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Saturday Morning News

Jury Verdict Likely to Force Sweeping Changes to Tobacco Industry

Aired July 15, 2000 - 8:25 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

MILES O'BRIEN, CNN ANCHOR: Florida jurors made history yesterday when they issued the biggest jury verdict ever. The panel assessed punitive damages totaling $145 billion against Big Tobacco. What's next for the cigarette makers?

Richard Daynard, a professor at Northeastern University, joins us to offer some legal perspective.

Professor Daynard, thanks for being with us.

PROF. RICHARD DAYNARD, NORTHEASTERN UNIVERSITY: A pleasure.

O'BRIEN: I just did the math this morning. There's a class of about 500,000 smokers down there, so it is estimated, and you divide that by about $145 billion and that's about $300,000 per person. But it really doesn't end there, does it?

DAYNARD: Well, that's right, because this is just the punitive damages. This is not intended to compensate these plaintiffs for their injuries and we have seen what at least this jury, which has now been disbanded, but there will have to be other juries, what this jury thought each case was worth and that was about $4 million per plaintiff. You multiply that thing out, you've got a number that's an awful lot larger than $145 billion.

And that's the estimate of how much damage the industry has caused just in, it was really for people in the 1990s who got tobacco- caused diseases just in Florida.

O'BRIEN: Well, you know, Judge Kaye remarked that there were a lot of zeroes yesterday. You're right, when you start multiplying that out, you really do get into the realm where you're talking about taking an industry down. Is that appropriate no matter whatever the industry is doing? Is it appropriate for juries to be in a position where they could bankrupt an entire industry?

DAYNARD: Well, this particular jury can't and won't bankrupt this industry because Florida law prevents a punitive damage award from bankrupting an industry. Other states don't have that restriction. But the compensatory damages are a different story. If this industry can't pay for the harm it causes, it shouldn't be out there and there are ways that it can change. So even if they were forced into bankruptcy court by some later proceeding in this or another case, they would be allowed, presumably, to continue to operate in bankruptcy reorganization, but only if they sold less toxic, less lethal products, which they have on the shelves. They know how to make them and only if they sold them through totally different marketing techniques, through actually telling the truth about the product rather than continuing this disinformation campaign they've been running so successfully for the last 50 years.

O'BRIEN: All right, let's take a look ahead. There are cases in Louisiana and Arizona. There are the Blue Cross and the Blue Shield are suing. There's just a whole series of cases ahead for the tobacco industry. Is this sort of crying out for some sort of legislation to come up with a point where you just say enough already or will this just go on and on?

DAYNARD: Well, it may go on and on. It's going to have to stop at some point because at some point the dollars exceed the industry's ability to pay and it can stop in two ways. One way would be through a bankruptcy reorganization which, you know, I think would have positive public health consequences because the companies would be forced to change the way they do business if they were allowed to continue.

Or there could be another effort, might or might not be successful, in Congress like the one three years ago to try to negotiate what they called a global settlement.

The industry torpedoed the last one. They would have to come, actually, with a lot more to the table before public health groups and the people in Congress who care about the public health will begin to listen to their pleas.

O'BRIEN: Professor Richard Daynard, who's been in the forefront of the efforts to make tobacco companies pay for the health effects of their products. Thanks for being with us on CNN's SATURDAY MORNING.

DAYNARD: A pleasure.

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