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Archive for the ‘Tobacco’ Category
Federal Judge Blasts RJ Reynolds for Providing a “Wholly Inaccurate Description of the Trial Record” and Upholds Multi-Million Dollar Verdict
Tuesday, August 30th, 2011
For Immediate Release Contact: Edward L. Sweda, Jr. (617) 373-8462
U.S. District Court Judge Stefan R. Underhill on Friday denied R.J. Reynolds’ motion for a new trial or for judgment as a matter of law in the case of Izzarelli v. R.J. Reynolds Tobacco Co. Barbara Izzarelli smoked Salem King cigarettes for 25 years until she was diagnosed and treated for larynx cancer at the age of 36. On May 26, 2010, a Connecticut jury determined that RJR was 58% responsible for her injuries and that Ms. Izzarelli was 42% responsible for her injuries.
An amended judgment, which includes punitive damages ($3,970,289.87) and interest, amounted to $28,079,629.27. Ms. Izzarelli is represented by Silver, Golub & Teitell of Stamford, CT. The firm’s telephone is 203-325-4491.
Judge Underhill concluded his ruling as follows: “R.J. Reynolds’ motion for a new trial or for judgment as a matter of law raises a myriad of claims, issues and arguments. Many of the assertions made in support of its motion fail the straight-face test and rely on a wholly inaccurate description of the trial record. Although this ruling does not address every one of R.J. Reynolds’ arguments, I have considered them all and find them to be meritless. Accordingly, R.J. Reynolds’ motion for judgment as a matter of law, or in the alternative for a new trial, is denied.”
Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project (TPLP) based at Northeastern University School of Law in Boston, described Judge Underhill’s ruling as a “resounding repudiation of R.J. Reynolds’ legal arguments and distortions of the trial record.”
The ruling is available for download from tobacco-on-trial.com
Shareholder meeting report – Altria Group CEO Michael Szymanczyk: An artful dodger
Thursday, May 26th, 2011
By Edward L. Sweda, Jr., Senior AttorneyRICHMOND, VA. – Just eight days before the Altria Group, Inc. 2011 Annual Shareholders Meeting in this historic city, Altria Group’s former Chief Executive Officer, Louis Camilleri, complicated matters for his successor. At the Philip Morris International Annual Shareholders Meeting in New York City on May 11, 2011, Camilleri answered a question from a shareholder who is also a nurse who has treated many smokers with serious diseases. While admitting that smoking is addictive, Camilleri added the comment that “it is not that hard to quit” using tobacco products. That comment made international headlines after the Associated Press reported it.
So, when Altria Group’s Szymanczyk gave management’s report at the meeting in Richmond on May 19th, he specifically, on page 10 of his prepared remarks stated: “Because tobacco use is addictive and it can be very difficult to quit, our tobacco companies help connect adult tobacco consumers who have decided to quit with cessation information from public health authorities.”
During the question and answer session, shareholder Rev. Michael Crosby of the Interfaith Center for Corporate Responsibility and I both pressed Szymanczyk to state whether, as Altria Group’s CEO, he disagreed with Camilleri’s comment and, if so, why. Refusing to do so, he stated that “I would simply say that what I said is on our website. There is nothing new here.” The juxtaposition between the public statements of two tobacco executives just six days apart was the central focus of the Richmond Times-Dispatch article on the meeting.
I also pressed Szymanczyk on the issue of the ongoing Engle Progeny trials taking place in Florida. Noting that 30 out of 43 (now, as this report is written, 32 out of 46) such trials resulting in verdicts have seen jurors return plaintiff verdicts, I asked whether Altria Group, for the sake of its shareholders, would abandon its no-settlement policy regarding the thousands of Engle Progeny cases remaining throughout Florida. His response was simply to refer shareholders to the company’s 10Q form, which restates its standard policy of refusing to settle these cases.
Virginia shareholder Anne Morrow Donley, citing studies from March 2011 which showed that a fetus subjected to secondhand smoke is at a higher risk of stillbirth, lower birth weight and lower birth length , asked Szymanczyk whether he would publicly advise smokers not to smoke around women of child-bearing age. His response was to acknowledge that pregnant women should not be exposed to secondhand smoke, but he refused to broaden that recommendation to include women of child-bearing age.
Cathy Rowan, representing shareholder Trinity Group, noted Altria Group’s willingness to address concerns about implementing internally agreed upon code upholding the human rights of tobacco farm workers and about ensuring that the company’s suppliers are enforcing those rules. Altria Group’s cooperation with shareholders following a 2009 vote of shareholders where 25% supported a resolution to protect the human rights of farm workers stands in contrast to the rigid opposition by the management of Reynolds American, Inc. to similarly worded resolutions.
In his prepared remarks, Szymanczyk also bragged about Altria Group’s donations to various charitable and civic organizations, including the Boys and Girls Clubs, 4H, as well as the Virginia Museum of Fine Arts, the Kennedy center and the National gallery of Art. He boasted that “Altria made nearly $50 million in cash and in-kind corporate contributions to non-profit organizations” in 2010, without noting that the $50 million figure represented just 0.205% of the company’s net revenues ($24.363 billion) in 2010.
A shareholder resolution was offered, calling on the Board of Directors to move “to ensure that Altria stops the production of any of its tobacco products with characterizing flavoring added, as well as their distribution and marketing, unless and until it can be proven by independent and evidence-based research that such added characterizing flavors do not contribute significantly to youth initiation of tobacco use.” That resolution was defeated, with 97.5% of shares voting NO, with 2.5% voting YES.
At a Richmond restaurant after the 2011 Altria Group, Inc. Annual Shareholders Meeting. From left to right: Anne Morrow Donley, Rev. Michael Crosby, Cathy Rowan and Edward L. Sweda, Jr.
Reynolds American, Inc. “takes step” and remains rigid at shareholder meeting
Tuesday, May 17th, 2011
By Edward L. Sweda, Jr., Senior Attorney
WINSTON-SALEM, N.C. – On Thursday, May 5, 2011, I made my way to this historic city via the Winston-Salem Express. Friday morning at 9:00 A.M. sharp was the scheduled start of the 2011 Annual Meeting of Shareholders of tobacco giant Reynolds American, Inc. (RAI).
Beautiful sunny skies greeted everyone in Winston-Salem on Friday morning. Having just walked into the lair, i.e. RAI’s corporate headquarters, I noticed an intriguing sign by the registration desk: “As a courtesy to non-smoking guests, the Annual Meeting will be a non-smoking event.” Not in any way a matter of health but, rather, a “courtesy.”
A Corporate Shift?
The 2011 Annual Shareholders Meeting of Reynolds American, Inc. (RAI) took place on a day when Daniel Delen, who took over as chief executive and president of the company in March, made what was billed as a major pronouncement. Noting the findings of a major study entitled “A State of Fear: Human Rights Abuses in North Carolina’s Tobacco Industry,” by Oxfam America and the Farm Labor Organizing Committee, AFL-CIO (FLOC) of the conditions under which tobacco farm workers in North Carolina do their work in the fields, Mr. Delen proposed that a multi-party council be formed to address these labor issues. Additionally, he publicly pledged to use an independent, third-party monitor to analyze the issue of the conditions under which these workers labor at U.S.-based farms that supply essential product to RAI.
A front-page article in the May 7, 2011 edition of the Winston-Salem Journal, entitled “Reynolds American Takes Step,” quoted Rev. Michael Crosby of the Interfaith Center for Corporate Responsibility: “I see a glimmer of hope on an issue we have been raising for a number of years. For your willingness to participate with stakeholders, I sprinkle holy water on you. Yet, because these discussions are going on at the highest levels with Altria and Philip Morris International, I would urge you to take the same level here.”
Mr. Delen’s promises, which will be put to the test in the upcoming weeks and months, stand in contrast to the public position of previous C.E.O. Susan Ivey, who insisted that RAI had no responsibility to take steps to improve working conditions of farm workers who labor under often unsafe working conditions on farms run by Reynolds’ suppliers.
Response to Litigation – More of the Same
However, on the litigation front, RAI management is as rigid as ever. During the question and answer session, to which RAI allotted all of 25 minutes – fully ten minutes more than at the 2010 Annual Shareholders Meeting – I addressed the major legal problems that R.J. Reynolds Tobacco Co. is facing in the Engle Progeny litigation in Florida. Shareholders are allowed up to two minutes to ask a question (a video board at the front of the meeting room featured a large numeric countdown from “2:00” once a shareholder began to speak); I mentioned that since February 2009, there have been 43 Engle Progeny trials that have reached a verdict and that 30 out of those 43 have been plaintiff verdicts. Just a week before the shareholders meeting, a jury in Jacksonville, where a disproportionately large number of the remaining 8,000 to 9,000 lawsuits yet to be tried are located, hit RAI with a $17 million punitive damages award. Furthermore, the company is appealing its multi-million dollar loss in the Martin case and must prevail in an uphill climb to convince the Florida Supreme Court to reverse its own 2006 landmark ruling in the Engle class-action case.
I concluded my remarks by asking whether the company, for the good of its shareholders, would move away from its current policy of refusing to settle these Engle Progeny cases.
Mark Holton, RAI’s Executive Vice President and General Counsel, responded by reiterating the company’s stated opposition to settling any of these cases and said that he was “confident that the Engle process violates due process” and that the company’s legal arguments are strong and would ultimately prevail. Though no follow-up questions are allowed, I commented that “the risk [for the company] is there.”
Shareholder Resolutions
Two important shareholder resolutions called on the company to address concerns regarding tobacco flavoring and to create human rights protocols for the company and its suppliers.
Flavorings
Noting that the U.S. Food and Drug Administration has found that the smoking of flavored cigarettes is more popular among youth than among adults, the proponents offered this resolution “that, because youth initiation of tobacco products is influenced by the flavoring, shareholders request that, within six months of Reynolds American Inc.’s annual meeting, the Board of Directors move to ensure that RAI stops the production of any of its tobacco products with such flavoring added, as well as their distribution and their marketing, unless and until it can be proven by independent and evidence-based research that such added flavors do not contribute to youth initiation of tobacco use.” Father Michael Crosby introduced the resolution while Anne Morrow Donley of Virginia seconded it (their remarks were limited to two minutes each).
RAI management, of course, opposed the resolution, falling back on the contention that the “flavorings utilized on our operating companies’ tobacco products are legally permitted.” The resolution was defeated with 3 million shares being voted “Yes” with 397 million “No.”
Human Rights
A major threat to the health of tobacco farm workers is Green Tobacco Sickness (GTS), which occurs when the skin absorbs nicotine after touching the tobacco plants. Another significant concern regarding Reynolds American, Inc. is that it receives leaf from Malawi, a country in which child labor in tobacco fields takes place.
This resolution stated that “shareholders request Reynolds American Tobacco Inc. Board of Directors to commit itself to create effective procedures to implement protocols ensuring basic worker rights consistent with internationally agreed-upon human rights conventions in the countries which supply its tobacco and to find ways to ensure, through truly independent monitoring, that its varied suppliers are enforcing these protocols as well as all other pertinent laws of the nations in which its suppliers operate.”
Father Crosby introduced the resolution while I seconded it. RAI’s opposition to this resolution attempted to pass off any responsibility on this issue onto the already overburdened regulatory apparatus of state and federal governments in the United States. Management also claimed that “RAI and its operating companies strive to comply with all laws and regulations.” In my allotted two minutes, I noted that, as an individual, I do not “strive to comply with laws, I comply with laws.” I noted that, while there would be serious consequences for me if I failed to comply with laws, there seem to be no consequences for RAI or its suppliers failing to comply with basic laws and regulations governing worker health and safety.
The resolution was defeated, having received 39 million shares voting “Yes”, with 361 million “No.”
Company Propaganda
Outside the auditorium where the meeting took place, RAI provided shareholders with copies of the company’s publications, one of which is a 33-page brochure entitled “Our Continuing Commitment,” the 2010 Corporate Social responsibility Report. On page 23 of the report, RAI informs its shareholders that “[d]uring the past four years, the American Snuff Co. Charitable Trust has contributed $40,000 to a campaign by Methodist Healthcare Foundation to build a 30-patient hospice residence for terminally ill people of all ages…” ,
Smoke-free facilities and public places
I was encouraged to see signs such as this one on the front door of the hotel in which I was staying in Winston-Salem.
- and this one at a public park in Greensboro
As mentioned above, the shareholders meeting was entirely smoke-free.
To cap off my trip to North Carolina, on Friday night I attended a South Atlantic League baseball game between the Hickory Crawdads and the host Greensboro Grasshoppers. The game, won by Hickory 7-2, was played at NewBridge Bank Park, a smoke-free park.
Philip Morris and RJ Reynolds hit by $40 million verdict in Florida this week
Friday, April 29th, 2011
FOR IMMEDIATE RELEASE
Contact: Edward L. Sweda, Jr. or Mark Gottlieb 617-373-8462 or 617-373-2026
A Jacksonville, Florida jury this week assessed $34 million in punitive damages against tobacco giants Philip Morris and R.J. Reynolds Tobacco Co. for their reprehensible misconduct in the case of Andy Allen v. R.J. Reynolds Tobacco Co., et al. This award followed a compensatory damages award of $6 million for the family of Patricia Allen, who died of chronic obstructive pulmonary disease (COPD) after having smoked for 36 years. Ms. Allen, who was born in 1948, started smoking in high school at a time when the tobacco companies were targeting teenage girls, according to Allen family attorney Keith Mitnick of Morgan & Morgan.
Edward L. Sweda, Jr., senior Attorney for the Tobacco Products Liability Project (TPLP), a project of the Public Health Advocacy Institute, based at Northeastern University School of Law in Boston, was delighted with the jury’s verdict. Noting that the jury “expressed appropriate and justifiable outrage at the reprehensible misconduct of these tobacco companies,” Sweda applauded the verdict, which was the third highest among the 30 plaintiff verdicts of the 43 Engle Progeny trials that have reached a verdict since February 2009.
It is also significant that this huge plaintiff victory occurred in Jacksonville, since approximately 4000 Engle Progeny cases are pending in state and federal court in Jacksonville.
TPLP Executive Director Mark Gottlieb said, “these trials stemming from the Engle class action suit of the 1990s disrupt business as usual for cigarette companies as juries continually find them liable at an astaunding rate.”
$17.3 million verdict against Lorillard in Jacksonville, FL
Wednesday, March 2nd, 2011
FOR IMMEDIATE RELEASE
Contact: Edward L. Sweda, Jr. or Mark Gottlieb (617)373-8462 or (617)373-2026
A jury awarded the family of a smoker who died of lung cancer in 1994 at the age of 63 a total of $6 million in compensatory damages. The jury assessed Lorillard Tobacco Company 65% responsibility for the death of Jacqueline Miller and 35% to Ms. Miller. This means that the compensatory damages award will be reduced by 35% while the punitive damages award will not. Therefore, Lorillard is liable for $15.2 million plus interest for the wrongful death.
Starting smoking while in high school in the 1940s, two decades before health warnings appeared on cigarette packages, Jacqueline Miller smoked Lorillard’s brands Old Gold, Kent and Max. The lawsuit was brought by her daughter, Michelle Mrozek. The case is: Mrozek v. Lorillard.
Representing the family is Attorney Bruce Anderson of the Jacksonville law firm Terrell Hogan.
Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project (TPLP), which is based at Northeastern University School of Law in Boston, was delighted with today’s verdict. “Once again, a Florida jury has heard all the evidence in a tobacco trial and rendered a significant verdict for the plaintiff on behalf of a woman who was clearly addicted to nicotine, right up until her death from lung cancer. In addition, and not surprisingly, the jury assessed punitive damages as well to punish and deter Lorillard’s reprehensible conduct .”
Of the Engle Progeny trials that have reached a verdict, 25 out of 36 such verdicts have been for the plaintiffs.
Florida jury Returns multi-million verdict against tobacco companies
Thursday, February 24th, 2011
FOR IMMEDIATE RELEASE -
Contact: Edward L. Sweda (617-373-8462) or
Mark Gottlieb (617-373-2026)
A jury in Gainesville, Florida today assessed punitive damages in the amount of $1.5 million against R.J. Reynolds Tobacco Co. (RJR) and another $1.5 million against Philip Morris (PM) in an Engle Progeny case. The same jury on Tuesday night awarded the family of John Huish $750,000 in compensatory damages, attributing 25% fault to RJR, 25% to Philip Morris and 50% to Mr. Huish. So, The compensatory damages award will be reduced by 50%.
Of the 35 Engle Progeny trials that have reached a jury verdict since February 2009, 24 have been plaintiff verdicts (69%).
Mr. Huish, who died of small-cell lung cancer in 1993 at the age of 64, had started smoking two decades before warning labels appeared on cigarette packs. He started smoking Lucky Strikes, followed by Camel, Chesterfield, Marlboro and then Marlboro Lights. Mr. Huish’s widow, Anna Louise Huish, brought the lawsuit and is represented by the West Palm Beach firm of Searcy, Denney, Scarola, Barnhart & Shipley. Attorney James Gustafson can be reached at 800-780-8607.
Senior Attorney for the Tobacco Products Liability Project at Northeastern University School of Law (TPLP), Edward L. Sweda, Jr. was delighted with the verdict: “This jury was justifiably appalled by what it learned about the tobacco companies’ outrageous misconduct during the decades that John Huish was an addicted customer. Someone who is not addicted would not have smoked two or more packs per day for 46 years, as Mr. Huish did before succumbing to lung cancer.”
TPLP Director Mark Gottlieb noted that, “Jury after jury of ordinary folks have found the way that cigarette makers conduct their business is deserving of punishment. With thousands of these cases in the pipeline in Florida, it’s going to be a long slog for Philip Morris and R.J. Reynolds.”
The Tobacco Products Liability Project is a project of the Public Health Advocacy Institute (PHAI) at Northeastern University School of Law in Boston, MA. PHAI is an independent federally recognized non-profit charity.
PHAI’s Gottlieb supports smoke-free parks in Cambridge Chronicle Guest Commentary
Tuesday, February 22nd, 2011
On February 21, 2011, the local Cambridge newspaper, the Cambridge Chronicle, published a guest opinion piece by PHAI’s executive director supporting efforts to prohibit smoking in public parks in that city. A similar proposal is pending in Boston and New York City passed one earlier this month.
Gottlieb’s commentary can be seen here. He mentions 3 primary reasons for supporting the initiative: 1) health; 2) behavior modeling; and 3) litter reduction.
A list from Americans for Non-Smokers’ Rights of nearly 500 cities and towns that prohibit smoking in parks can be found here (pdf).
Eurpoean Commission Publishes PHAI Collaboration on Tobacco Liability and the Health Costs of Smoking
Tuesday, February 15th, 2011
In December, 2009, PHAI, working under a contract to GHK along with Dr. Amandine Garde of Durham Law School (U.K.), produced a Report to the European Commission on the topic of tobacco liability and the health costs of smoking which has just been published by the Commission.
It is hoped that the Report will encourage the Commission to consider legal and regulatory means to recover the health care costs caused by tobacco products from their manufacturers. The fact that the Commission has published the Report can be interpreted as a positive sign.
Download the Report (pdf) here.
Minnesota Court Of Appeals gives green light to “light” cigarette class action lawsuit against Philip Morris
Tuesday, December 28th, 2010
FOR IMMEDIATE RELEASE
Contact: Edward L. Sweda, Jr. or Mark Gottlieb (617) 373-8462 or (617) 373-2026
Class is certified; consumer protection law claims are reinstated since they establish “public benefit;” claims not barred by Minnesota’s 1998 settlement with tobacco companies or by 2009 federal legislation; claims not barred by statute of limitations.
The Minnesota Court of Appeals today issued a “resounding victory” for a class of Minnesota smokers of Marlboro Light cigarettes, according to Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project (TPLP), which is a project of the Public Health Advocacy Institute (PHAI), based at Northeastern University School of Law in Boston.
In a the case of Curtis, et al. v. Altria Group Inc. and Philip Morris, Inc., which was filed in 2001, the plaintiffs allege that Philip Morris engaged in a decades-long pattern of “false advertising, consumer fraud and deceptive trade practices regarding ‘light cigarettes in violation of Minnesota consumer-protection statutes.” As class certification in similar “light” cigarette lawsuits in Missouri, Massachusetts and New Hampshire has been upheld, the Minnesota Court of Appeals today affirmed the district court’s certification of the plaintiff class, noting that the district court “found that all members of the class have been similarly injured by Philip Morris’s alleged lengthy course of prohibited conduct. And the record supports this finding.”
Sweda also was pleased that the Court of Appeals rejected Philip Morris’s contention that Minnesota’s 1998 settlement with the major tobacco companies barred this lawsuit, which was brought on behalf of individual consumers, not the state of Minnesota. Importantly, the Court of Appeals ruled that the public-benefit requirement of the claims “is met in this case,… by the fact that Philip Morris made allegedly false representations to the general public, and we reject the argument that prior action by the attorney general deprives this lawsuit of public benefit.”
“Now that this important consumer-protection lawsuit can proceed, I look forward to it going to the trial in the near future,” Sweda concluded
The decision can be read here.
#30
Boston jury delivers $81 million punitive damages verdict against Lorillard
Thursday, December 16th, 2010
FOR IMMEDIATE RELEASE
Contact: Edward L. Sweda, Jr. or Mark Gottlieb (617) 373-8462 or (617) 373-2026
A Suffolk Country jury, after finding Lorillard liable on December 14, 2010 for the wrongful death of a woman who was given free Newport cigarettes by the company as a child growing up in a Boston public housing project, today issued a punitive damages verdict of $81 million against the maker of Newports.
The jury heard testimony from an economist and an accountant who discussed the assets of Lorillard and its ability to pay. The plaintiff called forensic economist Robert Johnson who testified that Lorrilard’s net sales this year came out to about $81 million for a 5 day work week. He also noted that Lorillard was on track to make a profit of over a billion dollars this year. On cross-examination, Johnson was asked about presentations he has given at conferences organized by PHAI’s Tobacco Products Liability Project.
The defense called local certified public accountant, Robert H. Temkin, who suggested that Lorillard’s ability to pay was less than what Johnson suggested.
The defense’s closing argument, delivered by Shook, Hardy & Bacon’s Walter Cofer, told the jury that, although he shares a name with his grandfather, they are not the same man. Likewise, he reasoned, the Lorillard of today is not the same company that parked a truck next to a playground and gave free cigarettes to children.
The purpose of punitive damages is to punish bad conduct and deter future bad conduct. Cofer argued that that because the tobacco industry is now regulated the the U.S. Food and Drug Administration, the regulatory agency will ensure that no future bad conduct takes place. As for the punishment, Cofer analogized that it was sometimes necessary to “whack a mule on the rump” to get it moving in the right direction. But, he said, once that mule was heading the right way, there was no need to keep whacking it. Lorillard now admits that its products are addictive and deadly, so “whacking it again and again is not necessary.”
Michael Weisman of Davis, Malm & D’Agostine in Boston told the jury that just because Lorillard is now subject to new federal regulatory authority, it does not get them off the hook for what they did and what they do not now do, like make a serious commitment to keep kids from smoking today.
The jury was instructed by judge Elizabeth M. Fahey to consider the character, duration, and nature of Lorillard’s conduct; the actual harm to the victim in this case; the the magnitude of the harm to potential victims in the future. The jury retired to lunch and, about 90 minutes later, returned the verdict in the amount of $81 million, bringing the total liability in the trial to $152 million.
Judge Fahey has yet to rule on the question of Lorillard’s liability under Massachusetts consumer protection law, which could increase the defendant’s total liability. Lorillard is expected to seek a reduction in the amount in its post-trial motions. It will then likely appeal to the Massachusetts Appeals Couort, then the Massachusetts Supreme Judicial Court, and, if necessary, to the U.S. Supreme Court.
Mark Gottlieb, Director of the Tobacco Products Liability Project at Northeastern University School of Law, who was present for today’s hearing, noted that: “the total verdict of $152 million is currently the largest verdict in an individual smoking and health case. Larger verdicts in California and Florida were later reduced. The jury’s message to Lorillard was clear: ‘What was done to Ms. Evans was totally unacceptable.’ More cases involving addicting children with free samples will almost certainly be filed as a result of this case.”
Senior Attorney Edward L. Sweda, Jr., noted, “Today’s award of $81 million in punitive damages clearly reflects this American jury’s outrage at the predatory conduct of Lorillard Tobacco Company – conduct that was a legal cause of Marie Evans’ death from lung cancer at age 54.”
Plaintiff Willie Evans emerges from the courtroom after the verdict
