal on appeal. Ohlemeyer’s only source of dissatisfaction was that “It took eight years to do something that often takes a matter of months for other appellate courts,” perhaps betraying a hint of pique that the very same court approved class certification in 1996. Stephen Sheller of Philadelphia’s Sheller, Ludwig & Buckley doesn’t see Engle as a threat to the Price judgment. Sheller is the architect of the light-tobacco litigation strategy that prevailed in the Illinois case. He said that even if Illinois appellate courts look to Florida for guidance, they would find a completely different set of facts. He noted that a major reason the Engle court found class certification unworkable is that each of the 700,000 or so class members would have had to present time-consuming medical testimony about the extent of his or her injuries. Sheller said that that problem did not arise in the Price litigation because the plaintiffs did not claim that they were fraudulently induced into ruining their health (as in the Engle case), but instead that they had bought a product that failed to live up to its promises, regardless of whether their health actually suffered. Sheller added that the Illinois case was more manageable in another respect: Under Illinois consumer fraud law, the plaintiffs did not have to prove that they relied upon Philip Morris misstatements when making the decision to buy light cigarettes, while reliance is something that would have to have been proved with respect to every class member under the common law fraud claims at issue in Engle. Dechert partner Robert C. Heim, who argued the class certification issue before the Florida appellate court, doesn’t think Sheller can dodge the implications of Engle quite so easily. Heim said that the Price judgment cannot stand without individualized judgments about consumer behavior because causation is a necessary element of consumer fraud statutes even when reliance is not. GRAPES AND COCONUTS Steven Tillery of St. Louis’ Carr Korein Tillery, who won the Price judgment using the Sheller pattern, echoed Sheller’s comments about the dissimilarity of the two cases: “It is obviously a totally different case, based on a completely different theory.” Edward L. Sweda, senior attorney for the Tobacco Products Liability Project, said “it’s not just apples and oranges; comparing Engle and Price is like grapes and coconuts.” Sheller doesn’t think that the reasoning in Engle, even if adopted by other courts, will necessarily prevent plaintiffs’ lawyers from bringing class actions in tobacco cases that rely on detailed testimony about the medical condition of individual plaintiffs. Tillery said that there are ways the attorneys in Engle might have made the case more manageable and thus perhaps more palatable to the appellate court. Instead of leveling their sights at several tobacco companies, for instance, they could have focused on one at a time, as was done in Price and other light-cigarette cases. That would have made litigating reliance much simpler, Sheller suggested, since only one company’s advertisements would have been at issue. The Miami husband-and-wife team of Stanley and Susan Rosenblatt, who represented the Engle class, did not return calls asking for comment.

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