$200B Tobacco Suit Faces Uphill Fight

Hubertus, Prince of Saxony Coburg and Gotha, right, leads his American wife Kelly Rondestvedt out of St. Moriz church in Coburg, Germany, following their church wedding ceremony, Saturday, May 23, 2009. About 400 guests attended the wedding of the hereditary prince and the 34-year-old Kelly from Pensacola, Fla. (AP Photo/Eckehard Schulz)
AP Photo/Eckehard Schulz
A potential $200 billion class action lawsuit accusing tobacco companies of duping light-cigarette smokers could stumble over unresolved questions about the size of the class, the plaintiffs' state of mind and possible damages, a judge cautioned Wednesday.

"How many people deep down knew they were getting something dangerous but were willing to pay for the illusion it wasn't?" U.S. District Judge Jack Weinstein asked the smokers' lawyers during a six-hour hearing in federal court in Brooklyn.

The judge delayed a decision on whether to grant class action status for tens of millions of smokers in a 2004 lawsuit that alleges Philip Morris USA Inc., R.J. Reynolds Tobacco Co., Lorillard Tobacco Co. and other defendants responded to consumers' mounting health concerns with a campaign of deception designed to preserve revenue.

The manufacturers hoped to "move markets" with a cynical marketing strategy promoting light cigarettes as a lower-risk alternative to regular cigarettes, even though their own internal documents showed they knew the risks were about the same, plaintiff attorney Michael D. Hausfeld said while arguing for class certification in a courtroom packed with dozens of attorneys.

"They understood that they were selling death," he said. The question, he added, was "how to disguise it. ... They put on 'lights."'

Hausfeld told the judge that an analysis by plaintiffs' expert witnesses concluded more than 90 percent of the smokers in the potential class purchased light cigarettes over the past three decades based on health concerns, as opposed to taste or other factors. A separate study found that smokers, had they known the truth about the health risks, would have expected discounts of 50 to 80 percent per pack, part of the basis for a demand for between $120 billion and $200 billion in damages, he said.

The lawyer noted that because the suit was filed under civil provisions of the Racketeer Influenced and Corrupt Organizations Act, those damages could be automatically tripled, up to a staggering $600 billion.

Defense attorneys argued that the lawsuit relied on flawed data. Without surveying each smoker in the suit, it would be impossible to determine their motives for buying light cigarettes, they said.

"It's a fluid class with many different beliefs," said R.J. Reynolds attorney Theodore Grossman.

The judge appeared to agree, telling the plaintiff lawyers, "You can't get away from the contention of the defendants that every smoker is different."

He also said he was hesitant to let the case go to trial without a more precise formula for determining damages.

"You just can't allow a juror to grab a number out of thin air," he said. "There has to be some basis in reality."

The judge put off a ruling on whether recent findings against the tobacco industry by another federal judge should apply to the case.

A ruling in August by U.S. District Judge Gladys Kessler in Washington found that manufacturers misled smokers by labeling cigarettes "low tar," "light," "ultra light" or "mild."

The defendants "distorted the truth about low tar and light cigarettes so as to discourage smokers from quitting," Kessler wrote.