Big Tobacco: the Gift that Keeps on Giving

All aboard the Big Tobacco gravy train! For those that thought the heyday of multi-billion dollar lawsuits against Big Tobacco were over, think again. The recent Supreme Court decision in Altria v. Good has allowed a lawsuit in Maine to continue against Altria (formerly the much more unhealthy sounding Phillip Morris) for deceptive marketing practices in selling “Light” cigarettes.

Good news for class-action trial lawyers, bad news for tobacco companies. Although the case doesn’t mean anything as far as liability-yet-the last time Big Tobacco faced an onslaught of lawsuits, it lost an enormous amount of money. Most of those losses came without even setting foot in a courtroom. Altogether, lawsuits against Big Tobacco have cost them almost half a trillion dollars since their heyday in the nineties. These cases had been slowly trailing off, but this suit clears the way for approximately 40 other lawsuits already filed in state court.

And when there is blood in the water, the sharks start swimming. Especially when the catch is this big.  In 1998, for instance, Mississippi trial lawyer Richard Scruggs landed 3% of a $200 billion settlement against tobacco companies-that’s about 6 billion dollars. Not bad for not even going to trial. (Apparently $6 billion was not enough for Scruggs, however; he was indicted in 2007 for bribing a federal judge in a dispute over legal fees.)

The payoff from the last round of lawsuits against Big Tobacco was so big that Congress tried to cap the ridiculous legal fees that were being handed out. Most were clearly out of line with the true victims in these cases, and well beyond every attorney’s ethical obligation to only collect “reasonable” fees. In Florida, for instance, a proposed settlement would have given lawyers over $7,000 per hour, 24 hours a day, 7 days a week, for the duration of the trial. The smokers who died and the families who suffered due to the tobacco companies’ manipulative marketing did not get paid in their sleep, why should their lawyers?

This is not news to anyone familiar with class action lawsuits; the lawyers walk home with the actual cash and the rest of us get a free gift card. Although those of us in the profession do stand to benefit from these lawsuits financially (at least those of us in the business of class actions), how do these kinds of suits make lawyers look in the public eye? Do these kinds of lawsuits, and the perceived unequal division of damages amongst clients and attorneys, contribute to the public’s overwhelming negative outlook on attorneys? Will this cost you, Mr. Solo Practitioner, a client because he or she simply doesn’t trust you?