SAN FRANCISCO, Aug. 6 (UPI) -- Tobacco companies and anti-smoking advocates both found something to cheer about Tuesday after the California Supreme Court ruled that smokers in the state could sue cigarette companies for fraud, but were prohibited from using evidence of alleged misconduct that occurred during a 10-year period of immunity.
The court ruled Monday that lawsuits alleging fraud and negligence on the part of cigarette makers could proceed, but also determined that a state law in place from 1988-1998 that shielded the tobacco companies from such lawsuits meant that nearly all company documents from that period could not be presented to jurors.
"This is a victory for fundamental fairness," said Charles A. Blixt, executive vice president for R.J. Reynolds. "We are pleased that the California Supreme Court refused to rewrite the rules after the fact. In 1988, the California legislature recognized that products like tobacco, which have well known, inherent health risks, should not be subject to personal injury claims."
The court said in two separate 5-2 rulings filed against Reynolds and Philip Morris involving lawsuits by two smokers, that while the immunity was formally repealed by the state Legislature, the supposed misconduct that took place during the 10 years of immunity was, in effect, not misconduct since the tobacco companies were immune from such lawsuits.
"To have the Repeal Statute govern product liability suits against tobacco companies for supplying tobacco products to smokers during the immunity period would indeed be a retroactive application of that statute because it could subject those companies to 'liability for past conduct' ... that was lawful during the immunity period," the court's ruling said. "Such retroactive application is impermissible unless there is an express intent of the Legislature to do so."
The court determined that the Legislature did not give "any clear indication that it wanted the Repeal Statute to apply retroactively."
Associate Justice Carlos Moreno said in his dissent that while the wording in the Repeal Statute appeared uncertain, a careful reading made it clear that lawmakers indeed did intend to apply it retroactively.
"The inclusion of persons who 'have suffered or incurred injuries' as among those to whom the abolition of the statutory immunity applies cannot be understood to mean anything other than that the Legislature, speaking as of Jan. 1, 1998, intended to eliminate immunity for past injury-producing conduct by the tobacco industry," Moreno said.
The court also left open the possibility that the immunity period would not apply in instances when harmful ingredients such as ammonia were added to tobacco products, a charge that the tobacco giants have denied.
But Moreno's opinion not withstanding, Blixt and other tobacco executives said the decision would uphold the dismissal of the lawsuits in question by lower courts.
"The court applied well-settled principles of law and correctly held that conduct during the period when the immunity statute was in effect cannot be admitted as evidence in a product liability case against tobacco manufacturers in California," said Ronald Milstein, vice president and general counsel of Lorillard Tobacco, which was not party to the lawsuits brought to the Supreme Court, but is named in other smoking lawsuits pending in the state.
The decision, however, was not taken as a setback by anti-smoking organizations that focused on the court's affirmation that tobacco companies can be sued for fraud and negligence during the period outside the immunity law's 10-year window.
"These rulings leave the tobacco industry open to the vast majority and the most severe of the claims they are facing in California," declared Matthew L. Myers, president of the Washington advocacy group, Tobacco-Free Kids. "Almost all of these cases involve industry behavior that took place before 1988 and smokers who took up their deadly habit before that time."
The Tobacco Products Liability Project announced it would hold a seminar on the decision in November for plaintiffs' lawyers to plot strategy for the next phase of the ongoing legal battle over smoking in California.
Mark Gottlieb, an attorney for the organization, said, "The 10 years of industry conduct that is excluded from liability is legally insignificant because this industry has been playing fast and loose with the truth for half a century."
The TPLP and Tobacco-Free Kids both implied in their press releases that the ruling would pave the way to some bruising jury awards that would lower the value of tobacco stocks.
Attorney Edward Sweda of the TPLP said Reynolds' "appellate team just lost a big one in the California Supreme Court, and it is becoming increasingly clear that tobacco companies will be paying dearly for their conduct in California and elsewhere."
Share prices for Reynolds were on the rise Tuesday afternoon, closing up $1.14 at $57.28 while Philip Morris gained $0.76 to close at $48.26.
(Reported by Hil Anderson in Los Angeles)
