Sunday, July 20, 2014
Big Tobacco and Juries
The other day a Florida jury awarded $23.6 billion in punitive damages to the family of a man who died at the age of 36 of lung cancer. He was said to be a heavy smoker, favoring Kool cigarettes, and the judgment was against R.J. Reynolds Tobacco Co., the manufacturer of the brand.
Florida has become a hot spot for such lawsuits since its Supreme Court threw out a $145 billion jury award in a class action suit filed on behalf of 700,000 smokers in the state. The judges let stand the jury findings that cigarettes cause cancer, that nicotine is addictive and that cigarette manufacturers sold dangerous products.
This left open the option for thousands of individual cases that since have been filed and are working their ways through the state's court system by families and sympathetic lawyers.
The first jury award in such a case was $1 million. The most recent one, the largest so far, is 2,360 percent greater.
The tobacco company has vowed to appeal. In fact almost all these awards will be appealed.
I harbor no affection for tobacco companies. I would not work for one or buy stock in one. If I owned a store, I would not sell cigarettes.
What interests me are several issues in these cases and in juries' intents in their findings.
First, what percentage of the responsibility should the dead man have borne for his decision to smoke?
The link between cigarette smoking and lung cancer was no secret. Scientists established the connection in the 1950s. In 1964, the U.S. Surgeon General warned against the dangers of smoking , and notices were printed on all cigarette packages that smoking "may be hazardous to your health."
In 1969, the wording on cigarette packs was toughened to read "is dangerous to your health."
Four years after that, at the age of 13 in 1973, the man began to smoke. By that time, the dangers of smoking were well-known, even to adolescents and certainly to their parents. He continued to smoke for many years, during a period when millions of Americans gave up the habit.
In 1969, 42 percent of Americans were smokers. By 2010, only 18 percent smoked. An estimated 8 million fewer peopled had died from smoking-related diseases because of smokers who stopped and other people who did not start smoking.
Did the jury honestly believe that the man did not know that smoking was dangerous? Did they think he was uniquely helpless against an addiction that millions of other people managed to break?
Second, what is the purpose of awarding $23.6 billion to one man's family? No amount of money can bring back a dead person, of course. But, had the man not smoked and worked a full career, is it likely he would have bequeathed that amount to his wife and children?
Can a system of similar cases that gives similar victims awards ranging from $1million to $23.6 billion truly be described as fair?
I am sure the jury believed it was meting out justice, but there is a strong whiff of vengeance in the amount of this award.
Third, imagine if this man had not been a smoker but rather a person walking innocently down the street who was stabbed by a criminal who jumped out at him from the bushes. Could his family sue the criminal's family and get a decision awarding them $23.6 billon, or $23.6 million, or even $236,000?
Of course not. No lawyer would file such a case because there would be no chance of collecting a 33 percent contingency fee on whatever damages could be extracted from the killer and his family.
Florida and Smokers
The states themselves are complicit in the persistence of smoking in the United States. In 1998 Florida joined the multi-state negotiation with tobacco companies, claiming the state needed money to cover the costs of treating poor people with tobacco-related diseases.
Florida received $13 billion in the settlement. (Its lawyers were paid another $3.4 billion to represent the state.)
This money was paid out in annual increments of $360 million dollars and, instead of being devoted specifically to give medical treatment for smokers or to encourage people to quit smoking or never to start, the money went straight into the state general fund.
By 2006, the state was spending $1 million of its annual $360 million settlement money on anti-smoking efforts. Meantime, the state was collecting taxes (now $1.40 a pack) for cigarettes sold in Florida.
A subsequent voter initiative, passed in 2006, required that a certain portion of the cigarette tax money -- $67 million in 2013 -- be spent on smoking prevention and cessation programs, and good for that.
But still. The suffering of people like the man mentioned earlier has generated $13 billion, paid over 25 years, that is going to benefit the general population of the state of Florida and not people like him.
Maybe the man's family should have sued the state instead.