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Excerpts from: California Tobacco Class Action Certified, Billions in Claims

By Lawrence Viele  Bloomberg.com [05/10/01]
 
                      San Diego-- A lawsuit seeking restitution from tobacco
                      companies for every Californian who's bought cigarettes can proceed, a state
                      judge ruled.

                      Superior Court Judge Ronald S. Prager in San Diego has certified class-action
                      claims on behalf of California smokers who contend that Philip Morris Cos.
                      and other cigarette makers broke the state's unfair business practices laws.
                      Smokers may be eligible for billions of dollars in restitution if the suit -- one of
                      the few of its kind nationally -- succeeds, plaintiffs' lawyers said.

                      While allowing the restitution claims to proceed, Prager refused to allow a
                      class of smokers to seek punitive damages under state consumer-protection
                      laws. Liability for addiction and smoking-related health-care costs, the grounds
                      for many of the suits across the U.S. against tobacco companies, are not
                      issues in the case.
 
                      The amount of potential damages may reach the billions of dollars, said
                      plaintiffs' attorney Sharon Arkin of the Newport Beach, California, firm of
                      Robinson, Calcagnie and Robinson.

                      Scope of Class

                      Prager is expected to rule in June on whether the class should include
                      smokers back to 1992 or as far back as 1954, Arkin said.

                      It's not likely that the majority of smokers would come forward to receive
                      reimbursement, or even have proof they deserve money back, Arkin said. If the
                      plaintiffs prevail, she expects that the majority of damages would go into a
                      smoking cessation program fund.

                      Also named in the suit are American Tobacco Company, now British
                      American Tobacco Plc; R.J. Reynolds Tobacco Holdings Inc.; and Brown &
                      Williamson Tobacco Corp., also a part of BAT.

                      A Florida class-action smokers' suit, the so-called Engle case, was the first to
                      go to trial in 1999, but included claims for medical and compensatory
                      damages. A Miami jury awarded $145 billion to plaintiffs.

                      The San Diego class action is an indication that the Florida case was not an
                      aberration, as tobacco industry officials have insisted, said Northeastern
                      University Tobacco Liability Project attorney Edward Sweda.

                      ``This is an example of another court in another part of the country that has
                      made a determination that a suit can go forward in a way that is much more
                      manageable and cost effective for the entire court system,'' Sweda said.

                      It's been a big week in the legal affairs of tobacco companies. On Monday,
                      Philip Morris, Lorillard Inc. and Liggett Group Inc. agreed to pay at least $709
                      million to the Engle plaintiffs, in exchange for not having to post a bond to
                      cover the $145 billion award during appeals. Even if the three tobacco
                      companies win their appeals, the plaintiffs will get to keep the $709 million.