by Allan Brandt
Mass torts offered other advantages as well. By directing the court’s attention to a large class of injured smokers, such cases would reduce the focus on individual behavior and diagnosis. The “class” marked an important indicator of the social harms of tobacco. Moreover, legal teams could share the high costs of discovery, pretrial briefing, and other procedures. Their pooled resources could begin to match the highly compensated corporate firms representing the companies. Finally, in theory, class actions reduced the burdens of joining a suit for those who had possibly been injured, ensuring a more equitable distribution of the rewards. As U.S. Senior District Judge Jack B. Weinstein, who had presided over a number of historic class-action suits, would argue: “The main advantage of such mass actions—as I have observed them—is that one litigation protects the rights of many. Persons who would otherwise have claims that are too small to warrant the attention of entrepreneurial lawyers or who simply do not know that their rights have been violated can be protected.”18 Given these advantages, some eager attorneys began to envision a massive class action that would once and for all resolve both the many claims against the companies and set forth a new regime for the regulation of the tobacco industry and its dangerous product. They would achieve through the courts what the legislatures had so abysmally failed to accomplish.19
In 1992, as the Rosenblatts prepared the Broin class action, the EPA released its report declaring secondhand smoke a human carcinogen. Nonetheless, the industry would argue—as it had done for more than a decade—that these assessments were based on “junk science.” It would take six years of arduous legal wrangling to get Broin v. Philip Morris to trial. The case was originally dismissed by the trial judge, but this decision was reversed by the state’s Third District Court of Appeal, which sent the case back to the district court in Dade County, where it had originated. The case was eventually tried over five months in 1997—by which time the industry strategy of denial of harms was in tatters. The old arguments of “not proven,” calls for more research, and repeated assertions of skepticism were not only out of touch with scientific and cultural realities but, by this time, without moral credibility. In a series of depositions with industry CEOs, Rosenblatt elicited a remarkable array of industry dissembling.20
William Campbell, president and CEO of Philip Morris:Have Surgeon Generals of the United States concluded that cigarette smoking causes cancer?
A. Yes.
Why don’t you accept their conclusions? I mean, you don’t have a scientific background, so what I want to know is, what information do you have, what literature have you received, or in-house memos, that cause you to conclude they are wrong?
A. I have not concluded they are wrong. I said that it has not been proven.
Andrew H. Tisch, chairman and CEO, Lorillard Tobacco Company:
As far as you’re concerned, Mr. Tisch, as the chairman and chief executive officer of Lorillard, this warning on the package which says that smoking causes lung cancer, heart disease and emphysema is inaccurate? You don’t believe it’s true?
A. That’s correct.
Because if you believed it were true, in good conscience you wouldn’t sell this to Americans, would you, or foreigners for that matter?
A. That’s correct.
Would you prefer that your children not smoke at 18 than that they smoke, or are you entirely neutral on that subject?
A. I would prefer that they not smoke.
Bennett LeBow, CEO, the Liggett Group:
If there was not this lawsuit, and if—if—you know, you and I were friends, and we were just talking, and I said, you know, “You’re in this business, and I’m very anti-smoking. I can get together for you, any time you ask, 20 leading authorities in the world on the issue of whether or not cigarette smoke causes lung cancer, heart disease, emphysema and other diseases, and you can have as long as you want to question them because I would really like you to be convinced that cigarettes are dangerous, would you avail yourself of that opportunity? A. No.
Why not?
A. I have no interest.
You never read a Surgeon General’s report dealing with the issue of smoking and health, correct?
A. No, correct.
If I mention to you a report that got a lot of attention, of the Environmental Protection Agency, relating to smoke and health, does that ring a bell to you?
A. I read something about it in the newspapers, yes.
Do you remember even generally what you read?
A. There was some claim about second-hand smoke, you know, causing various diseases.
All right.
A. That was the claim.
You never read it?
A. Never read it.
And I assume you don’t have any knowledge on the subject.
A. I have no knowledge.
No knowledge?
A. No.
And basically, no interest in acquiring any knowledge?
A. That is correct.
As I understand your position, generally, that kind of issue is somebody else’s battle, and you’re going to do your thing, as long as it is legal to do it.
A. That is correct.
And make as much money as you can while you’re doing it?
A. I’m a businessman.
On the issue of nicotine addiction, James Morgan, president of Philip Morris, said, “I want Gummi Bears. I like Gummi Bears and I eat Gummi Bears, I don’t like it when I don’t eat my Gummi Bears, but I’m not addicted to them.” According to Andrew Schindler, CEO of R.J. Reynolds, cigarettes were “no more addictive than carrots.” “Carrot addiction?” asked Rosenblatt. “Yes,” responded Schindler. “There’s British research on carrots.”21
But as the trial proceeded, the CEOs began to subtly shift their position and concede—for the first time—that, in fact, cigarettes might pose risks. Smoking “might be” harmful: “My view is that cigarette smoking is a risk factor for those diseases and it may cause those diseases. I do not know if it does or doesn’t, in that sense. I believe that maybe it’s a risk factor,” said Schindler. James Morgan said cigarette smoking “may possibly cause cancer.” 22 But the companies still insisted that this connection was unproven and debatable.
Before the defense had completed presenting its case in October 1997, a settlement was reached. The industry agreed to pay $300 million to establish a research institute “to sponsor scientific and medical research for the early detection, prevention, treatment and cure of diseases and medical conditions caused from exposure to tobacco smoke.”23 Individual flight attendants’ cases against the tobacco companies were permitted to proceed under a streamlined approach in which attendants with certain diseases known to be associated with exposure, such as lung cancer and chronic emphysema, were not required to demonstrate the causal relationship at trial. Broin marked the first time the industry had ever settled a case.24
As Broin moved forward, other attorneys were plotting new strategies for a legal assault on the tobacco industry. In late 1994, Don Barrett was among a prominent group of plaintiffs’ attorneys gathered in New Orleans at the invitation of Wendell Gauthier, a prominent local lawyer. With the Kessler initiative heating up and new secret documents flooding in, the time now seemed right for a massive legal attack. The gathering included such tort luminaries as Melvin Belli (who had first sued Big Tobacco in the 1950s); John Coale, known for his work on the Bhopal class action; and Ron Motley, the legal nemesis of the asbestos industry.
Nearly everyone present had a friend or acquaintance, a relative or a loved one, who had succumbed to a smoking-related death. Gauthier had conceived the idea of a massive national class-action suit on behalf of addicted smokers after his close friend and legal associate Peter Castano had died of lung cancer at the age of forty-seven in 1993.25 Ron Motley’s mother had recently died of emphysema—a long and painful death. The group not only understood the cause of such deaths, they possessed a powerful sense of indignation against the companies—and the desire an
d the wherewithal to act on this anger. The epidemiology of smoking mortality had fueled a populist plaintiffs’ bar, eager to engage in courtroom combat with the attorneys of Big Tobacco.26
Following the Day One broadcast and Kessler’s nicotine initiative, Gauthier decided he now had an argument to derail the traditional assumption of risk defense offered up by the companies. In a case called Castano v. American Tobacco, he sought to represent some 45 million American smokers, claiming that the companies had knowingly and intentionally addicted them to nicotine. A class-action suit of this grandiose dimension would require the collaborative effort of a committed—and well-heeled—group of lawyers. Gauthier successfully recruited some sixty firms, each of which put $100,000 toward the effort.
When this elite subset of the plaintiffs’ bar came to tobacco, they had a powerful model in their successful litigation in the 1970s and 1980s against major asbestos producers, which ultimately drove those companies into bankruptcy. This litigation offered a training ground for going after tobacco. Critical questions in these cases centered on what the asbestos manufacturers knew and when they knew it, as well as the development of medical consensus regarding the harms of asbestos. The companies would contend that they had no way of knowing that asbestos installers and others exposed to their product were at risk.27 To rebut such claims, the plaintiffs’ lawyers became expert in conducting discovery and recruiting and preparing expert witnesses.
Tirelessly inventive in his pursuit of industry documents and medical records, Ron Motley of Charleston, South Carolina, acquired a “virtual landslide” of incriminating materials that became the foundation for his assault on the asbestos industry.28 Motley eventually came into possession, through discovery, of a 1947 report by W. C. L. Hemeon, the head engineer of the Industrial Hygiene Foundation of America. Hemeon reported that 20 percent of the workforce at two major facilities had developed asbestosis, and warned that current safety standards regarding asbestos dust would not adequately protect workers. The document all but destroyed the industry’s “we could not have known” defense. Motley said of the document, “It’s not just a smoking gun; it’s a stick of dynamite with a burning fuse.”29 Through these litigations, Motley became impressively familiar with respiratory disease as well as the industry strategy of attributing disease to tobacco use rather than occupational exposure to asbestos.
Motley and Richard Scruggs had both enjoyed a series of remarkable and lucrative victories against asbestos manufacturers and users in the early 1980s. They had collaborated in 1993 in trying a major suit that consolidated some seven thousand individual asbestos cases. Ultimately, after hundreds of cases, with thousands of additional claims pending, Johns-Manville and other manufacturers were forced to declare bankruptcy. The courts established a compensation fund for victims. Motley’s and Scruggs’s asbestos work not only confirmed their strategy, it provided the critical financial resources they would need for a massive legal strike against tobacco.30
While Castano was failing to achieve certification as a class in several venues, Stanley and Susan Rosenblatt, lawyers for the Broin case, pushed yet another major class action up the legal mountain. They filed a suit, Engle v. R.J. Reynolds, on behalf of addicted smokers across the nation. The Third Circuit Court of Appeals, however, limited the suit to Florida smokers. Eventually, it was estimated that the class might include as many as seven hundred thousand sick Florida smokers and their heirs. The judge in the case, Robert Kaye, who had also presided over Broin, decided that the massive action should be tried in three phases.
The first phase centered on whether the companies were responsible for tobacco-related diseases. In July 1999, the jurors returned a verdict on this question, concluding that the companies were liable for making a defective product causing lung cancer, emphysema, and other serious illnesses; that the companies had committed fraud, misrepresentation, and breach of expressed and implied warranties; and that they were liable for punitive damages. 31 At trial, the industry had insisted that there was still no scientific proof of smoking’s relationship to these diseases, and that smokers were fully aware of the potential risks. But the tension between these two arguments could no longer be sustained. Moreover, in a class-action litigation like this one, it was far more difficult for the industry to shift the focus to the decisions of an individual smoker. Rosenblatt’s arguments were simple and brutally direct: the companies produce a deadly and addictive product, and they have misrepresented its risks—which they well understood—to their customers.
The second phase of the trial centered on the compensatory damages to the three “representatives” of the class: Mary Farnan, Frank Amodeo, and Angie Della Vecchia, each of whom had developed smoking-related cancers. Using principles of comparative fault, the jury determined their total damages to be nearly $13 million. Finally, in phase three, the jury heard evidence for punitive damages, ultimately awarding the class just under $145 billion, the largest such award in legal history.32 (The companies would appeal all three verdicts.) The Engle trial went on for two years, making it the longest trial in the history of civil litigation. It would be the first class action against the tobacco industry to go to verdict. According to Rosenblatt, the jury “got the big picture. . . . They got the history of this industry, and they said to the American people, ‘We see through these people. They’re liars. They do terrible things.’”33 Claiming that a massive verdict might bankrupt the companies, which would be required to post bond during appeal, the industry successfully lobbied the Florida state legislature to cap appeal bonds at $100 million per defendant.34 Ultimately, in July 2006, the Florida Supreme Court would overturn the massive punitive damages award and decertify the class. At the same time, however, the court upheld the jury’s findings in Phase I, clearing the way for new individual suits in which plaintiffs would not need to demonstrate that cigarettes are defective, unreasonably dangerous, addictive, and the cause of many deadly diseases. The court argued “res judicata”: these issues have been judged.35
As the Rosenblatts worked away in isolation, a group of trial lawyers began to explore other, novel approaches to a mass litigation against the companies. The plan to seek recovery of state Medicaid costs for smoking-related diseases was hatched in Mississippi. The idea first occurred to attorney Mike Lewis after he visited Jackie Thompson, his secretary’s mother, who was dying of lung cancer at age forty-nine at Baptist Central Hospital in Memphis, Tennessee. During her long illness, which included a heart attack and triple bypass surgery, Thompson’s insurance had run out, and she ended up on Medicaid; her medical costs soon exceeded $1 million. On the way back to his office in Clarksdale, Mississippi, Lewis developed the scheme of states suing the tobacco companies for their costs in caring for patients like Thompson. He decided to try this idea out on his law school friend, Attorney General Michael Moore. Moore was interested and urged Lewis to consult another former classmate, Richard Scruggs, who was at the time assisting Don Barrett in Wilks. With Moore’s support, Lewis recruited Scruggs and Barrett to this new approach.36
The concept of the Mississippi legal action brought tobacco litigation to bear on what was by then a well-known problem: the growing expenses associated with smoking-related diseases. In the aftermath of the first surgeon general’s report, it had become possible to assess not only the prevalence of tobacco-caused diseases, but their costs. The introduction in 1965 of Medicare and Medicaid meant that a significant portion of these costs was borne by the federal and state governments. By 1990, estimates of the price tag for smoking-related diseases approached $2 billion annually.37 Moore and Lewis soon calculated that tobacco use resulted in $70 to $100 million a year in Medicaid costs in Mississippi alone.38 In the summer of 1993, Moore, together with Lewis, Scruggs, Barrett, and Ron Motley, began to explore the possibility of a state suit against tobacco. Mississippi’s claims would center on the notion of indemnity: the costs of treating smokers should be shifted from the state to the companies.
There was no question
that the legal assault on Big Tobacco carried a huge financial risk.39 Moore, Scruggs, Barrett, and Motley carefully fashioned an agreement about how they would divide the costs associated with bringing the suit (as well as the fees, should they win). Scruggs was in for 25 percent; Motley 22.5; Barrett and Lewis would each put up 10 percent; and other firms ultimately put up the rest. They agreed to work without a contingency contract to avoid criticism from state legislators. Moore would ask the court for attorneys’ fees only if the state won the case. Originally they estimated that bringing the suit would cost more than $5 million; ultimately, their expenses would approach three times that.40
On May 23, 1994, after a year of planning, Moore filed suit against the major tobacco companies, their wholesalers, trade associations, and public relations firms on behalf of the state of Mississippi. At a press conference, he explained, “This lawsuit is premised on a simple notion: You caused the health crisis, you pay for it. The free ride is over. It’s time these billionaire tobacco companies start paying what they rightfully owe to the Mississippi taxpayers.” The state suit steered clear of the principal pitfall of the individual suits. The plaintiffs wronged by the industry’s actions were the taxpayers, not smokers seeking to “blame” the companies for their own demise. As Barrett exclaimed, “The State of Mississippi has never smoked a cigarette.”41 Barrett’s frustrations following the Horton and Wilks cases made him especially enthusiastic about the Medicaid suit. In an individual case, the companies could always raise questions about specific causality. But a suit to recover medical costs across an entire state made population-based data more relevant.