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Tobacco companies pay out huge settlement

Author
AAP ,
Publish Date
Thu, 26 Feb 2015, 4:41PM
File photo (Stockxchng)
File photo (Stockxchng)

Tobacco companies pay out huge settlement

Author
AAP ,
Publish Date
Thu, 26 Feb 2015, 4:41PM

Three major US tobacco companies - Philip Morris, RJ Reynolds and Lorillard - have agreed to pay $US100 million to settle more than 400 lawsuits claiming that smoking damaged people's health.

"We are very pleased that after many years of litigation, the parties were able to reach agreement. This settlement will provide immediate compensation to our clients, many of whom are very elderly," said lawyer Robert Nelson, of Lieff Cabraser Heimann & Bernstein, who helped negotiate the deal.

Under the terms of the agreement, Altria unit Philip Morris USA, the largest US tobacco company, and RJ Reynolds, the second-largest, will each pay $US42.5 million to resolve the federal cases. Lorillard will pay $US15 million.

The settlement only involves cases that are pending in federal court, the law firm noted, not cases filed in state court. The tentative agreement is subject to the approval of all the plaintiffs.

The settled cases are part of the so-called Engle cases, a Florida class-action lawsuit filed against the cigarette companies in 1994. They were also part of a 2006 Florida Supreme Court decision to decertify the class action, saying the $US145 billion in punitive damages to the entire group was "excessive".

However, the top court opened the door to individual lawsuits, and allowed the findings to stand in the case, including that smoking cigarettes harmed health and the tobacco companies had knowingly concealed the health effects of cigarettes or their addictive nature.

"Today's agreement is in the best interest of the company," said Murray Garnick, senior vice president and associate general counsel at Altria, in a separate statement.

"As for the Engle progeny cases in state court, we will continue to defend ourselves vigorously, including appealing adverse verdicts."

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