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US sees fall in anti-tobacco lawsuits

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May 29, 2004 12:44 IST

The US has witnessed a marked drop in anti-tobacco litigation in recent years. Since 1997, the number of pending cases has dropped over 30 per cent from 679 to 470, according to data provided by Altria, formerly Philip Morris Companies and parent of Philip Morris, USA, Philip Morris International and Kraft Foods.

The sharpest fall has come in cost recovery cases, which are initiated by institutions such as medical associations against tobacco companies to recover the costs of treating smokers' ailments.

Class action suits represent the second biggest fall at 49 per cent. Individual cases account for the majority of the cases but this number has dropped 22 per cent over 1997.

The fall in the number of litigation is partly the result of a large share of verdicts in favour of the industry, dismissals before trial, favourable appellate decisions and a 2003 Supreme Court ruling setting limits and standards on awards for punitive damages.

Since January 1, 2003, there have been 14 trials of individual cases against the industry. Of these, ten verdicts have gone in the favour of tobacco companies.

The remaining four, for punitive damages collectively worth $ 333 million, are currently in appeal. All four cases are from the West Coast, which has traditionally seen a high incidence of anti-tobacco litigation.

But both states have seen a reduction in the number of such litigation in recent years. In California, there were 14 cases pending as of May 2004, against 39 in May 2000.

In Oregon, the respective numbers are three and one. Overall, since the first individual case in 1954, there have been 2,714 cases filed by individuals against US tobacco companies, of which 1,649 have been filed against Philip Morris, USA.

Over that period, there have been just 71 trials, with 50 defence verdicts, 10 plaintiff verdicts and two mistrials.

In class action litigation, which first started in 1997, Federal and state courts have been denying litigants certificates, which means the courts do not allow the case to proceed as a class action on various grounds. Since 1997, 35 courts have refused to certify cases 45 times.

In one of the most publicised of the class action cases, the Engle suit, the jury awarded $12 million in compensatory damages to three class representatives and $145 billion in punitive damages for the entire class.

The Florida Third District Court of Appeals reversed this verdict in May 2003. The case is, however, pending a hearing by the Florida Supreme Court later this year.

In another major case (Scott), the jury issued a verdict requiring the major US cigarette manufacturers to pay approximately $590 million for a smoking cessation programme in Louisiana.

Philip Morris USA plans to ask the court to set aside the verdict and will appeal the judgment if that motion is unsuccessful. Further, approximately 30 cases filed in the US by foreign governments to recover health care expenses have been dismissed voluntarily or by court order.

The writer was in New York courtesy the Altria group.

Kanika Datta in New York