Tobacco Manufacturer Settles Lawsuits Filed for Thousands of Smokers

One of the major tobacco manufacturers in the world has reached a $110 million settlement that will resolve lawsuits brought by about 4,900 smokers in Florida.  

Liggett Group, a subsidiary of Vector Group Ltd. announced this week that it has agreed to settle smokers’ lawsuits brought against it in Florida state court, which are part of the so-called Engle progeny tobacco lawsuits. The agreement resolves all but about 400 of the 5,300 cases in which Liggett Group is named as a defendant.

According to the tobacco manufacturer, about $61 million of the settlement will be paid in a lump sum, with the remaining $49 million to be paid in installments over a 15-year period. The company expects to finalize the tobacco lawsuit settlement within the next three months, indicating that the agreement does not require court approval.

Thousands of former smokers are pursing individual lawsuits against tobacco companies in Florida after a 2006 decision by the Florida Supreme Court vacated a $145 billion judgment in a class action lawsuit brought on behalf of an estimated 700,000 smokers. The case, Engle v. R.J. Reynolds Tobacco Co., allows plaintiffs to file individual claims and use the liability findings from the class action trial. Known as the Engle progeny lawsuits, plaintiffs are not required to establish liability, but still must prove that their injuries were caused by a smoking addiction.

The U.S. Supreme Court recently rejected a request by tobacco manufacturers to hear an appeal, which challenged the constitutionality of the Engle trial structure. As a result, thousands of individual cases are expected to continue to trial, and several have already resulted in multi-million dollar jury awards.

“We are pleased to reach this landmark settlement, which prudently resolves substantially all of the Engle progeny cases pending against us,” said Bennett S. LeBow, Chairman of Vector Group’s Board of Directors in a October 23 press release. “The Engle progeny cases have been the biggest litigation overhang on our company in the last decade, and this settlement substantially reduces the ongoing litigation risks, as well as related legal fees and expenses, of these cases.”

Earlier this month, a Palm Beach County jury awarded Kathleen Gafney Hanners $3.8 million for the death of her husband, Frank Gafney, who died of lung cancer in 1995. The jury ordered a total of $5.8 million in damages against Lorillard Tobacco Co. and R.J. Reynolds, but found Gafney 34% responsible for his inability to quit smoking, leading to the reduction in the final award.

Last week, another Florida jury awarded Lucinda Naugle $11.65 million in a case against Philip Morris. However, in this case the award may be seen as a success for the company, as an earlier jury awarded $300 million in damages for Naugle’s smoking health problems in November 2009, including emphysema and chronic obstructive pulmonary disorder. The company appealed the verdict and the Fourth District Court of Appeal threw out the original award and ordered a new damages trial.

Liggett has only won five of the 14 Engle progeny trials involving its products. It is also one of the smallest of the tobacco companies involved in the lawsuits.