Tobacco Companies Settle 400 Lawsuits for $100 Million

The three biggest U.S. tobacco companies agreed to pay $100 million to settle 400 Florida lawsuits, potentially resolving a group of cases filed after a 2006 ruling by the state’s highest court that made it easier for individuals to sue the industry for smoking-related harm.

Altria Group Inc., the maker of Marlboro cigarettes, Reynolds American Inc., whose brands include Winston, and Lorillard Inc. agreed to the settlement that resolves federal court cases but not the thousands of other lawsuits pending in Florida state courts.

The agreement must be approved by the claimants before taking effect, said Joe Rice, a lawyer who negotiated on behalf of the smokers and their families.

“I hope that the victims find it to be a fair and reasonable resolution,” Rice said in a phone interview Wednesday.

The agreement marks the first significant move by the tobacco industry to pay money directly to smokers and their families as part of a settlement, said Rice. Tobacco companies have agreed to pay billions of dollars to the states and have paid individual verdicts after losing their appeals.

Philip Morris

Under the agreement, Altria’s Philip Morris USA unit and Reynolds American’s R.J. Reynolds Tobacco unit will each pay $42.5 million. Lorillard will pay $15 million.

In the 2006 ruling, Florida’s high court threw out a $145 billion punitive damage award in a statewide smokers’ class-action case filed in 1994. At the same time, the court allowed class members to sue individually and upheld a number of factual findings from the case, including that the companies were negligent, conspired to hide information about the dangers of smoking and sold defective products.

Smokers used the factual findings to bolster their cases, with some winning multimillion-dollar verdicts.

Rice was a lead negotiator in the $206 billion settlement between 46 states and the major U.S. cigarette makers in 1998.

Engle Decision

The Florida ruling is known as the Engle decision after Howard Engle, the lead plaintiff in the case, which was filed on behalf of Florida smokers who were addicted to nicotine and developed cancer, heart disease and other illnesses. Engle, a Florida pediatrician, died in 2009.

In 2013, a federal appeals court in Atlanta rejected the companies’ argument that the Engle ruling shouldn’t be applied in the federal cases.

“Today’s agreement is in the best interest of the company,” Murray Garnick, Altria senior vice president and associate general counsel, said in a statement. Garnick said the company will continue to fight the Engle cases in state court.

“We are pleased to put the federal Engle litigation behind us,” Jeff Raborn, vice president and assistant general counsel for R.J. Reynolds, said in a statement.

Lorillard’s Counsel

Lorillard’s general counsel, Ronald Milstein, didn’t immediately reply to a phone message seeking comment.

Reynolds American agreed in July to buy Lorillard. The companies expect to close the deal this year.

In 2013, Vector Group Ltd.’s Liggett tobacco unit announced it had agreed to pay $110 million to settle more than 4,900 of the 5,300 individual Engle claims filed against it in Florida.

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