The Tobacco Cases

June 13, 2016

TAKING ON BIG TOBACCO

By Allison Torres Burtka

Do you remember Joe Camel and the Marlboro Man? Cigarette manufacturers don’t use them in their ads anymore, because a series of lawsuits beginning in the 1980s have succeeded in holding Big Tobacco companies accountable for their dangerous products and in making them change some of their practices.

These cases have reduced cigarette consumption, shed light on the dangers of smoking and on the tobacco manufacturers’ conspiracy to deceive the public, reimbursed states for the cost of treating injured and dying smokers, and funded antismoking programs, among other accomplishments. “Clearly, hundreds of thousands of lives have been saved” because of this litigation, said Richard Daynard, chair of the Tobacco Products Liability Project, part of the Public Health Advocacy Institute at the Northeastern University School of Law.

CIPOLLONE CASE

The plaintiff in Cipollone v. Liggett Group was Rose Cipollone, who began smoking in 1942, when she was 16 years old. Shortly before she died of lung cancer in 1984 at the age of 58, her husband sued the company that manufactured the cigarettes she smoked.

In 1988, a jury in New Jersey awarded Cipollone’s husband $400,000. The jurors found that, before 1966, the company had failed to warn of the health risks of smoking its products. (After 1966, cigarette packages included a federally required health warning that smoking cigarettes may be hazardous to health, and the court in Cipollone made a pre-trial ruling that the warning labels placed on cigarettes in 1966 prevented common law claims for injuries related to smoking after that date.) The jury also found that the company’s cigarette advertisements constituted an express warranty that its cigarettes were safe, and the company had breached that warranty.

Although the verdict was reversed on appeal in 1992 (the appellate court held that that certain federal laws governed in place of state laws), the case was important because, although smokers had attempted to hold tobacco companies liable for their smoking-related injuries for more than 30 years, this was the first time a smoker had won a trial. Also, this was the first case in which internal tobacco company documents were produced to show that tobacco companies knew of the dangers of cigarettes well before the Surgeon General warned the public in 1964—and that tobacco companies had conspired to conceal these documents, and keep the public from learning about the health hazards of smoking.

Public perceptions of the health risks of smoking reached a turning point in the 1990s, Daynard noted. Led by Rep. Henry Waxman (D-Calif.), the House Energy and Commerce Committee’s Subcommittee on Health and the Environment was investigating the dangers of tobacco. In one of its hearings in 1994, the CEOs of the seven largest tobacco companies testified that they did not believe nicotine was addictive. Not long after that, internal documents from tobacco manufacturer Brown & Williamson Tobacco Corp.—documents that had been smuggled out by a paralegal and brought to Waxman—showed that the CEOs’ testimony was a lie.

Before this shift in public perception, people may have believed a controversy still existed about the dangers of smoking—because the Surgeon General and the tobacco executives were saying different things. Many smokers “said they’d keep smoking until the science was settled,” Daynard said, but it was harder to deny the harmful effects of smoking after that.

MASTER SETTLEMENT AGREEMENT

With common law claims for post-1966 smoking preempted by the Cipollone court’s ruling, the attorneys general of 46 states, the District of Columbia, and other jurisdictions took a different approach to hold tobacco companies accountable for health problems caused by smoking. They sued the manufacturers to get reimbursed for the costs that their states’ taxpayers incurred in caring for citizens suffering from chronic, smoking-related illnesses.

The states hired private, non-government lawyers to handle the litigation and to fund the expenses of the litigation—and to assume the costs if the litigation was unsuccessful. In 1998, the five major tobacco companies reached the so-called “master settlement agreement”—an agreement with the states’ attorneys general to settle the litigation for what was estimated to be $206 billion for the first 25 years. The results of this litigation were very important because:

As in the Cipollone case, the lawyers uncovered internal tobacco company documents that exposed corporate deception and cover-ups about addiction and nicotine manipulation.

The tobacco reimbursement lawsuits resulted in the largest redistribution of the costs of corporate wrongdoing in American legal history.

The settlement forced the tobacco companies to change their advertising and marketing campaigns. They had to stop using billboards, merchandise branding (such as t-shirts with logos), and Joe Camel ads, which had been criticized for targeting young people.

Daynard said the settlement “produced a dramatic drop in cigarette consumption, particularly with kids, who have less money in their pocket.” Also, the wide dissemination of tens of millions of pages of internal company documents “made a tremendous difference in public perception,” and that, in turn, meant the tobacco companies “lost their legislative cover,” he said.

FLORIDA CASES

Separate from the master settlement agreement, four states—Florida, Minnesota, Mississippi, and Texas—settled with the tobacco companies in similar cases. Those settlements and the master settlement agreement together amounted to $246 billion. “At the time, the tobacco industry had never lost” in more than 800 cases, said C. Steven Yerrid, who was part of the team of private lawyers representing Florida.

In 1997, Florida settled with the tobacco companies for $11.3 billion. Like the master settlement agreement, Florida’s settlement forced changes in the manufacturers’ advertising and marketing. These changes included a ban on billboard ads, outdoor ads on sporting arenas and mass transit, and cigarette vending machines that children could access. Florida’s governor at the time, Lawton Chiles, called the settlement “the straw that broke Joe Camel’s back.”

The litigation disclosed the manufacturers’ knowledge of nicotine’s addictive properties, as well as its efforts to appeal to preteens “before they could make decisions as adults,” Yerrid said. Their approach was: “Hook kids at 12 years of age, and they’d be hooked for life,” he said.

“We were able to give back—in a meaningful way—a healthier America and more responsible cigarette manufacturers,” Yerrid said.

While the plaintiffs in these cases were the states seeking to recoup costs incurred because of tobacco-related injuries, injured smokers and their survivors were also suing the tobacco companies. In 1994, in Engle v. Liggett Group, a group of plaintiffs filed a class action lawsuit against the manufacturers, and a jury awarded them $12.7 million in compensatory damages—as well as $145 billion in punitive damages. In 2006, the Florida Supreme Court threw out the punitive damages award and decertified the class of plaintiffs. But it allowed them to proceed with their cases individually, using what had already been determined in the case about the tobacco companies’ liability.

Those individual cases, called the Engle progeny, are still being tried in the courts. Daynard estimates that plaintiffs are prevailing in two-thirds of them. He noted that many cases against the tobacco companies are currently active in Florida and Massachusetts.

The effect of the tobacco litigation can’t be overstated, consumer advocates say. The litigation caused a sea change, and it “showed how effective our tort system could be,” Yerrid said. “It was up to the trial lawyers—regulation didn’t work.”