The six jurors deliberated over two days before returning the award for Elaine Hess, whose husband Stuart Hess died in 1997 at age 55 after decades as a chain smoker. The award amounts to $1.3 million in compensatory damages and $5 million in punitive damages against Richmond, Va.-based PM USA, a unit of Altria [image-nocss] Group, New York. Hess's attorneys sought $130 million.
The Hess case was the first to go to trial since the Florida Supreme Court in 2006 voided a $145 billion class-action jury award, which was by far the highest punitive damage award in U.S. history.
The court said each smoker's case had to be decided individually, but let stand that jury's findings that tobacco companies knowingly sold dangerous products and hid risks from the public.
The Hess trial, which began February 3, included video of 1994 testimony before Congress in which top executives of the major tobacco companies, including PM USA, denied that smoking was addictive. The jury in the Hess case previously found that Stuart Hess was hopelessly addicted, even as PM USA attorneys pointed to evidence he was capable of quitting.
The Hess case has been closely watched by the tobacco industry and by the thousands of other Florida smokers and survivors who have sued. Although it does not directly control the outcome of those other lawsuits, the Hess case could signal how many of them will turn out.
The original Florida lawsuit was filed in 1994 by a Miami Beach pediatrician, Dr. Howard Engle, who had smoked for decades and couldn't quit. The class of smokers was estimated at up to 700,000 when the giant $145 billion award was issued in 2000.
In other tobacco news, Myodan, N.C.-based cigarette manufacturer General Tobacco said that it has reached an agreement with states that signed the tobacco industry's Master Settlement Agreement (MSA) with respect to compliance with its obligations under the MSA. The states entering into that agreement will support a permanent amendment to the terms under which General Tobacco entered into the MSA upon a favorable resolution of a lawsuit currently pending in California and compliance with the agreement just reached.
That lawsuit, filed in December 2008, seeks a determination from the court that the amended terms do not create any rights in General Tobacco's MSA competitors to revise their MSA payment terms.
The agreement is a large step towards a complete resolution of General Tobacco's legal controversy with the states, it said. It will allow General Tobacco to continue making payments towards its past financial obligation under the MSA, and to operate with sufficient working capital to continue as a viable and successful company. By doing so, General Tobacco will continue to provide the states with a consistent stream of payments that can be used to reduce youth smoking and reimburse the states for medical expenses associated with tobacco related health costs.
J. Ronald Denman, executive vice president of General Tobacco, said "We are pleased with this outcome because it provides our customers with the assurance of General Tobacco's stability and longevity in the market place. In April, when General Tobacco makes its next MSA payment, it will have contributed more than $550 million to the states since its entry into the MSA in August 2004. The amount of our payments to the states shows our commitment to the MSA, and our desire to continue to provide a value oriented economic alternative for adult smokers who can no longer afford the high prices of the premium brands."
The MSA is a comprehensive accord reached in 1998 with the Attorneys General of 46 states, the District of Columbia and five territories that has fundamentally changed how tobacco is marketed, advertised and promoted. General Tobacco voluntarily joined the MSA in 2004 to support its national mission of improving public health and reducing youth smoking. General Tobacco's voluntary participation demonstrates the company's commitment to fully comply with the marketing and advertising restrictions addressed in the MSA for the public benefit, it said.
General Tobacco, the sixth largest tobacco company in the nation with approximately $300 million in annual sales, began its operation in 2000 distributing its own value-priced cigarette brand, GT One. The company now distributes Bronco, Silver, Vaquero Little Cigars, and its new premium menthol cigarette, 32 Degrees.
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