June 2 (Bloomberg) -- R.J. Reynolds Tobacco Co., the second-biggest U.S. cigarette maker, should pay $30 million to a woman whose husband died of lung cancer after years of smoking, a Florida jury said.

A six-person panel in state court in Pensacola, Florida, yesterday awarded Hilda Martin $25 million in punitive damages to punish the cigarette maker for the death of her husband, Benny Martin. The jury last week awarded Martin $5 million in compensation. Mark Belasic, a company lawyer, said the company will appeal.

The case is at least the seventh of its kind to be tried since the Florida Supreme Court ruled in 2006 that smokers couldn’t sue as a group on behalf of smokers statewide. The court, in the so-called Engle case, said smokers could sue individually and extended the time for them to do so. About 4,000 such cases are pending across Florida.

“We think the jury verdict is an outlier,” Belasic, of Jones Day in Cleveland, said yesterday in a phone interview. “There have been six of these individual Engle lawsuits and no one has been anywhere near this type of verdict.”

Martin’s lawyer, Matt Schultz, whose father died of smoking-related lung cancer less than two years ago, disagreed with Belasic’s characterization, saying the cigarette industry can expect more of the same as more cases go to trial.

Time Will Tell

“This isn’t about juries-gone-wild,” Schultz said today in a phone interview. “The ratio of punitive damages was very reasonable. Only time will tell if it’s an outlier. I think there will be bigger verdicts down the road and smaller ones and tobacco will win some too.”

The state Supreme Court, ruling in a class-action suit headed by a Florida smoker named Howard Engle, upheld a series of factual findings in the case and said those determinations would apply in the individual smokers’ suits, including the one against R.J. Reynolds, which is owned by Winston Salem, North Carolina-based Reynolds American Inc.

The Engle findings apply if a jury decides a plaintiff died as a result of his or her nicotine addiction, Schultz said. They include determinations that the cigarette industry conspired to conceal information about the addictive nature of cigarettes, that cigarettes are defective and unreasonably dangerous and that smoking is addictive and causes lung cancer, he said.

R.J. Reynolds and the rest of the cigarette industry are asking a federal appeals court to find it’s unconstitutional to apply the Engle findings to individual lawsuits. If that happens, Schultz says the ruling won’t apply to lawsuits in state court.

State Law

“This is state law and the Florida Supreme Court has spoken on this,” Schultz said. “Only the U.S. Supreme Court can overrule the state supreme court, and the U.S. Supreme Court already declined to hear the Engle case. They tried to drag us in to federal court and it didn’t work.”

Yesterday’s verdict follows an $8 million decision against Altria Group Inc.’s Philip Morris USA unit in February and a $700,000 verdict against Vector Group Ltd.’s Liggett Group unit last month. Both companies said they planned to appeal.

“We are disappointed with the trial procedure, the jury’s decision, and we will appeal,” a R.J. Reynolds spokesman, David Howard, said in a statement. “It is our position that the trial proceedings were unconstitutional and otherwise inconsistent with law. We believe the verdict will ultimately be reversed on those and other grounds.”

Heavy Smoker

Martin, a 79-year-old German-American, met her husband in Germany after World War II, when he was in the U.S. military, Schultz said. Benny Martin started smoking in 1942, when he was 14 years old, and was diagnosed with lung cancer in 1994. He died the following year after a failed attempt at quitting.

“The evidence showed he smoked as much as two packs a day for 50 years,” Schultz said of his client’s husband. “Our experts said he was a classic, heavily addicted smoker.”

Schultz says there’s no doubt Benny Martin was partly responsible for his death.

“We went into the case admitting that Mr. Martin shared some fault here and should bear some responsibility,” Schultz said. “Even after the verdict, R.J. Reynolds still won’t take any responsibility for what they did. They said on the stand in this case that they have never taken any steps to make a product less addictive.”

Plaza Hotel

Schultz said the heads of the cigarette industry met at the Plaza Hotel in New York in 1953 and started a conspiracy to fight the public health authorities on the safety of smoking.

“They knew for a very long time and they lied and covered up in order to make money,” Schultz said. “That was the basis for the award -- how far back the conspiracy went and how pervasive it was. Fourteen to 15 million people have died from smoking since the ‘50s.”

Last month, Altria Group Inc. and other cigarette makers lost an appeal of a lower court’s decision that the companies violated racketeering laws and barring them from marketing cigarettes as “light” or “low-tar.”

The May 22 decision by the U.S. Court of Appeals in Washington upheld U.S. District Judge Gladys Kessler’s 2006 ruling, which found the companies conspired for decades to defraud the public and were likely to violate racketeering laws in the future. The decision is a victory for the Justice Department, which sued the industry in 1999.

To contact the reporters on this story: Erik Larson in New York at elarson4@bloomberg.net; Bob Van Voris in New York at vanvoris@bloomberg.net.

Last Updated: June 2, 2009 12:48 EDT