Tobacco Companies to Settle Pending Lawsuits--Update

By Tripp Mickle 

The three largest U.S. tobacco companies announced an agreement Wednesday to resolve pending tobacco lawsuits in Florida related to a 1994 class-action lawsuit on behalf of Florida residents.

Reynolds American Inc. and Altria Group Inc. will pay $42.5 million to resolve several federal cases, and Lorillard Inc. will pay $15 million. The agreement covers only cases in federal court and doesn't include cases in Florida state courts.

The agreement won't become final unless all the individual plaintiffs in the cases agree to participate in the settlement.

The cases are collectively known as the Engle progeny lawsuits, named after lead plaintiff Howard Engle. The suit was against the largest tobacco companies: Philip Morris USA, a subsidiary of Altria Group; R. J. Reynolds Tobacco Co., a unit of Reynolds American; Lorillard; and Liggett Group.

A Florida jury in 2000 ordered the companies to pay $145 billion in damages--the biggest punitive-damages verdict ever--to hundreds of thousands of Florida residents who had suffered or died from smoking-related diseases.

Only those who got sick before November 1996 qualified, though. The vast majority of the surviving plaintiffs are over 65.

In 2006, the Florida Supreme Court tossed out the award, saying it was "excessive as a matter of law."

While decertifying the class, the state's highest court said that factual findings made by the jury in the case would be binding in future smoking cases heard in Florida. That meant jurors in future cases would have to accept that cigarette makers had misled smokers about the dangers.

The decision spawned thousands of lawsuits, all in Florida state and federal courts. Plaintiffs have won most of the verdicts and been awarded damages as high as eight figures

In 2013, Liggett struck a $110 million deal.

"We are pleased to have these federal Engle cases behind us," Lorillard Executive Vice President Ronald Milstein said. Both he and a representative for Altria said the companies will "vigorously defend" themselves in future cases pending in Florida.

Both companies will record the charges in their first-quarter results.

Angela Chen contributed to this article.

Write to Tripp Mickle at [e-mail]

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