Big Tobacco's smoke screen

$145 billion verdict: Don't shed tears for cigarette companies

they haven't lost this one yet.

July 20, 2000

DESPITE THOSE banner headlines and breathless predictions by TV commentators of bankrupting Big Tobacco, that $145 billion jury verdict in Miami last week isn't the end of the world for cigarette companies.

Far from it.

For starters, the trial judge will almost surely have to slash that astounding jury award dramatically to comply with a Florida law prohibiting awards that might bankrupt a company.

Second, the two-year case seems ripe for appeals that might prove successful.

Third, it could be many years, perhaps even a decade, before the companies exhaust legal challenges to the verdict.

And finally, the tobacco companies can always pay off the judgment by sharply increasing the price they charge for cigarettes. Smokers, addicted to the habit, will still line up to buy another carton of their favorite brand -- regardless of the price.

No, this case has not driven a stake through the heart of cigarette manufacturers.

It has, though, sent an ominous message to tobacco executives, one that they ought to heed: Litigation against them continues to mount, and the price tag for maintaining business as usual is skyrocketing.

That $246 billion agreement with state attorneys general in 1998 -- spread over 25 years -- now looks like the beginning of courtroom payments, not the end of their troubles, as tobacco executives had hoped.

Anti-smoking drives are gaining momentum in Maryland and elsewhere in this country. The Miami jury verdict is likely to accelerate that trend.

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