Lorillard negotiating $7.5 billion tobacco settlement

Lorillard Tobacco Co., the nation's fourth-largest cigarette maker, is negotiating a deal in which the company would pay about $7.5 billion over 30 years to settle punitive-damage claims filed by thousands of smokers around the United States, according to lawyers close to the case.

If the agreement -- which faces a bevy of potential obstacles -- is consummated, it could increase the momentum behind efforts to craft a global settlement of hundreds of individual claims and class-action suits around the country.

The proposed settlement could mark a significant break in the ranks of the major tobacco companies, who until now have opposed efforts by U.S. District Judge Jack B. Weinstein to negotiate a nationwide settlement of punitive-damage claims.

The proposed settlement could mark a significant break in the ranks of the major tobacco companies, who until now have opposed efforts by U.S. District Judge Jack B. Weinstein to negotiate a nationwide settlement of punitive-damage claims.

One plaintiffs' lawyer compared the possible Lorillard accord to a groundbreaking agreement reached by Liggett, smallest of the nation's five major cigarette makers, in 1996. At the time, Liggett admitted cigarettes were hazardous to health and agreed to cooperate with plaintiffs' lawyers in cases against the other companies.

However, at least one prominent plaintiffs' lawyer, Ronald L. Motley, said he objects to the proposed agreement and will oppose it if it is presented in its current form to Judge Weinstein. "This amounts to a get out of jail free card for Lorillard," said Motley, of Charleston, S.C.

Another lawyer involved in the talks said that Motley and his partner spurned the settlement because it did not provide compensation for a major client of theirs -- the Manville Personal Injury Trust -- an entity that compensates injured asbestos workers. The trust is demanding that cigarette makers give billions of dollars to the strapped fund -- spawned by the 1982 bankruptcy of asbestos giant Johns-Manville Corp. -- pointing to studies showing that smoking dramatically boosts the risk and severity of asbestos illness.

One principal plaintiffs' negotiator said late Friday that some key issues had not been resolved but that he hoped those problems would be overcome within 24 hours.

Another attorney said some of the key sticking points involved public health issues and how much Lorillard would do in that regard, including whether the company would put new, stronger warning labels on its packages.

Still, two plaintiffs' lawyers, speaking on condition of anonymity, said the agreement would provide significant public health benefits, with a lot of the money going for cancer research -- including a new X-ray technology for early detection of lung cancer now being developed at Cornell University -- and related activities, including smoking cessation programs. None of the money would go to individual plaintiffs.

But attorney Matthew Myers, president of the National Center for Tobacco Free Kids, said: "It is appalling that the agreement contains no provisions to protect the public health, reduce tobacco use or compensate a single individual that has been hurt."

The nation's three largest cigarette makers -- Philip Morris Cos., Inc., R.J. Reynolds Tobacco Co. and Brown & Williamson Tobacco Corp. -- all said they would oppose any effort to certify any case as a class action. Thus far, about two dozen federal and state courts in other lawsuits have ruled that tobacco suits can't be treated as class actions.

However, a Miami judge permitted a statewide class action to go forward there. In July a Miami jury ordered the cigarette makers to pay $144.8 billion in punitive damages to Florida smokers who became sick or died as a result of addiction to cigarette smoking.

The jury said that Lorillard was responsible for $16.8 billion of the total amount.