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Special Event

Philip Morris Counsel Calls Judgment 'Grossly Excessive'

Aired July 14, 2000 - 4:11 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RHONDA SCHAFFLER, CNN ANCHOR: We wanted to go now to Philip Morris news conference, after this verdict was announced. It's in New York.

Let's listen in.

(JOINED IN PROGRESS)

BILL OHLEMEYER, GENERAL COUNSEL, PHILIP MORRIS: Time after time juries have returned verdicts for tobacco companies in these cases, because separate and apart from what they hear and believe about cigarette smoking or tobacco companies, they believe that smokers have knowledge and awareness of the risk of smoking and are legally responsible for those choices.

Six years ago, plaintiffs' lawyers thought they devised a way to avoid the legal issue of personal responsibility and it involved the use of a procedural device known as a class-action.

In 1994, a national class-action case, known as the Castano (ph) case, was filed in New Orleans and the class was certified by the trial judge. At about that same time, the Engle (ph) case was filed in state court in Miami, and eventually a class was certified by the trial judge in Dade County. In 1996 those two cases took very different paths.

The Engle class certification was upheld by the appellate court in January of 1996 and the case proceeded toward the trial that's just been completed. In June of 1996, however, the Fifth Circuit Court of Appeals, the United States Circuit Court of Appeals, decertified the Castano class. Because individual issues determine liability in smoking cases, the court concluded that these kinds of claims could not be aggregated or combined, and tried as class-actions or as group cases.

After the Castano court rejected a nationwide class-action, the plaintiffs' lawyers filed dozens of statewide class-actions in state and federal courts across the country. Each of those cases required a judge and usually an appellate court to decide whether to certify the case as a class.

In 28 cases, state and federal courts across the country have reached the same decision. They've concluded that certifying class- actions in tobacco cases does not make sense. It doesn't make sense legally and it doesn't make sense practically.

Almost two dozen state and federal courts across the country have concluded in 28 cases that you cannot try a tobacco case as a class- action because it violates legal principles and it creates factual problems that can't be dealt with fairly in a case like this.

Now we have a punitive damage verdict that purports to represent a class-wide verdict but really decides nothing definitive. It is a verdict that awards money to no one, because only three individual claims were resolved in this case on the ultimate issues of liability and compensatory damage.

Today's verdict is truly a verdict for no one. Under the peculiar trial procedure in place, there will have to be thousands of cases tried and thousands of appeals decided before one penny of this award can be paid to any plaintiff, including those whose cases were tried this year.

We believe the verdicts grossly excessive and also illegal. As punishment, it's wildly out of sync with the evidence the jury heard and the law governing such damage awards. As deterrents it's unnecessary.

Philip Morris has found substantial common grounds with states and many other groups that have traditionally been aligned against the tobacco industry. At Philip Morris, we are changing the way we do business. We're sincere about those changes. We're making efforts to reduce underage smoking and develop new products and to discuss federal regulation in a way that we believe makes sense for the industry and also for the country.

Philip Morris does not need to be deterred from the kind of conduct alleged by Mr. Rosenblatt in this case. It is already embarked on a new course.

Responsible people across the country need to see this verdict for what it is: It mocks the judicial system. It was based on an illegal trial, and a novel and confused trial plan. It resulted and was presided over by a judge who incredibly is a member of the class. It was pursued by a plaintiffs' lawyer who would become the richest person in America if this verdict were upheld on appeal. Purely and simply it's a verdict that should not be allowed to stand.

We will pursue the appeal of this case as vigorously and I think with substantially more success than we have defended the case at trial. We will doubtless spend much of the coming weeks and months in the appeal process, explaining and documenting the seemingly endless list of errors and events that have punctuated this two-year trial.

Before I take your questions, though, I want to assure those who have a stake in the company that we will pursue every conceivable avenue of attack on this verdict. We believe we have compelling grounds for appeal.

And I'm now happy to take your questions.

Yes.

QUESTION: What would you say to (OFF-MIKE) around the world who might be thinking that tobacco (OFF-MIKE) their money?

OHLEMEYER: Well, it's important to understand that litigation has been a part of tobacco in this country for almost 50 years. These companies have been successful in defending these cases because juries believe that people who smoke make informed choices and are legally responsible for those choices.

What this trial and this procedure is a novel attempt to avoid the legal consequences of those issues and make it impossible for a company to appropriately and legally defend itself.

I think the fact that 28 other cases in which attempts have been made to certify these kinds of cases as class-actions have been rejected is a pretty clear indication that this verdict is going to be subject to a lot of scrutiny on appeal and is unlikely to withstand the appellate process.

SCHAFFLER: The general counsel of Philip Morris summing up the reaction to today's verdict. An appeal is planned. The verdict was called "grossly excessive" and "illegal."

STREET SWEEP will be right back after this.

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