Florida tobacco cases could still go on for years

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, , ) . The suit accused tobacco companies of misleading the public about the dangers of smoking. A Miami jury slapped the companies with the punitive damages in 2000. Three years later, Florida's Third District Court of Appeal set aside the decision and decertified the class. The state's high court agreed to hear the plaintiffs' appeal in 2004 and heard oral arguments in November of that year. See full story.

Edward Sweda, senior attorney for the Tobacco Products Liability Project, said the Sunshine State panel's decision "is inviting the Florida plaintiff's bar to get onto the playing field."

The court found that cigarette manufacturers are negligent and that their products are defective, unreasonably dangerous and addictive, he continued, and that will carry over to individual claims by upwards of 100,000 class members.

"At trial, these class members will need only prove individual medical causation and reliance on any acts of fraud that may be alleged," he said. "We expect tens of thousands of streamlined cases to be filed in Florida by this time next year."

William Ohlemeyer, associate general counsel for Philip Morris USA, doesn't expect them to have much luck. He spoke to reporters after the verdict on Thursday.

"In decertifying the class, the court made it clear that former class members can now proceed only in individual trials, in which each individual plaintiff will have to prove liability on the part of the defendants including, among other things, that their use of a company's cigarettes caused their illness and that the company's conduct prevented them from making an informed choice to smoke," he said.

He added that the company's lawyers will decide after more analysis of the opinion "on which issues to seek further appellate review," but rejects analyses like Sweda's as "wrong on the law, wrong on the facts and, frankly, disingenuous."

Wall Street seems to be siding with the defendants. Tobacco stocks moved up sharply following the ruling, which should also release hundreds of millions of dollars back to the industry that had been held as bond..

"We do not believe [the] decision changed the landscape for the tobacco industry regarding a major threat from individual lawsuits in Florida," wrote CitiGroup's Bonnie Herzog. While there were about 700,000 plaintiffs included in the class action, "we believe a very small percentage . . . will actually pursue a claim against the industry or a particular company."

She likened it to a previous case involving 100,000 plaintiffs where only 3,800 individual cases were filed with half of those dismissed outright.

"Of the individual cases left over, only seven cases have been tried, and the industry has received favorable rulings in six out of the seven trials," she added.

Herzog expects the relevant part of the Engle ruling to be appealed to the U.S. Supreme Court and if it is upheld, "we remain confident that very few of these trials will actually make it to a courtroom over the next several years. We continue to view individual cases as having very little headline risk or impact..."

For Marc Greenberg of Deutsche Bank, "the permission of individual cases, while not our 'perfect world' decision, is easier said than done."

Not only can companies like Altria appeal certain issues to and limit the number of individual claims filed, "these are very difficult and expensive to try, and therefore risky to both lawyer and plaintiff."

A "flurry may get filed, but we would expect fewer to go to trial, and those would take years," he added.

Sandra Ezell is managing partner of the Richmond, Va. office of Bowman and Brooke. She specializes in defending manufacturers from product liability suits but has not worked for the tobacco industry, although her firm has.

After looking at the Engel decision, she sees the individual cases going on for years, a barring some kind of tort reform.

"These cases are not going to go away but plaintiffs are going to have to work a lot harder. It is a lot easier to try one case than 700,000," she said, meaning "a lot fewer cases and [plaintiff's lawyer's] will be more selective."

And she likes the industry's chances in them: "When you force plaintiffs to try their case on an individual basis, the right tends to occur more often."