Many industries have earned disdain from the U.S. public over the years. Big banks, Wall Street, and the cable and cell phone companies probably didn't waste a lot of man-hours opening Christmas cards from their customers this year. One industry, however, has a decades-long distinction of public disaffection - big tobacco. Lawsuits against big tobacco began in the 1950s when medical experts first suggested that smoking causes lung cancer and other serious health conditions. Big tobacco companies fought back with force and won most of the lawsuits, claiming that not only were smokers assuming the risks when lighting up, but also that there was no proof that smoking was the sole cause of cancer.
Thirty years later, another wave of lawsuits claimed that not only were cigarettes harmful and addictive, but tobacco companies knew it and didn't disclose the information to the public. Once again, the tobacco companies were able to fight off the lawsuits.
The third wave of suits came in the 1990s and plaintiffs began to find themselves on the winning side in part because documents were leaked showing that big tobacco companies were aware of the addictive properties of tobacco. The first big win came in 2000 when a California jury awarded $51.5 million to a smoker with terminal lung cancer.
The First Big Settlement
November 1998 was a defining moment against smoking industry; attorneys general of 46 states settled a case that accused big tobacco of producing a product that contributed to health problems that created significant costs for public health care systems. Under the terms of the settlement, big tobacco could no longer engage in certain advertising practices, had to make annual payments to the settling states to compensate for health care related costs with a minimum payment of $206 billion over the first 25 years, and other concessions that included dissolving the three biggest industry organizations.
In 2000, a Miami, Florida jury ordered big tobacco to pay $145 billion in damages to sick Florida smokers following a class action suit. Soon after, big tobacco went on record saying that the award would be thrown out. They were right. A 2006 Florida Supreme Court ruling threw out the $145 billion award and ruled that each case would have to be tried on its own merits, which should have been a big win for the tobacco industry; however, another part of the ruling, could be a big loss.
Part of the Supreme Court's ruling said that the findings of the lower court could be used as fact in later cases. This meant that plaintiffs suing big tobacco in later cases would not have to prove that tobacco companies hid the risks of smoking, sold a dangerous product, and were, overall, negligent. All the plaintiffs had to do was prove that they were addicted to cigarettes and that smoking caused their illness or death.
This has resulted in the filing of more than 8,000 lawsuits and at least $360 million in awarded damages; so far only a small fraction of those cases have been tried. Attorneys for big tobacco companies argued, but failed to prove, that the way the state courts were handling the cases was unlawful.
In 1999, under former President Clinton, the U.S. Department of Justice filed suit against the largest tobacco companies alleging that the companies conspired to mislead the public on health problems associated with smoking for more than 50 years.
In 2006, Judge Gladys Kessler ruled in favor of the plaintiffs and found that big tobacco conspired to mislead the public. Through a series of appeals, the original presiding judge's ruling stood and since the Supreme Court declined to hear the case, the verdict is considered final.
In November of 2012, Kessler ruled that tobacco companies would have to advertise that they lied to the American public. According to NBC News, each advertisement has to begin with a statement saying that a federal court has concluded that tobacco companies "deliberately deceived the American public about the health effects of smoking."
Also included in the ruling are a series of statements to be included in the ads. Some of these include, "smoking kills, on average, 1,200 Americans every day," and "when you smoke, the nicotine actually changes the brain - that's why quitting is so hard."
The Bottom Line
Through the many thousands of lawsuits, big tobacco companies still survive although some believe that as the health effects of smoking become clearer, it will be increasingly difficult for them to have, bright long-term futures. Others believe that since big tobacco has survived so many lawsuits, nobody should worry about their viability.