US court slaps record penalty on tobacco firms

US court slaps record penalty on tobacco firms
AGENCIES

MIAMI, JULY 15: A six-member jury in Florida yesterday awarded punitive damages of $ 145 billion on a suit against the country's five largest tobacco companies, in the largest monetary penalty in U.S. history. After a trial lasting for more than two years, judge Robert Kaye read out the verdict reached after five hours of deliberations. The damages will go to about 700,000 sick Florida smokers who had brought the class-action suit, the first against the tobacco industry.

The plaintiffs had asked for record-breaking punitive damages of between $ 123 billion and 196 billion dollars from the companies for making smokers sick.

The damages were divided between the five companies with tobacco giant Philip Morris bearing the highest penalty of $ 73.9 billion dollars. Philip Morris markets Marlboro, the world's most popular cigarette.

R.J. Reynolds, maker of Winston cigarettes, was slapped a penalty of $ 36.3 billion. Brown and Williamson was told to pay $ 17.5 billion, Lorillard Tobacco $ 16 billion and the Liggett group $ 790 million.

Predictably, the companies have denounced the verdict, calling it ``excessive and illegal, bearing no relation to reality''. The combined net worth of the tobacco majors stands at just over $ 15 billion while what they have to pay in damages is nearly nine times that amount.

Company lawyers said every smoker who claims part of this money will have to prove in court that his/her health has been affected by smoking, a long and tedious process which could take up to 75 years.

Morris' counsel predicted victory on appeal, saying many other US juries have rejected claims by smokers because ``they believe smokers have knowledge and awareness of the risks of smoking and are legally responsible for those choices''.

Philip Morris attorney Dan Webb said he was confident the judgment would be overturned on appeal and said the jury award would have ``no practical impact.'' He said: ``Even if that verdict becomes final decades from now, Philip Morris is extremely confident that this case will be overturned on appeal.''

``You've got to try 700,000 cases before a judgment can be entered in this case,'' Webb said.

The anti-smoking lobby, led by first lady Hillary Rodham Clinton, termed the jury decision ``entirely warranted''. The American Cancer Society said over $ 50 billion is spent annually in health costs to treat smokers suffering from cardiovascular, cancer and lung diseases.