Commentary

Litigation Lunacy in Florida

Lunacy. That’s the only way to describe the feeding frenzy that could pilfer $145 billion from hapless tobacco companies in the Engle case in Florida — the same state, by the way, that manufactured cigarettes for distribution to its prison population, happily collected millions of dollars in cigarette taxes, and invested $800 million of its pension assets in tobacco stocks.

The plaintiffs’ lawyers, Stanley and Susan Rosenblatt, have an equally suspect record. Their earlier “victory” in the Broin secondhand-smoke case garnered $46 million in fees for themselves, but not a penny in compensation for the flight attendants who were their clients.

Then there’s Circuit Judge Robert Kaye, who presided over the Engle fiasco — belatedly disclosing that he is a former smoker with heart disease and, therefore, a potential member of the plaintiffs’ class, entitled to a share of the damages.

To be blunt, nothing can justify this abominable verdict. First, the case should never have been tried. Second, it should never have been litigated in the manner that Judge Kaye condoned. Third, it should have been resolved in favor of the defendants. Fourth, its consequences are malignant and highly contagious.

To deserve a class-action trial, plaintiffs must have experienced similar injuries arising out of a common set of underlying facts. Smokers throughout the state of Florida — many of whom smoked most of their lives elsewhere — used hundreds of different brands for different lengths of time; consumed varying numbers of cigarettes each day; had widely divergent medical histories, diets, exercise regimens, and exposure to other carcinogens; and contracted diseases ranging from a sore throat to lung cancer. Class action is quite simply preposterous.

The federal government and 25 of 27 states have rejected tobacco class-action lawsuits. Only Florida and Louisiana have allowed those suits to move forward. The Engle class should never have been certified. Exacerbating that blunder, Judge Kaye, in the face of a contrary opinion from Florida’s attorney general, permitted the jury to decide punitive damages for the entire class after hearing evidence on only three of the claimants. The selected plaintiffs were not the designated class representatives. They were plucked from among the class members, with the judge’s consent, because the lawyers knew that the three case histories would resonate with the jury.

No one knows the names of the other class members. No one even knows how many smokers are in the class; estimates have ranged from 30,000 to nearly 1 million. No one knows anything about their alleged injuries or how much in compensatory damages might be warranted. Yet Judge Kaye approved an award of punitive damages in the aggregate, as if it didn’t matter whether 50,000 plaintiffs had a hacking cough or 500,000 died from smoking, whether they started smoking as kids or as consenting adults, and whether they were ever influenced by the industry’s “deceptive” enticements.

This case is just feel-good retribution against a deep-pocketed industry by an angry jury, expedited by a partisan judge bent on social engineering. In the first phase of the trial, Judge Kaye would not let the defendants argue that smokers were aware of the risks and responsible for their behavior. Only after the industry had already been held liable was the jury allowed to hear “assumption-of-risk” evidence for the three handpicked plaintiffs. By then it was too late; all that remained was the determination of damages.

Of course, if a plaintiff can prove he was misled, relied on the industry’s deceptive claims, started smoking as a child, became addicted prior to age 18, and came down with a disease caused by his smoking, then he might be able to win in court. But the three claimants, who smoked for 29, 34, and 40 years respectively, offered no such proof. And once they turned 18, if not yet addicted, they became adults, entitled to sign contracts, vote, go to war, marry, get divorced, have an abortion — decisions no less weighty than whether to smoke. If an adult can choose to stop but doesn’t, he assumes the risk and cannot hold tobacco companies accountable.

Meanwhile, if this verdict stands, the repercussions will be grim, including brutally regressive price increases and a pervasive black market dominated by criminal gangs hooking underage smokers on adulterated products.

Ironically, the only effective remedy in the battle against cigarettes — vigorous enforcement of laws that prohibit the sale of tobacco products to kids in all 50 states — could be jeopardized by the $145 billion award to the Engle class. That’s because the tobacco companies might not be able to honor their commitments under the 1998 multistate tobacco settlements — a quarter of a trillion dollars payable to the states over 25 years.

Indeed, that’s why the state of Florida capped the bond that the industry has to file to appeal the Engle verdict at $100 million per company instead of 115 percent of the damage award. Otherwise, the tobacco companies might not have been able to appeal, and the state’s cash cow might have been threatened. Humorist Dave Barry got it exactly right when he described the real meaning of the tobacco settlement: The industry finally admitted that its product has killed millions of Americans. Now, pursuant to the settlement, the industry will continue to kill millions of Americans — under strict governmental supervision.

Most important, the Florida verdict has yielded more in damages than the judge and jurors, blinded by their anti-tobacco obsession, could possibly realize. The biggest damage of all is to the rule of law and the reputation of our legal system. If we are to endure as a free society, the law must be objective and predictable. Individuals and corporations must be able to determine the limits of acceptable conduct and the punishment that will be meted out for transgressions. By contrast, the kangaroo court in Florida has given us law on the fly, governed by whim and emotion and manipulated by clever attorneys. Now it’s up to an appellate court to restore sanity and equity — before the damage is irreparable.

Robert A. Levy is a senior fellow in constitutional studies at the Cato Institute.