Fla. Jury Orders Reynolds to Pay Smoker $260,000

Source from:  Journal Now 02/16/2011

A high-profile "Engle" smoker's lawsuit verdict went against R.J. Reynolds Tobacco Co. on Friday. But Reynolds is being required to pay just a fraction of the $10 billion in damages sought by a Florida attorney, Willie Gary, who has a reputation as a "giant killer" in trials involving corporations. A six-person jury in state court in Tampa, Fla., awarded $10,000 in compensatory damages and $250,000 in punitive damages to Leroy Kirkland, 71, who said he became ill after decades of smoking Pall Mall and Salem cigarettes. Reynolds acquired the U.S. rights to the Pall Mall brand as part of its 2004 purchase of Brown and Williamson Tobacco Corp. It has not decided whether to appeal the verdict. The Engle cases have been scrutinized closely since they sprang from a decision in 2006 by the Florida Supreme Court that decertified a class-action lawsuit initially filed by Howard Engle. The 2006 ruling allowed former class members to file individual lawsuits stating that cigarettes caused their respective illnesses. The cases involve consumers who smoked before a law went into effect requiring warning labels on cigarette packaging. In most Engle lawsuits, the plaintiff bears some of the responsibility for their illness or death, which reduces compensatory and punitive damages to manufacturers. Gary entered the trial in late January expecting to add another trophy victory. On his website, Gary touts that he has handled more than 150 cases in which he gained damages in excess of $1 million, including a $500 million verdict against a funeral-home chain in a contract dispute and $240 million over claims that Walt Disney Co. stole his clients' theme-park idea. "This is it," Gary told Bloomberg News in January when discussing his confidence in getting the jury to slap Reynolds with more than $1 billion in punitive damages. "I feel it in my bones." On Monday, he told the Winston-Salem Journal that Reynolds "dodged a bullet because the jury was ready to go for the big money with punitive damages. They wanted it to go to charity, not the client." The $10 billion punitive-damages target would have been more than half of Reynolds' $19.05 billion in market capitalization. "The jury might have been troubled by the industry's conduct, but they showed that they did believe in personal responsibility," said Stephen Kaczynski, a lawyer for Reynolds. In July, the 11th U.S. Circuit Court of Appeals ruled that plaintiffs bringing an Engle case before a federal court would have to individually prove two pivotal elements: ·The cigarettes smoked by those involved in the case were defective. ·The manufacturer withheld information, keeping the smoker from fully understanding the potentially addictive and defective nature of the cigarettes. Smokers have won 22 of 33 verdicts, said Edward Sweda Jr., the senior attorney for the Tobacco Products Liability Project, which tracks the suits. The largest amount of punitive damages against Reynolds in an Engle lawsuit has been $72 million. That jury also awarded $8 million in compensatory damages. Reynolds is appealing that verdict. Since July, manufacturers have won at least 10 of 12 jury verdicts. Jeff Middleswart, the portfolio manager of USA Mutuals Vice Fund, said he was not surprised Gary failed to reach his damages goal given the precedent among the Engle trials. He said that the punitive damages likely would fall on appeal. Gary said he's preparing to handle at least 500 more Engle cases. Although acknowledging the Kirkland case was not his most promising, he said he still gained confidence because "we were supposed to have lost it." "We will be doing cases in North Carolina eventually, making Reynolds defend on its home court," Gary said. Enditem