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U.S. jury slams R.J. Reynolds with $23.6 billion in damages

AP, Bloomberg

A Florida jury has slammed the R.J. Reynolds Tobacco Co. — the No. 2 cigarette maker in the U.S. — with $23.6 billion in punitive damages in a lawsuit filed by the widow of a longtime smoker who died of lung cancer in 1996.

The case is one of thousands filed in Florida after the state Supreme Court in 2006 tossed out a $145 billion class-action verdict. That ruling also said smokers and their families need only prove addiction and that smoking caused their illnesses or deaths.

Last year, Florida’s highest court reapproved that decision, which made it easier for sick smokers or their survivors to pursue lawsuits against tobacco companies without having to prove to the court again that Big Tobacco knowingly sold dangerous products and hid the hazards of cigarette smoking.

The damages a Pensacola jury awarded Friday to Cynthia Robinson after a four-week trial come in addition to $16.8 million in compensatory damages.

Robinson individually sued Reynolds in 2008 on behalf of her late husband, Michael Johnson Sr. Her attorneys said the punitive damages are the largest of any individual case stemming from the original class-action lawsuit.

“The jury wanted to send a statement that tobacco cannot continue to lie to the American people and the American government about the addictiveness of and the deadly chemicals in their cigarettes,” said one of the woman’s attorneys, Christopher Chestnut.

Reynolds’ vice president and assistant general counsel, J. Jeffery Raborn, called the damages in Robinson’s case “grossly excessive and impermissible under state and constitutional law.”

“This verdict goes far beyond the realm of reasonableness and fairness, and is completely inconsistent with the evidence presented,” Raborn said in a statement. “We plan to file post-trial motions with the trial court promptly, and are confident that the court will follow the law and not allow this runaway verdict to stand.”

The lawsuit’s goal was to stop tobacco companies from targeting children and young people with their advertising, said Willie Gary, another attorney representing Robinson.

“If we don’t get a dime, that’s OK, if we can make a difference and save some lives,” Gary said.

The verdict comes the same week that Reynolds American Inc., which owns R.J. Reynolds Tobacco Company, announced it was purchasing Lorillard Tobacco Co., the country’s No. 3 cigarette maker, in a $25 billion deal. That would create a tobacco company second only in the U.S. to Marlboro maker Altria Group Inc., which owns Philip Morris USA Inc.

The deal is expected to close in the first half of 2015 and likely will face regulatory scrutiny.

The deal to buy Lorillard and its Newport menthol brand sets up a fresh showdown between the tobacco industry and foes who say mint-flavored cigarettes pose a threat to black smokers and youths.

For Reynolds, Newport was the biggest selling point in the deal. The product accounts for about 12 percent of the total U.S. market and has grown over the past three years, providing a bright spot in a declining industry. Menthols appeal to smokers because of their cool, soothing taste, and about three-quarters of adult black smokers in America prefer them over regular cigarettes.

In 2011, a panel of outside advisers to the Food and Drug Administration suggested that eliminating menthol cigarettes would benefit public health. While stopping short of proposing a ban, the FDA found that menthol additives probably make it harder for smokers to quit. The cigarettes are associated with increased dependence, especially among blacks, the agency said in a preliminary evaluation. It is currently seeking input over whether to scale back or prohibit menthol additives.

“This deal will continue to give fuel to our fire on the issue,” said Delmonte Jefferson, executive director of the National African American Tobacco Prevention Network, one of several groups advocating for an FDA ban on menthol in cigarettes. “The menthol issue isn’t going to go away, and we’re going to keep it up.”

In June, the U.S. Supreme Court turned away cigarette manufacturers’ appeals of more than $70 million in court judgments to Florida smokers. Reynolds, Philip Morris USA Inc. and Lorillard had wanted the court to review cases in which smokers won large damage awards without having to prove that the companies sold a defective and dangerous product or hid the risks of smoking.

The Supreme Court refused to hear another of the companies’ appeals last year, wanting the court to consider overturning a $2.5 million Tampa jury verdict in the death of a smoker.

Other Florida juries have hit tobacco companies with tens of millions of dollars in punitive damages in lawsuits stemming from the original class-action lawsuit.

In August, a Fort Lauderdale jury awarded $37.5 million, including $22.5 million in punitive damages against Reynolds, to the family of a smoker who died at age 38 of lung cancer in 1995.

Attorneys for Reynolds said they would appeal, arguing that the woman knew the dangers of smoking because cigarettes had warning labels when she started. The attorney for the woman’s family said teenagers like her were targeted by tobacco companies.

Some large jury verdicts awarding tens of millions of dollars in damages to relatives of smokers have been upheld by appeals courts.