In Dicta

Sunday, August 14, 2005

"Big Tobacco" in court

"On and on they go, mammoth lawsuits against the nation's biggest tobacco companies.

Just two weeks ago, Philip Morris USA and five other cigarette makers were sued in a federal court in Boston by a group seeking to recover $60 billion for the government in Medicare benefits for smoking-related diseases. Lawyers for the group, the United Seniors Association, said the law also allowed the court to award an additional $60 billion to the plaintiff.

The lawsuit is just the latest in more than 50 years of legal challenges to the tobacco industry. Hundreds of other cases are still pending in this country and abroad, including some that have been grinding on for years, like the federal government's effort to claim $280 billion in a racketeering case.

As the nation's largest cigarette maker with half the domestic market, Philip Morris, alone, is currently a defendant in 454 cases; it spent $933 million in legal costs from 2002 to 2004, with lawyers billing $850 an hour and, in rare cases, up to $1,000.

Are company officials concerned about the Boston case? Are they concerned about any case? To some extent, yes, they say. But this is an industry that long ago accepted litigation as a routine cost of business.

"Obviously, we take the litigation very seriously," said Steven C. Parrish, a senior vice president of the Altria Group, the parent company of Philip Morris. Mr. Parrish added, "We believe we have the appropriate strategies and resources to successfully manage the litigation."

Like other tobacco companies, Philip Morris has a modest staff that oversees the company's litigation and retains leading law firms and specific lawyers on a case-by-case basis.

For the trial in the government lawsuit, which ended in June after nine months, much of the courtroom work was handled by two lawyers representing Philip Morris - Dan K. Webb of Winston & Strawn in Chicago and Theodore V. Wells Jr. of Paul, Weiss, Rifkind, Wharton & Garrison in New York - along with David M. Bernick of Kirkland & Ellis in Chicago, who represented the Brown & Williamson tobacco company.

Mr. Webb is a former United States attorney in Illinois who has represented Microsoft, General Electric and the New York Stock Exchange. Mr. Wells has defended civil and white-collar criminal defendants, including former Agriculture Secretary Mike Espy, former Senator Robert G. Torricelli of New Jersey and the financier Michael Milken. Mr. Bernick, who has defended chemical and asbestos companies, specializes in complex corporate cases and has been retained by Philip Morris for a class-action tobacco case in New York.

With such legal power, the tobacco companies have enjoyed a reasonable measure of success in court."

And on and on with endless litigation.

From The New York Times.


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