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JUNE 07, 17:53 EST

Tobacco Award May Prompt More Lawsuits  Abuse

LOS ANGELES (AP) — The $3 billion jury award to a longtime smoker with lung cancer could trigger a flood of lawsuits against tobacco companies, legal experts said Thursday.

Stock prices fell not just for Philip Morris Co. Inc., which was hit with the judgment Wednesday, but for other cigarette manufacturers as well.

The verdict was the largest ever in an individual lawsuit against a tobacco company.  

``Their day of reckoning is here,'' attorney Michael Piuze, who represented Richard Boeken in the trial, told ABC's ``Good Morning America'' Thursday. ``It's going to happen again. They should get used to it.''

A Los Angeles Superior Court jury awarded $3 billion in punitive damages and $5.5 million in compensatory damages to the 56-year-old plaintiff from Topanga. A smoker for 40 years, Boeken has an estimated six to 12 months to live. The former oil and securities dealer claimed he was the victim of an industry campaign that portrayed smoking as ``cool'' but concealed its dangers.

Although the award is likely to be greatly reduced — if not reversed — on appeal, ``big verdicts always produce more lawsuits,'' said Tom Harrison, publisher of Lawyers Weekly USA. ``Lawyers read big verdicts as symbols that jurors can get angry about a certain thing.''

The award is a sign that citizen anger against tobacco companies is growing in the same way it built up against sexual harassment, health maintenance organizations and poorly run nursing homes, Harrison said. 

``Societal attitudes toward smoking have gone from complete acceptance to skepticism to concern to anger,'' he said.

He said lawyers will be particularly drawn to such lawsuits because both Piuze and the team that won a record $145 billion award in a class-action tobacco case in Florida last year were new to tobacco litigation. ``It's now becoming a run-of-the-mill personal injury action,'' Harrison said.

Deborah Hensler, Ford Professor of Dispute Resolution at Stanford Law School, said she is not convinced that Wednesday's verdict will lead to more tobacco lawsuits. But she said it could lead to higher jury awards in future cases.

Boeken's award and the Florida verdict could have an ``anchoring effect'' on jurors who are trying to figure out the amount of damages needed to adequately punish a company, Hensler said. 

``You begin to put a figure in Americans' minds about what might be an appropriate jury award,'' she said.

Donald Hildre, an attorney working on a pending California class-action tobacco case, said the verdict will have little lasting impact because it won't hold up on appeal. ``It sounds great ... but it's much better to reach a settlement with the tobacco companies,'' he said.

Verdicts like Boeken's are ``what gives punitive damages a bad name'' because they suggest that people can sue their way to riches, Hildre said.

Plaintiffs have more ammunition than ever against tobacco companies, said John R. Climaco, one of the attorneys who reached a landmark settlement with tobacco companies in 1997. That legal action uncovered documents showing tobacco companies knew about the deadly effects of smoking, and during World Health Organization hearings in Geneva, Philip Morris conceded that smoking is addictive and harmful. 

``In the 1980s it was very hard to win these cases,'' said Richard Daynard, a Northeastern University law professor and chairman of the Tobacco Products Liability Project. ``It's gotten a lot easier as these documents have come out. ... The cases are obviously eminently winnable.''

Lawyers said jurors have been more likely to vote against tobacco companies if they live in urban areas.

Los Angeles County appears to be particularly fertile ground for big-money awards, Harrison said. Wednesday's verdict is the largest of 2001, and the biggest awards in 2000 and 1999 also came out of the county.

Climaco said that California ``has really been on the forefront of the war against tobacco'' through means including tobacco-tax initiatives, big anti-tobacco campaigns and tough anti-smoking laws. ``That creates a climate that brings it to the attention of the public,'' he said. 

Philip Morris stock fell 2.96 percent, or $1.48, to $48.52 in trading Thursday on the New York Stock Exchange. R.J. Reynolds Tobacco Holdings Inc. dropped 5.42 percent, or $3.19, to $55.69 and British American Tobacco PLC fell 1.7 percent, or 27 cents, to $15.02.

 

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6/7/01

Order requires disclosure of ties in state contracts

Gov. Don Siegelman, stung by criticism of his administration's financial practices, signed an executive order Wednesday requiring anyone getting state business or grants to disclose family and political relationships.

"Contracts should go to the best qualified company that can do the best work at the best price. That has not always happened," Siegelman said.

The governor promised the executive order May 4, when he fired the construction managers for a $16 million state warehouse project in Montgomery. The construction project was put on hold amid questions about possible double billing, payments without a signed contract and political connections to the governor's staff.

"It won't be done in this place. It won't be done by these people," Siegelman said Wednesday.

Siegelman said he is planning some personnel moves in his administration — including a key figure in the warehouse deal — but he said they should not be considered discipline.

He said Nick Bailey, acting director of the Alabama Department of Economic and Community Affairs, will be moving to a different post within the executive office. Bailey's agency was supposed to oversee the warehouse project that is now under investigation by the state attorney general.

Siegelman's administration also has come under fire for awarding an unbid $6.5 million job-training facility contract at the new Honda minivan plant to a firm with ties to Siegelman's brother, Les. The firm gave $8,000 to Siegelman's 1998 election campaign and $2,500 to a foundation that supported the governor's failed lottery campaign.


Lt. Gov. Steve Windom, who is considering running against Siegelman next year, said the executive order was a positive step, but the governor should have disciplined or fired some of his staff involved in the questionable deals.

"It's an administration that needs integrity reform and the time to do it is now," Windom said.

Windom made his comments at a State Ethics Commission meeting moments after Siegelman signed his executive order in front of the commission. Windom invited Siegelman to stay during his comments, but the governor departed.

Siegelman's executive order, effective Aug. 1, requires anyone seeking to do business with the state or seeking a state grant to disclose any family and political relationships. Contractors working on state projects also will have to disclose any paid consultants and lobbyists they use.

 

 

 

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