Editorials

The Engle verdicts and tobacco litigation

Incriminating documents drive the lawsuits, but destination remains uncertain

Education and debate p 366

It may be portentous that the $145bn in punitive damage verdicts against the American cigarette manufacturers were handed down by the jury in the Engle class action on 14 July. ^{1 2} The industry's lawyers alternatively characterised the verdicts as a mortal threat to the industry or as a legal chimera, certain to evaporate when tested on appeal. We will not know whether these verdicts were the tobacco industry's death knell until the Florida Supreme Court rules, perhaps two years from now.

The punitive awards for damages were actually the third round of verdicts that the Engle jury lobbed at the tobacco industry. A year earlier the jury found that cigarette smoking caused 20 diseases, and that the five cigarette manufacturer defendants, individually and in conspiracy with each other and two trade groups they had created, committed a variety of torts including fraud and fraudulent concealment. Then, in April 2000 the jury found the defendants liable to three individual class members, rejecting the industry's claim that two of them had a rare form of lung cancer not related to smoking and that the third developed his throat cancer from wood dust rather than his years of smoking. The jury awarded the plaintiffs compensatory damages for medical expenses, lost wages, and pain and suffering averaging more than $4m each. Extrapolated to the 500 000 or more ill or dead Florida smokers estimated to be in the class, the industry's obligation just to Florida smokers could conceivably exceed $2 trillion.

Unlike the tobacco industry's settlements with the states, which it can meet with annual payments averaging $10bn/year in perpetuity, legal judgments after jury verdicts are fully payable once appeals have been exhausted. Even so, if the industry's only legal liability were for the $145bn Engle punitive damage award, it could probably borrow the money to pay it off, financed by a modest price increase in its products.³ But it certainly could not pay $2 trillion. More generally, compensating the 95% of Americans afflicted with disease caused by tobacco who are not Florida residents at just 10% of the rate adopted by the Engle jury in its individual verdicts would leave the industry with a multitrillion dollar liability that would mean bankruptcy.

Nor can Engle remain solely a Florida phenomenon. Unless Engle is quickly reversed, courts in other states will be called on to provide their residents with similar rights to recover from the tobacco industry. Indeed, in the week following the verdicts for punitive damages public health groups in Australia, Britain, and Canada publicly called for similar action in their countries, and the health minister of Italy proposed to sue cigarette manufacturers for damages to health.⁴

What has changed the litigation dynamic in the Engle class action and in successful individual cases in California and Oregon, and has brightened the prospects for such litigation worldwide, is the widening availability of incriminating internal documents from the industry.⁵ The Engle jurors pointed to these documents to explain and justify their gigantic verdicts. Indeed, jurors generally seek to interpret the cases before them as morality plays. When the documents have been introduced, jurors see the defendants as greedy, callous, deceptive, and manipulative and rule for the plaintiffs, often awarding punitive damages to boot. When the documents have not been admitted into evidence, however, jurors continue to characterise the plaintiffs as weak willed, head in the sand, and hedonistic, and hence rule against them.

Although the documents were unearthed largely as a result of litigation brought by state attorneys general in the United States, they provide evidence of a worldwide conspiracy. The article in this issue by Francey and Chapman uses these materials to show how, two decades after the cigarette manufacturers first hatched their American disinformation campaign in New York's Plaza Hotel, they met at an estate in Berkshire in England to replicate the campaign for the rest of the world (p 366).⁶ This evidence will be useful for litigation everywhere. Similarly, evidence from these documents apparently played a part in the European Commission's announcement last month that it plans to sue in the United States alleging involvement by American cigarette makers in European smuggling.⁷

In the face of potentially bankrupting litigation in the United States and abroad, tobacco companies will probably once again seek relief through congressional legislation granting them legal immunity. The industry would probably agree to jurisdiction from the Food and Drug Administration, and other concessions, to secure such legislation. The public health community needs to begin informed, inclusive, and intensive discussions about how to remain cohesive and effective in responding to possible bankruptcy, "global settlement," and other "endgame" scenarios.

Richard A Daynard, professor of law. 

Northeastern University School of Law, 400 Huntington Avenue, Boston, MA 02115, USA (rdaynard{at}lynx.neu.edu)