US tobacco companies yesterday brushed aside a jury's decision to award $145 billion in punitive damages against them, promising to triumph on appeal and foreseeing no immediate financial distress.
A six-person Miami jury returned the verdict following a two-year trial against the top five US tobacco companies, Philip Morris, RJ Reynolds, Brown and Williamson, Lorillard and Liggett, along with two tobacco research institutions.
They had been sued in a classaction suit representing as many as 700,000 residents of the state of Florida who complained of smoking-related illnesses brought on by actions of the companies.
Mr Stanley Rosenblatt, lead attorney for the plaintiffs, praised the jury and called it "a day of reckoning" for the industry. "Six thoughtful, courageous Americans listened quietly and carefully for testimony for two years and, damn it, they did the right thing," Mr Rosenblatt said.
"They said to these companies, `Cut it out. Tell us the truth for a change."'
The hardest hit was Philip Morris, which was ordered to pay $73.96 billion. "We believe this verdict is grossly excessive and illegal," said the Philip Morris general counsel, Mr William Ohlemeyer. "As punishment, it is wildly out of sync with evidence the jury heard and the law governing damage awards. As punishment, it is unnecessary. At Philip Morris, we are changing the way we do business. We're making efforts to reduce underage smoking and develop new products."
Predicting victory on appeal, he noted that many other US juries have rejected claims by smokers "because separate and apart from what they hear and believe about cigarette smoking and the tobacco companies, they believe smokers have knowledge and awareness of the risks of smoking and are legally responsible for those choices."
A company statement said it would be a long time before any of the money awarded could be collected, notably as no portion of the amount can be paid out until all the claims of the 700,000 plaintiffs are resolved by appellate courts - a procedure that will require dozens of judges and juries to work for decades.
At Brown and Williamson, acknowledging "shock and outrage" at the jury's decision, a spokesman said the company is convinced it will never have to pay its $17.59 billion damages.
"Florida law caps the amount that companies must pay at 100 million dollars while the appeals process is underway," a company statement said, adding that the amount of the verdict "bears no relation to reality".
The combined net worth of all the defendants is just over $15 billion, according to Brown and Williamson, meaning that the jury ignored instructions that their decision could not financially destroy the companies.
"Obviously, no industry in this country can pay almost 10 times their net worth," Brown and Williamson insisted. "The appellate courts are bound to correct this incredible miscarriage of justice."
The RJ Reynolds deputy general counsel, Mr Daniel Donahue, explained that the fundamental issue on appeal will be whether smokers can be considered a "class".
In a further reaction Friday, the US Chamber of Commerce denounced the jury's decision as an "obscene symptom of a court system that is out of control".
"Trial lawyers have subverted the legal system for their own financial gain," charged Mr Bruce Josten, the chamber's executive vice president.
The verdict was the largest liability damage award in US history. It was a major victory for the plaintiffs and their supporters who hold the tobacco firms responsible for the enormous health costs of smoking and had sought a massive punitive award to send a message about the dangers of tobacco and responsibility of companies to provide warnings.
After a trial lasting more than two years, Florida Circuit Judge Robert Kaye read out the verdict reached after approximately five hours.
The ruling was welcomed last night by the solicitor representing more than 200 Irish smokers taking legal action against tobacco companies.
"When we started out two years ago we were treated as a joke. This landmark judgement shows how serious we are," said Mr Peter McDonnell.