AS smokers' stories go, Grady Carter's is not unusual. He started smoking in 1947 at the age of 17, adopted unfiltered Lucky Strike as his favourite brand, quit on finding he had cancer in 1991, and had part of a lung removed the same year.
The difference is that Mr Carter, a retired air traffic controller from Jacksonville, Florida, sued the US tobacco industry, and won. Last month, at the end of a three week trial, a Florida jury awarded him and his wife Mildred $750,000 (£461,500) in damages against Brown & Williamson Tobacco, Lucky Strike's manufacturer.
The award was substantial: yet it paled into insignificance in comparison with the effect on tobacco companies' shares. Investors knocked about $15 billion from the combined market capitalisations of US tobacco companies amid fears that the case marked a historic turning point for tobacco litigation.
Share prices have crept back up a little following the tobacco industry's triumph in another case 10 days ago. But their continuing low levels suggest a lingering perception that time is running out for Big Tobacco.
If the tobacco industry's luck is turning in the courts, it is holding out on the streets. Government efforts to cut the proportion of adult smokers to 15 per cent by the end of the decade have hit a wall. After declining from a peak of 42 per cent in 1966, the figure bottomed out at 25 per cent in 1990 and has stuck there since, with nearly 3,000 new smokers a day replacing those who give up or die.
President Clinton, the first actively anti smoking president, is now seeking to cut off the supply of new smokers by cracking down on youth access to cigarettes and imposing tough restrictions on advertising. He has also declared nicotine an addictive drug and put the tobacco industry under the jurisdiction of the Food and Drug Administration, a move the tobacco industry is bitterly resisting in the courts.
In practice, Mr Clinton's attempts to curb under age smoking may have little effect. Studies have shown that teenagers who take up smoking do so because of peer pressures or the influence of other smokers in the family, not because they are seduced by advertising images of the Marlboro Man or Joe Camel. And under age smokers who want to obtain cigarettes illegally will continue to find ways of doing so.
Litigation, however, is a more serious threat.
Theoretically, the tobacco companies could face claims running into billions of dollars if cases go against them, dwarfing the sums awarded in personal injury claims against the asbestos industry.
Until now, the US tobacco industry has not paid out a cent in damages because juries have taken the view that people who take up smoking are aware of the risks. The Florida case was different because the jury saw leaked documents indicating that US cigarette makers knew about, but concealed, information about the addictiveness and health risks associated with smoking.
Documents such as these, say anti tobacco lawyers, have transformed the outlook for tobacco litigation. Mr Norwood Wilner, Grady Carter's lawyer in the Florida case, says: "Even today, the tobacco companies come into court and deny that cigarettes cause disease. Yet these documents show that the companies' own people have for years been discovering that cigarettes cause cancer and that cigarettes' are addictive, and writing that in their own files."
Mr Wilner's Florida law firm, Spohrer Wilner Maxwell Maciejewski & Stanford, has hundreds of tobacco lawsuits in preparation, and Mr Wilner says he expects to win a high percentage of them. "Anyone who was at the last trial knows it wasn't even close. So, unless the tobacco corn panics come up with a whole new ball game, I think they will be losing their fair share", he says.
The stock market already seems to have decided that the industry's days are numbered. Wall Street analysts say the earnings from Philip Morris's food and international tobacco businesses, which accounted for 66 per cent of operating profits last year, would justify a share price of about $85: so, with Philip Morris's stock at $89 1/8 this week, the market was putting a value of next to nothing on the company's US tobacco subsidiary; a business that generated operating profits of $3.74 billion last year.
So what are tobacco companies to do? Their stated position is that the Florida case was an aberration, and that their stock prices will recover after they have won a few more cases. But Mr Gary Black, a tobacco analyst at the Wall Street firm of Sanford C. Bernstein, thinks they are wrong. "I worry that they are going to lose another case at some point". It might take 10 more, but they are going to lose again.
In Mr Black's view, the industry should be looking for a deal with Congress giving it immunity from all litigation. In return, the industry would accept regulation by the Food and Drug Administration and pay a fixed annual sum to pay for smokers' healthcare costs and anti smoking campaigns.
A 25 per cent increase in the price of a pack of cigarettes would yield $6 billion a year to pay into some sort of fund, Mr Black says probably without hitting the industry's profits much. "My view is that if you could come up with some kind of legislative solution that put all this litigation behind them, the tobacco companies would be nuts not to take it."
Mr Richard Kluger, author of a definitive history of the US tobacco industry, says the main obstacle to the search for a solution is the US presidential election. The tobacco companies, he says, are holding back in the hope of a win by Mr Bob Dole, the Republican candidate, because he and his party are seen as more sympathetic to the industry.
But if Mr Clinton is re elected, Mr Kluger says, it is not inconceivable that the tobacco companies will be driven to the bargaining table. "What is plausible the day after election day is different from what is plausible today", he says. "And I think a deal is plausible."
