Peter Castano couldn't quit smoking. It was humiliating. He first lit up at 16, and swore to stop when his fiancée insisted on it as a condition of their marriage. But he just couldn't do it. On their honeymoon, Dianne Castano caught him sneaking one and threw a drink at him. She never relented, and Castano spent ten years of marriage trying-with a spectacular lack of success to hide his habit from his wife.
In 1993, Castano died of lung cancer at age 47, and an angry Dianne Castano approached the couple's best friend, Wendell Gauthier, a product liability lawyer in New Orleans, about suing the tobacco companies. Gauthier looked into it, but decided it was almost impossible to win a traditional wrongful death claim against the industry. Indeed, in more than 800 suits since 1954, the cigarette companies have gone to trial only twenty-three times, lost twice, and spent not a dime in damage payments.
But in February, a world-class group of lawyers led by Gauthier received certification from a federal court in New Orleans to bring a class-action suit on behalf of Peter Castano and three living, allegedly addicted smokers, thus launching Castano v. American Tobacco, the largest product liability suit in American history. If the case goes before a jury, it will be the first national class action for product liability ever to do so, one that could represent 90 million current and former smokers, who could win damages of $40 billion or more. To pull it off, more than sixty of the most prominent personal- injury law firms in the country have banded together to attack the tobacco industry in one mega-suit. As Gary Black, a tobacco specialist for New York financial analysts Sanford Bernstein and Co., characterizes it, "This case on a scale of one to ten is a nine-and-a-half."
Castano immediately stole the spotlight in a year that seems to be building toward an all-out assault against cigarette makers: Four states-Florida, West Virginia, Mississippi and Minnesota-are suing to recover billions in public health care costs for cigarette-related disease. Congress is considering additional restrictions on youth-oriented cigarette marketing, as is the Clinton Administration, which just accepted a recommendation by the Food and Drug Administration that nicotine face regulation as a drug. And a federal grand jury is investigating alleged tobacco company misrepresentations about the content and effects of cigarettes. Another may probe whether cigarette executives lied to Congress.
What frightens the financial community almost as much as a plaintiff's verdict in Castano-which Black says could drain the combined assets of Philip Morris and R.J. Reynolds, depending on the size of the class and the amount awarded per plaintiff-is the notification campaign. A good portion of Castano's $6 million war chest will be spent on this pretrial media bombardment notifying 45 million current smokers and the same number of former smokers of their right to sue. To join would mean simply clipping a coupon from a full-page newspaper ad or responding to one on TV or the Internet.
By certifying an enormous class that includes all nicotine- dependent people, as well as the survivors of deceased smokers, U.S. District Judge Okla Jones II acknowledges he has embarked "on a road certainly less traveled, if ever taken at all." And although he allowed a classwide trial on key issues such as whether the companies conspired to hide information from smokers, he didn't permit that trial to determine how much to compensate victims. That means a way has to be found to determine damages based on the facts of individual cases or groups of cases. "That's a hell of a problem with 30 million or more plaintiffs," said Ronald Motley, one of the Castano lawyers.
The story of Castano is also the story of the 800 other suits defeated by the corporate world's most ferocious litigator, an opponent that never settles and spends whatever it takes to exhaust the usually small plaintiffs' firms. (The manpower of tobacco's three biggest defense practices outnumbers all the attorneys from the sixty-odd Castano firms combined.) The industry put up S50 million to defeat the Cipollone case in New Jersey, dragged it out for ten years and finally took it to the Supreme Court. It buried the other side in paper, filing 100 motions. One witness was questioned for nine days. The exhausted plaintiff's firm, having spent $5 million in a losing cause, finally quit.
Cipollone points up why the future of legal attacks on the industry is very much in doubt in the current political climate. Tobacco has poured money into national and state tort reform efforts, knowing that bills making it more difficult to bring product liability suits, like those awaiting approval in Congress, would be the death knell for the individual tobacco plaintiff. The effect of such bills on class-action suits like Castano is less obvious. But tinkering with the contingent fee system or limiting awards for pain and suffering or punitive damages will have a severe impact on the ability of the plaintiff's bar to go after any large, well-funded corporate adversary, particularly tobacco.
Castano seeks to prove a conspiracy to bring off the deadliest, longest-running fraud in business history.
At the state level, the $47 billion industry quietly gutted dozens of suits in California and New Jersey in 1987 (one was Cipollone) by having more restrictive tort laws passed. California's statute retroactively abolished suits that target "inherently unsafe" products, and listed butter, sugar, castor oil, alcohol and tobacco.
If ever a substance deserved the designation "inherently unsafe," it is nicotine, the psychoactive ingredient in tobacco, and the casus belli for Castano. This poisonous alkaloid has been studied since the late nineteenth century, when biologists used it to help define the modern concept of drug tolerance, a key criterion for judging addictiveness. Contemporary researchers have found that after just two hours without cigarettes, the brain wave activity of a heavy smoker is so badly disrupted that the brain's ability to process information virtually shuts down. Such disruption is associated with extremely addictive drugs.
The cigarette companies learned early that nicotine was addictive and left an extensive trail of internal memos that prove they knew. The American Tobacco Company did more than ninety studies on the pharmacological and other effects of nicotine, beginning in 1940. By the sixties and seventies, tobacco industry scientists were "way ahead of the outside" in their understanding of nicotine, according to Jack Henning- field, a researcher at the National Institute on Drug Abuse. In 1977, Philip Morris wanted its researchers to explore such questions as, "Given a fixed quantity of nicotine in the tobacco, what factors in cigarette design determine its availability . . . to the smoker?" "Does the smoker seek spike effects or bloodstream constancy?" and "What are the fundamental differences between the habit of tobacco smoking and heroin injection?" The New York Times has published excerpts from Brown & Williamson Tobacco Corporation internal documents describing decades of clandestine research that con- eluded cigarette smoking is a disease-causing "habit of addiction," and outlined a coordinated cover-up of this explosive knowledge.
Despite all this, few attorneys will take on the cigarette companies, which have a reputation for doing virtually anything to win. The defense kept Rose Cipollone for four depositions-a total of almost twenty-four hours-as she withered in the final months of an agonizing death from lung cancer. Burl Butler, a Mississippi barber and the plaintiff in a second-hand smoke suit, was lying on his bed the day before he died when a helicopter began hovering over the house. The tobacco lawyers were apparently waiting for Butler to die so they could immediately make a motion to autopsy the body.
But the single biggest reason for the plaintiffs' losing record is the fact that juries in most tobacco lawsuits have blamed the smoker for not having the willpower to quit what everyone believed was no more than a dangerous habit. The smoker had "assumed the risk" and the consequences were his or her responsibility. By March 1994, a year after the death of Peter Castano, the emerging evidence of tobacco industry nicotine manipulation had convinced Wendell Gauthier that he could beat the cigarette makers with a suit based solely on the addictiveness of cigarettes, because addiction cancels out the assumption-of-risk argument. If the industry lied about nicotine, the smoker was suckered. He couldn't have assumed a risk he didn't know existed.
"I think the attitude now is, We were deceived. The American public was deceived, because those rascals knew it was addicting and they been knowing it was addicting," said the 52-year-old Gauthier. The addiction claim has another major advantage. The suit doesn't ask for damages for lung cancer or heart disease or emphysema, so no link to them has to be proven. Anyone diagnosed as nicotine-dependent or who couldn't stop after being advised by a doctor to do so could sign on to Castano.
Gauthier's class action will try to make a jury believe a corporate crime story: that for at least thirty years the tobacco companies knew nicotine was addictive, learned precisely how to control the dose and hid what they knew from the American people. Making the charge stick means proving a conspiracy to bring off the deadliest, longest-running fraud in business history.
Most of the lawyers on Gauthier's team were seasoned in successful struggles with manufacturers of asbestos, breast implants, the Dalkon shield and other hazardous products. Gauthier himself chaired the plaintiffs' committee in the DuPont Plaza Hotel fire case in San Juan in the late eighties - a $250 million award-and the MGM Grand Hotel blaze in Las Vegas. A global suit on breast implants netted $4.3 billion. But as the jackpots got bigger, so did the plaintiffs' committees, which led to vicious infighting. Determined not to let this happen in Castano, Gauthier handpicked the attorneys. After decades of futility, the top rank of the country's personal-injury lawyers would be taking on the cigarette manufacturers for the first time.
One Castano lawyer calls Gauthier "Ike" for marshaling this unprecedented invasion force, whose member firms are
involved in almost every important tobacco lawsuit. If Gauthier is Eisenhower, then Ronald Motley is Patton, a charismatic, acid-tongued, cowboy boot-wearing legal warrior. He is the man some say the industry should fear most in a courtroom and the leading candidate to try Castano. The son of a South Carolina gas station owner, the 50-year-old Motley is arguably the best plaintiff's trial lawyer in the country-certainly one of the richest, having won billions of dollars in asbestos awards since the mid-seventies. But friends say money has little to do with his interest in tobacco litigation.
"My mother died of emphysema from smoking, and after that I swore I'd get 'em," said Motley. "Now you asked why I'm in this? That's why. And I'll tell you something else," he said, a vein in his neck bulging as he warmed up in his New Orleans hotel room. "You can't find a family in this country they haven't touched. That's why we're going to win this thing."
He smiled. "Eventually."
While Gauthier unleashed the class-action approach on tobacco suits, Motley put his energy into finding a more sympathetic plaintiff than a smoker who'd puffed himself to death. His search led him to Burl Butler, who.never smoked a cigarette but apparently died from inhaling the smoke of his customers. Motley reasons that a jury may find it easier to bring a verdict against the industry if all the victim did was breathe the air. He thinks another way around the blame-the-smoker tactic is a Mississippi state suit he helped design that would force the tobacco companies to reimburse the state for the health care costs of indigent smokers. Three other states filed
similar actions, and Motley is trial counsel for two of them.
To understand what the anti-smoking movement is up against in court, you have to see a cigarette lawsuit in action. At a Castano hearing a year ago, no fewer than thirty industry lawyers were dispatched to New Orleans to press for immediate dismissal. In the legal trade it's called the "wall of flesh."
Despite the fact that four months earlier the heads of the tobacco companies swore to Congress that they believe nicotine is not addictive, one of the lawyers began arguing that the case should be thrown out because the plaintiffs knew for years they were nicotine addicts and should have sued earlier. "The Surgeon General told the nation in 1988 that nicotine was the substance in tobacco that caused addiction and that tobacco addiction was similar to hard drugs such as cocaine and heroin," boomed the lawyer. "It was on the cover of Time," he said. "Couldn't be clearer than that, Judge."
The key to any tobacco suit is documents, the DNA evidence of product liability cases. The critical turning points in asbestos litigation came when corporate reports were unearthed that unequivocally demonstrated the industry knew the hazards of its product. In another cigarette case in New Jersey, Motley is trying to unlock 1,500 explosive documents now under court seal in the hope that they may show the tobacco companies concealed potentially unfavorable health studies by bypassing the Council for Tobacco Research, their supposedly independent scientific funding organ. Instead, dangerous research was supervised directly as "special projects" by the companies and their law firms to cloak the work in attorney-client privilege and prevent its discovery in a lawsuit.
The manipulation of science is a key issue in Castano and other suits because schemes like "special projects" are powerful evidence of fraud, and fraud can trigger a crushing series of punitive damage awards. For that reason, the cigarette companies have fought tenaciously to keep the special projects documents sealed. Motley is now challenging the privilege under a crime/fraud exception.
The fear of product liability suits evidently led Brown & Williamson, makers of Kool, Viceroy and other brands, to create a comprehensive coding system to organize sensitive documents. A fifty-four-page master summary of the system prepared in 1989 offers an intriguing glimpse into how the company rated its own vulnerabilities, with the most delicate material being marked with a "1." The summary includes subject headings such as "Manipulation of Research/Data" and "Document Retention/Destruction." Another was titled "Significance-Target Markets" and read: "Unless there is a slur or an otherwise significant issue contained in a document or discussing a minority target market, apply normal significance to these documents. . . . If the document targets persons who are 18 to 21, i.e., 18 through 20, assign a significance of '2? Assign a significance of '1' if the document targets persons under 18." Documents dealing with "lawyer involvement with scientists" also got a rating of 1.
In the end, many things were hauled under the mantle of attorney-client privilege, including industry lists of cigarette additives. One company list of more than 200 ingredients, stamped "Attorney Work Product" on every page, shows flavorings and their code names. Coca flavor was BINNET; pulverized deer tongue was CARPAS; propylene glycol was GRELANTER. All three were marked with an asterisk for "potentially hazardous."
It was tobacco's manipulation of science that brought the Castano lawyers to Washington, D.C., last year. In order to maintain its position that nicotine is not addictive and that no "causal link" has been shown between cigarette smoke and disease, the industry has funded a stable of scientists who cite one another, gain credence through publication in scholarly journals, the Occupational Safety and Health Administration began hearings this past fall on a proposed rule that would ban smoking in about 6 million workplaces, the well-oiled industry machine simply buried the agency under testimony - R.J. Reynolds alone was responsible for more than 15,000 pages of submissions.
Working pro bono, the Castano attorneys represented health and labor groups and cross-examined tobacco-funded witnesses, which gave them a sneak preview of experts who might later testify for the cigarette makers. One target was Duke University economist W. Kip Viscusi, who expounded on his theory that cigarette smokers who die prematurely save society money in pension and nursing-home costs. Another witness conceded his testimony had been edited by cigarette company lawyers. R.J. Reynolds toxicologist Chris Coggins had to explain why his company spent millions of dollars developing the smokeless Premier cigarette if the industry is confident tobacco smoke is innocuous. Unhappy with the way things were going, Philip Morris withdrew in November.
Given a choice, the tobacco lawyers would rather talk about nicotine and addictiveness than what everyone calls "the youth issue," the most emotionally charged segment of struggle over tobacco. Some lawyers believe that Castano is most likely to win if it can convince a jury that the industry targets children to replace the over 400,000 smokers who die of cigarette- related disease each year and the thousands of others who quit. There's plenty of anecdotal evidence to support the charge. Ad campaigns like that featuring Joe Camel have dramatically boosted the size of the illicit youth market, to the point where a study released last month found that almost one of every five eighth graders smokes, up 30 percent in three years. Another survey showed that 25 percent of the high school seniors who tried cigarettes had done so by the sixth grade. In 1977, a Canadian cigarette maker studied why children begin smoking: "Ads for teenagers must be denoted by lack of artificiality, and a sense of honesty. Attempts at the use of celebrities like Farrah Fawcett or O.J. Simpson do not really click. If freedom from pressure and authority can be communicated, so much the better."
All four of Castano's class representatives started smoking as teens, as did Gauthier's three daughters, a defiance by otherwise obedient children that puzzled and infuriated him. "We're going to show the American people they went after children knowing that it's going to addict them, knowing full well it's going to cause cancer, emphysema and cardiovascular disease," said Gauthier. "They choose to kill our kids. I think that's a strong argument."
With tort reform brewing, the tobacco industry may yet dodge even these harpoons. However, disgust at the world's most profitable and peculiar product is growing. As two armies of lawyers gird for battle in New Orleans, the issue of youth targeting is a mystery weapon that could decide the outcome. The difference between a sinister ad campaign and making the youth charge stick in court is considerable. But somewhere in the dark world of cigarette company memos, there just could be a folder of proof.