Word: tobacco
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Dates: during 2000-2009
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...bitter reality of the Bullock decision is that Phillip Morris will never turn over a penny of the award. After four decades and thousands of lawsuits, Robert A. Levy of the CATO institute points out, no tobacco company has ever paid any court-awarded damages. Given that they win eight or nine of every ten individual litigations on average, according to Goldman Sachs tobacco analyst Marc Cohen, they have little cause for concern. If the Bullock decision signaled a real threat to Phillip Morris, we would expect investors, the most paranoid sentries of corporate danger, to sell off stock...
...history of overturning individual litigation is probably related to the tenuous legal arguments on which they rest. Bullock’s and other plaintiffs’ arguments require evidence that simply is not available. They argue they were not fully aware of the risks of smoking due to tobacco companies’ deceptive tactics, which included misleading advertising and understatement of health risks. Proving such an argument requires clairvoyant insight into decisions made decades ago. The plaintiff’s word should not be enough, especially when so much money is at stake...
...individual decisions; attorneys need only show that populations of people would not have chosen to smoke with full disclosure of information. The ultimate test of this distinction will not come until the first appeals of this type are decided, but there is certainly potential for success. As Goldman Sachs tobacco analyst Marc Cohen points out when analyzing the legal threats of individual and collective lawsuits, “The real challenge, in our opinion, are the aggregate suits...
...their short history, collective suits have already shown their potential to penetrate the armor of the tobacco industry. In a 1998 settlement between the industry and 45 states, for example, tobacco companies agreed to pay out $206 billion in damages over 25 years, in addition to sponsoring anti-smoking advertisements and programs to help smokers quit. The unprecedented size of this settlement, together with the small but important reforms on which it is contingent, represent the first forced concession of the seemingly impervious industry. In Miami, the first class action lawsuit decided by trial has yielded a $144 billion award...
Rather than arousing our indignation at big tobacco, money-hungry litigation distracts us from the nefarious practices most in need of reform. As greedy copycats line up for a piece of the pie, the truly effective collective suits may suffer an undeserved fallout. No matter how big the price tag looks, if collective action falls by the wayside, tobacco companies will have won without even trying...