RJ Reynolds has been ordered by a Florida jury this Friday to pay a total of $23.6 billion to the widow of a chain-smoker that had filed a suit against the company. It’s possibly the largest single plaintiff payout in history for a tobacco manufacturer to date.
Cynthia Robinson of Pensacola began the long process of suing the company in 2008. Her husband had died in 1996 of lung cancer after smoking between two and three packets of cigarettes per day for 18 years. It was claimed that her husband had become addicted to cigarettes and despite attempts had failed to manage to quit. She claimed that RJ Reynolds had conspired to conceal the addictive nature of cigarettes and had failed to highlight the dangers of smoking. Robinson’s lawyers also accused RJ Reynolds of being negligent in informing customers of the dangers pf the consumption of tobacco.
• The jury deliberated for 11 hours on Friday 18th July 2014 and the verdict returned granted compensation of $7.3 million to the plaintiff as well as $9.6 million to her husband’s child from a previous marriage.
• The jury went on to deliberate for a further 7 hours before it then awarded Robinson the punitive sum of$23.6 billion.
• Robinson’s lawyer stated: “RJ Reynolds took a calculated risk by manufacturing cigarettes and selling them to consumers without properly informing them of the hazards”.
• RJ Reynolds issued a statement calling the verdict “far beyond the realm of reasonableness and fairness”.
• The company also stated that the company is “confident that the court will follow the law and not allow this runaway verdict to stand,” adding that the damages were “grossly excessive and impermissible under state and constitutional law”.
• In the USA today there are still half a million people that die from cigarette-related illnesses every year.
• But, only 18% of US citizens actually smoke these days, which is a huge drop from the 42% of the 1960s.
Robinson argued that the verdict was not as RJ Reynolds states “a runaway verdict” but rather that the jury was courageous to take the decision. The jury refused to accept the argument used by RJ Reynolds that the victim had in fact smoked out of choice rather than addiction.
Originally Robinson had filed a lawsuit against the company as part of a class-action litigation that opened in1994 against tobacco firms. It became known as the “Engle Case”. At the time the verdict given in 2000 was also in favor of the plaintiffs and they were awarded $145 billion in punitive damages. But, it was overturned in2006 when the Florida Supreme Court decided that each of the plaintiffs involved in the class-action litigation had in fact smoked for very personal, individual and different reasons. They were told that they could file lawsuits individually, which is what Robinson did. What was upheld by the Florida court was that the jury’s findings that cigarettes and tobacco in general lead to diseases and that they are defective as well as labelling tobacco companies as negligent. These issues are now standing and they do not need to be re-litigated in any future lawsuit that takes place. The Supreme Court in Florida also refused just a few weeks ago the request by RJ Reynolds (amongst others) to hear their appeals regarding other court judgments in Florida which come to a total of $70 million.
Just a few days ago RJ Reynolds announced the decision to take over Lorillard in order to conquer the electronic cigarette market and hopefully compensate the falling sales in the industry. The US tobacco industry is worth an estimated $120.7 billion (2013) in sales according to research carried out by Euromonitor.
It was just 50 years ago that the US Department of Health first published a report recognizing that tobacco could cause cancer. Since that date, 13 different types of cancer as well as other illness have been recognized as having a link with the substance.
RJ Reynolds manufactures Camel, Kool and Pall Mall cigarettes amongst others. The tobacco company founded in 1875 is the 2nd largest in the USA and it holds 33% of the tobacco market. For the first quarter of2014 it posted net sales to the value of $1, 563 million, with an operating income of $482 million.
Originally posted: RJ Reynolds Fined $23.6 Billion
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