SAN FRANCISCO — Diseased smokers in California may sue tobacco companies for fraud and negligence, relying on evidence of misconduct for all but a 10-year period when cigarette makers were protected from lawsuits, the California Supreme Court ruled Monday.
The court's action paves the way for many new lawsuits against the industry and potential multimillion-dollar awards for victims. Evidence that the industry may have altered tobacco with additives to make it more addictive will be admissible regardless of the industry's past protection from lawsuits.
Roughly 65 anti-tobacco lawsuits are pending in California. The state high court's rulings in two cases Monday ensure that the smokers and their heirs in these suits will be able to use a wide range of internal tobacco industry documents from before 1988 that have been deployed with devastating results so far in California.
But the state high court also gave some relief to cigarette makers. The court held that most evidence of the industry's conduct from 1988 to 1998, when the state's legislative protections for tobacco companies were in place, cannot be presented to a jury. The tobacco immunity law was repealed in 1998.
The ruling has been long anticipated because three consecutive large awards against cigarette makers have put California in the forefront of the legal war over smoking. The threat from lawsuits by individual California smokers is considered one of the greatest legal problems facing the tobacco industry, along with a racketeering suit by the U.S. Justice Department and a $144.8-billion verdict in a Florida class-action lawsuit that is under appeal.
Daniel U. Smith, who represented smokers in the two cases decided Monday, called the rulings "a major victory for smoking victims in California." He said smokers will prevail at trial without evidence of the industry's conduct from 1988 to 1998.
"The mountain of evidence in these cases is from the '50s and the '60s," Smith said.
The tobacco industry predicted that Monday's rulings will lead to new trials in three cases in which California courts have awarded smokers $153 million in verdicts against manufacturers.
Charles A. Blixt, general counsel for R.J. Reynolds Tobacco Co., called the rulings "a victory for fundamental fairness," because they did not hold the industry responsible for actions taken during the 10 years of immunity.
On a down day on Wall Street, tobacco stocks were up. Shares of Philip Morris Cos., the top cigarette maker, rose $2.29 to $47.50; R.J. Reynolds Tobacco gained $1.54 to $56.14. The favorable market reaction appears to have been based on expectations that the decisions would be even worse for the industry.
Monday's rulings came in two cases brought by smokers who died of lung cancer. Both cases had been dismissed by trial courts on the grounds that the 1988 immunity law barred such litigation.
The California Supreme Court revived the lawsuits and rejected industry claims that the immunity law also protected the industry for the years before 1988.
"With respect to conduct falling outside the 10-year immunity period, the tobacco companies are not shielded from product liability lawsuits," wrote Justice Joyce Kennard in Myers vs. Philip Morris Cos., S095213.
The court, on the other hand, rejected plaintiffs' claims that the 1998 repeal eliminated the industry's protections for the prior 10-year period.
Betty Jean Myers, the plaintiff, smoked from 1956 until 1997 and died at the age of 59 from lung cancer. A lawsuit being pressed by her children was dismissed in federal district court on a motion by the industry. Her children appealed to the U.S. 9th Circuit Court of Appeals, which asked the California Supreme Court to clarify how the decade of tobacco protection affects pending and future lawsuits.
Justice Carlos Moreno, the sole dissenter in Myers' case, insisted that the Legislature's repeal of the immunity law in 1998 was retroactive and wiped out any lingering protection for the tobacco industry.
The broader tort reform law that gave cigarette makers immunity has been dubbed the "Napkin Deal." A group of powerful elected officials, including then-Assembly Speaker Willie Brown and then-Senate President Pro Tem Bill Lockyer, met with lobbyists from several industries at Frank Fat's restaurant in Sacramento and scrawled details of the proposed law on a napkin.
Philip C. Bourdette, who represents Myers' children, predicted they will eventually prevail. "We are now back in court," he said.
Ronald Olson, who represented Philip Morris in the case, said he also was gratified by the ruling because it will limit the evidence Myers' family can present. "Clearly this narrowed the scope of the litigation," he said.