Fla. Verdict Has No Immediate Impact on Tobacco Firms July 17, 2000
News Summary
Lawyers said the record-breaking $145 billion punitive-damages verdict in the Florida sick-smokers' case would not have an immediate financial impact on cigarette companies, Reuters reported July 15.Furthermore, the verdict is not expected to affect the 1998 nationwide tobacco settlement with state attorneys general. "The verdict should not endanger the settlement payments to any state since the companies have the financial capacity to pay us as well as these verdicts in private actions," said Connecticut Attorney General Richard Blumenthal.
Tobacco firms claimed that a large verdict could send them into bankruptcy. The threat resulted in the National Association of Attorneys General hiring bankruptcy lawyers to protect the settlement.
But Matthew Myers, president of the Campaign for Tobacco-Free Kids, agreed with lawyers that the threat is "overblown and premature."
"If some of the tobacco companies go out of business as the result of the [Florida] punishment, others will quickly be created to fill the void and share in the multibillion-dollar profit from tobacco sales," Myers said.
Lawyers pointed out that the award would likely be reduced on appeal, a process that could last at least five to 10 years. They also indicated that the industry could handle the crisis by increasing cigarette prices.
"The jury was unswayed by the tobacco companies' threat that a high damage award would cause them to go belly up," said Harvard Law Professor Laurence Tribe. "They took their claim the sky would fall with a barrel of salt."
COMMENTS ON THIS ARTICLE: