The Florida Supreme Court's decision to toss out a $145-billion judgment against the tobacco industry was widely perceived as good news for tobacco firms, which saw their stock prices jump on the news and had analysts talking about a more "predictable" litigation risk in the future.

The Dow Jones News Service reported July 7 that Morgan Stanley tobacco-industry analyst David Adelman said that the Engle case decision "places the litigation risk of the tobacco industry much, much closer to that of a conventional, large-scale industry." Bolstering this outlook was a recent ruling in favor of Philip Morris in a "light" cigarettes case and the U.S. Justice Department's faltering racketeering case against Big Tobacco.

Also helping the industry are rulings by Congress and the U.S. Supreme Court limiting the ability to file class-action suits and capping punitive-damages awards. "Just five years ago, an individual plaintiff in California could have won a $28-billion verdict against the industry. Taken collectively, that could have had bankrupting effects on the industry," said Thomas Russo, a stock portfolio manager at Gardner Russo & Gardner. "I think the Engle ruling cleared the air on one of the last big threats against the industry."

Engle plaintiffs can still file cases individually against the tobacco industry, but such cases are seen as more manageable from a corporate perspective, as are other tobacco lawsuits filed by individuals.

The industry tactic has been to refuse to settle such cases and battle each claim in court. Not all plaintiffs are willing to follow through: a liability case in Florida involving flight attendants, for example, could have produced 30,000 individual claims, but fewer than 3,500 were filed and just 7 have been litigated to a verdict; the tobacco industry won 6 of those cases.