Ethics Newsline®

MIAMI
A Florida state appeals court ruled last week that a Florida jury has the right to levy what could be a colossal lump-sum damage award against Big Tobacco, a decision seen as a major blow for the industry, which had hoped to deal with a series of smaller trials rather than one gigantic class-action suit.

Last week’s ruling sets the stage for Phase II of Florida’s landmark class-action lawsuit against the tobacco industry, a suit waged on behalf of an estimated 500,000 smokers.

Last July, a Florida jury found the tobacco industry liable for creating a dangerous, harmful product, and defrauding the U.S. public about the health risks posed by cigarette smoking.

The same jury is now scheduled to take up the issue of damages on November 1, CNN reported.

Tobacco lawyers had asked that damages be assessed on an individual basis, smoker by smoker, which would slow down the process and help cigarette companies gradually absorb settlements.

Previously, the appeals court had ruled out a lump-sum award. But last week, the three-judge panel reversed its decision, clearing the way for an award that could reach upwards of $300 billion.

Arguing against a lump-sum approach, lead tobacco attorney Dan Webb warned the court that such a penalty could “cause huge irreparable harm … which could bankrupt the industry,” according to CNN.

Following the decision, prices of most tobacco stocks fell to 12-month lows, according to the Reuters news agency.