The Winds of a Tobacco War
A recent decision by a Florida Appeals Court affects individual cases, but Big Tobacco still faces major battles ahead
By Bryan Robinson
Associate Editor, Court TV Online
The surprising news could not have come at a better time for the tobacco industry.
Two weeks earlier, a Florida jury had found Brown & Williamson Tobacco Corp. liable in the death of a long-time smoker Roland Maddox and had awarded his family nearly $1 million. And a month-and-a-half earlier, Big Tobacco resolved a suit brought by the state of Minnesota and Blue Cross and Blue Shield in which it agreed to pay $6 billion for smoking-related illnesses over a 25-year period.
So when the Florida Appeals Court reversed former smoker Grady Carter's 1996 landmark victory over Brown & Williamson Tobacco Corp., a reeling tobacco industry's spirits soared.
But while the reversal appeared to vindicate Big Tobacco and cast doubt on whether the Maddox victory would be held up on appeal, the ruling will not likely have a broad impact on future tobacco cases. Moreover, despite this latest victory, Big Tobacco may still be an industry in trouble.
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Grady Carter initially won a $750,000 award from Brown & Williamson in 1996.
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"The decision in the Carter case should not have any significant short-term effects," said Mark Gottlieb, an attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston and a member of The State Tobacco Information Center (STIC). "The key question is whether the Florida Supreme Court will review the decision and, if so, how it will rule. While the prospects for review of a unanimous appellate court decision are often poor, the issues raised on appeal in Carter are likely to come up repeatedly as Norwood Wilner's dozens of cases go to trial."
Norwood Wilner, a lawyer based in Jacksonville, Fla., is on a crusade against the tobacco industry. He was the legal force behind the Carter and Maddox victories and reportedly has hundreds of individual cases against tobacco companies awaiting trial in Florida. Wilner's initial victory over Brown & Williamson attracted national attention because it marked the first time a tobacco company had been found liable for a plaintiff's smoking-related illness.
The Florida court based its ruling primarily on its belief that Carter waited too long after learning he had lung cancer to file suit against Brown & Williamson and therefore should not have been allowed to go to trial. Carter, a 68-year-old former air traffic controller, learned he had a lung abnormality on Feb. 4, 1991 and was ordered to see a specialist. By Feb. 14, further examination confirmed that Carter was suffering from lung cancer.
Carter did not file suit until Feb. 10, 1995, four years and six days after he had first learned about an abnormality. According to the appellate ruling, Carter missed meeting Florida's four-year statute of limitations by only six days.
But the court also gutted the core of Wilner's case against Big Tobacco: his use of a 1963 memo from Brown & Williamson general counsel Addison Yeamann during the Carter trial. In this memo, which was shown to jurors despite Brown & Williamson's objections, Yeamann advised the company to withhold its report on the health risks of smoking from the U.S. surgeon general.
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Norwood Wilner, who represented Grady Carter and the family of Roland Maddox, relied on the use of internal tobacco documents in his two victories against Big Tobacco.
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Wilner contended that the memo was evidence of fraud; Brown & Williamson argued that admittance of the memo at trial violated lawyer-client confidentiality. The appellate court sided with Brown & Williamson and said the memo did not indicate fraud on part of the tobacco company.
The Florida court also found that Wilner's use of the documents improperly focused on the alleged misconduct of Brown & Williamson when the American Tobacco Co. should have been the plaintiff's main focus. (Carter originally filed suit against American Tobacco, which made of the brand of cigarettes that Carter smoked for 45 years. He later named Brown & Williamson in the suit after the company bought American Tobacco in 1995.)
In addition, the court found that Wilner should not have been allowed to present testimony about the alleged inadequacy of post-1969 cigarette warning labels. These allegations, the panel said, were pre-empted by the 1966 federal Cigarette Labeling and Advertising Act (as amended in 1969), which requires health warnings on all cigarette packs. The ruling said that the testimony violated a federal law that prohibits states from claiming that warning labels after 1969 were inadequate.
The appellate ruling was disheartening for Wilner because it revealed flaws in his seemingly golden formula of success against the tobacco industry. Wilner's strategy involved not only medically linking cancer to smoking but proving through the use of confidential company documents that Big Tobacco knew about the dangers of smoking and tried to hide it from the public. Wilner also tried to prove that the industry's warning labels on his products did not truly reflect its knowledge about smoking's hazards.
In the Carter case, Wilner apparently misused the tobacco memos and failed to convince the appellate court that the memos proved fraud on Brown & Williamson's part. Wilner reportedly plans to appeal the decision to Florida's Supreme Court. Still, the appellate ruling, may not doom Wilner and other tobacco plaintiffs; it may empower them instead.
"The decision is certainly a disappointment to plaintiffs who felt empowered by the recent victories against Big Tobacco, but it is not likely to have a broad impact on other individual cases," said Mary Aronson, president of Aronson Washington Research. "Wilner is likely to learn from those mistakes as he pursues the hundreds of other cases he has pending in Florida. And other plaintiffs may wait until these appeals are settled before going forward with their cases."
Nonetheless, Wilner may not need to overhaul his general strategy. The issues that reversed the Carter victory, such as the statute of limitations and misuse of the tobacco memos, are isolated to that case alone. The challenge Wilner and other tobacco plaintiffs face is proving that the various industry documents are evidence of fraud and that this would supercede the attorney client privilege that Big Tobacco has used to keep the documents out of trial. Wilner may have already employed these tactics in his most recent victory against Brown & Williamson.
In the Maddox case, Wilner had more evidence to prove an alleged industry-wide conspiracy to defraud the public. He relied heavily on the use of internal Brown & Williamson documents released during the 1994 Bliley Congressional hearings and the Minnesota tobacco settlement to show Big Tobacco's alleged cover-up of smoking's hazards. In the Carter trial, Wilner did not have access to the additional documents released during the Minnesota settlement. These memos gave Wilner a better chance of overcoming the hurdle of Brown & Williamson's attorney-client privilege.
Wilner's revised strategy worked. On June 10, a Florida jury found Brown & Williamson liable in the death of Roland Maddox and awarded his family $500,000 in compensatory damages and $450,000 in punitive damages. Brown & Williamson vowed to appeal. While Wilner's use of secret tobacco memos led to the reversal of the Carter victory, Aronson says that his access to more documents and more efficient use of the documents may keep the Maddox victory from a defeat on appeal.
"Since the Carter verdict two years ago, many more industry documents have been released which may provide incriminating evidence against the industry," Aronson added. "Wilner's use of these documents in the Maddox trial may be the factor that might get the verdict in that trial upheld on appeal."
The Maddox victory, however, still faces other various challenges on appeal. Brown & Williamson attorney John Nyhan argued during trial that the documents should not be admitted at trial because they did not prove an industry-wide conspiracy aimed directly at Maddox. And Angela Widdick, Maddox's daughter, implied through her testimony that the warning labels on cigarettes after 1969 did not sufficiently warn her father that he could die from smoking.
In addition, three other points in the appellate ruling against Carter directly apply to the Roland Maddox case: the misuse of the Brown & Williamson documents; other testimony that implied post-1969 cigarette warning labels were inadequate; the ruling that the Addison Yeamann memo, which was admitted into the Maddox trial, is protected by attorney-client confidentiality. Gary Black, tobacco analyst at Sanford C. Bernstein & Co., contended that these arguments could to a reversal of the Maddox verdict.
"One could argue that there is a strong chance that the Roland Maddox case could be overturned on appeal on those grounds," Black said. "The psychological win [for the tobacco industry] is big and sends a message to Washington that the industry is not as weak as they believed."
But, Black noted, a psychological victory for Big Tobacco has no long-term significance. One appellate victory will not erase public pressure to prosecute the industry. "There will still be judges who don't like the tobacco industry willing to bend the law against the tobacco companies," Black said. "It won't change people's minds about the tobacco industry. It [the ruling] won't deter people from pursuing suits against the industry."
Gottlieb characterized the psychological victory as merely a reaction to shift in momentum in the tobacco legal war. Tobacco plaintiffs felt a similar feeling of euphoria following the Minnesota settlement and Maddox verdict. Gottlieb felt that Big Tobacco is only trying to reassure its nervous investors that despite the legal battles, the industry is still fruitful.
"The celebration is primarily an act to placate investors," Gottlieb said. "This is a desperate industry with legal problems which will likely prove to be insurmountable. Their efforts will need to
focus on obtaining legislative immunity if they are to last. This, coming on the heels of a total defeat and capitulation in Minnesota and another jury verdict against them in Maddox, gives the industry a chance to heal some of its wounds by celebrating."
Nonetheless, as Aronson pointed out, the verdicts in the Carter and Maddox cases and the Carter reversal illustrate the tension between an increasingly educated public's perception of the tobacco industry and the law.
"If there is any lesson to be learned, it is that juries may have been so influenced by the negative press that has come out against cigarette makers in the past four years that they will issue verdicts contrary to the law," Aronson said. "And with two additional years of internal industry documents released since the Carter verdict and with a general public educated by relentless negative information about tobacco manufacterers, there are likely to be more jury verdicts against the tobacco industry."
But how many, and will they eventually hold up in the appellate courts? Although Wilner initially defeated Brown & Williamson in the Carter case, he still lost two other subsequent cases against the tobacco industry. And the Maddox victory still faces the challenge of surviving a Brown & Williamson appeal. The success of each case against Big Tobacco varies according to evidence and the jury's attitude towards the industry. Big Tobacco's track record in court is still highly successful -- even against its most successful nemesis, Wilner.
"The industry still wins 75 percent of its battles," Black said. "When you go to court 10 times, you may lose a couple of battles."
Ultimately, the tobacco industry has more resources to outlast its detractors the long-term tobacco legal wars. A $1 million verdict (that may be overturned), Black noted, is nothing to an industry that makes $45 billion in domestic sales a year. And that profit supports industry leader Philip Morris' reported $600 million legal bill. Most tobacco plaintiffs do not have that kind of bankroll, and many of their attorneys have remained unpaid for their services. Big Tobacco is hardly on life support and appears ready for the legal battles ahead.
"The industry's critics were predicting its end 13 years ago and 13 years later we're still here," Black said. "And 13 years from now, they'll still be predicting the end of Big Tobacco."
June 29, 1998
