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Tobacco Firms Struggling in West Coast Courts


With Friday's record $28-billion punitive damage award against Philip Morris Cos., West Coast courts continued to be a killing ground for tobacco companies, whose success in fending off product liability claims was once the envy of the corporate world.

The victory by cancer victim Betty Bullock of Newport Beach marked the industry's fourth straight courtroom defeat in California. With two additional mega-verdicts in Oregon, cigarette makers are winless in six consecutive West Coast trials dating back to 1999. All of the cases are on appeal.

"Despite an enormous amount of work, Philip Morris has appeared to have made no progress in its California litigation strategies," Martin Feldman, tobacco analyst with Merrill Lynch, said after Friday's verdict. "Jurors in California continue to remain tremendously angered by the conduct that is portrayed by plaintiffs" through internal industry documents, he said.

The battle is scheduled to resume next week in Sacramento as jury selection begins in a case filed against Philip Morris and R.J. Reynolds Tobacco Co. The two leading U.S. cigarette makers are scheduled to go on trial again Oct. 21 in a case in San Francisco. And Philip Morris and Brown & Williamson Tobacco Corp. will be defending a third case in Los Angeles in January.

Although the industry has suffered a few losses elsewhere, there is wide agreement that California juries seem especially hostile to cigarette makers--and there are a number of theories why this is so.

Reflecting low social acceptance of smoking, California has the nation's toughest protections against secondhand smoke and the lowest per capita rate of smoking of any state but Utah. Robert Rabin, a Stanford University law professor, notes that Californians have long been concerned with air pollution and healthful lifestyles--and may take a particularly negative view of industries that market dangerous products.

Even in non-tobacco cases, California juries at times have dealt harshly with companies deemed to have ignored health or safety concerns.

In July 1999, for example, a Los Angeles jury ordered General Motors Corp. to pay a then-record $4.8 billion in punitive damages to six people who were badly burned in a fiery wreck. The award was pared by the trial judge to $1.2 billion, and the case is on appeal.

Perhaps most important, anti-smoking sentiment in California has been hardened over the years by state-sponsored ad campaigns that attack not only smoking but also the character and motives of the tobacco industry.

The campaigns, funded by a 25-cent cigarette tax increase passed by voters in 1988, have essentially poisoned the jury pool, tobacco industry officials have complained. Though state health authorities say the ads are intended to promote public health--not successful litigation--many observers believe that they have increased disdain toward the industry.

The Bullock case was the first to be tried since a state Supreme Court ruling that tobacco officials and Wall Street analysts had hoped might get the once-invincible industry back on the winning track. The Aug. 5 ruling barred smokers from presenting evidence of industry deception from 1988 to 1998--the period when a legislative ban on product liability claims against the industry was in place.

But that hope proved illusory, as the ruling reduced only slightly the arsenal of incriminating documents available to plaintiffs, including Bullock and her lawyer, Michael Piuze.

Generated mostly in the 1950s, '60s, '70s and '80s, the documents were the centerpiece of Bullock's case--and, as intended, focused the jury's attention on the conduct of Philip Morris rather than on Bullock's failure to quit.

Although industry officials have sought to define the recent setbacks as a West Coast problem, it's not clear why that should be a source of comfort. Although its smoking rates are below average, California has about one-eighth of the U.S. population and close to that fraction of the hundreds of thousands of people estimated to get sick or die each year from smoking-related causes.

As a result, there has been no shortage of potential California plaintiffs--only of lawyers willing to invest the time and money needed to battle the tobacco companies. . Only about 65 lawsuits by individual smokers are pending in California now, but if the four victories to date survive appeals, experts say, a flood of filings is likely. Several hundred suits by individual smokers are pending nationwide.

Others question whether juror hostility is an isolated West Coast phenomenon, noting that so few cases have been tried in other areas that it's difficult to know.

In 50 years of tobacco litigation, barely more than 50 individual suits have been tried to verdicts--with hundreds more abandoned by plaintiffs or dismissed before trial.

Although only four cases have been tried in California since 1999, only one state, Florida, has tried as many. And at times the industry has shown some vulnerability where least expected.

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