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Settlement, Tobacco

Settlement, Tobacco





From 1954 to 2006 three separate waves of civil litigation in the United States occurred against the tobacco industry based on claims of severe health problems associated with tobacco use. Tobacco industry corporations sued during this period included Philip Morris, R. J. Reynolds, Brown and Williamson, American Tobacco, United States Tobacco, British American Tobacco, Lorillard, and the Liggett Group. Also sued during this period were tobacco industryaffiliated organizations including the Tobacco Institute, Center for Indoor Air Research, and Council for Tobacco Research. All three of these affiliated organizations became defunct in 1999 due to the 1998 Master Settlement Agreement signed by the tobacco industry and attorneys general from forty-six states.


From 1954 to 1978 the first wave of 125 individual personal injury lawsuits mostly related to lung cancer were filed against the tobacco industry based on the legal theories of negligence, misrepresentation, and breach of warranty. The tobacco industry argued in its defense that there was no proven connection between smoking and disease. Few of these cases went to trial and none were decided against the tobacco industry.

From 1979 to 1993 a second wave of about two hundred individual personal injury lawsuits were filed against the tobacco industry using the legal theories of negligence, misrepresentation, breach of warranty, breach of product liability, and negligent failure to inform. In 1964 after the United States surgeon generals landmark report linked smoking to lung cancer, the tobacco industry continued to maintain in litigation that while there was no proven link between smoking and disease, smokers also assumed the risk when using tobacco due to health warning labels on cigarette packs. Cigarette warning labels were mandated by the federal Cigarette Labeling and Advertising Act of 1965.

Only eighteen of these cases were litigated with only one case filed in 1983 in New Jersey, Cipollone v. Liggett Group, Inc., decided against Liggett Tobacco Company. In 1985 a jury awarded $400,000 to Tony Cipollone, the husband of the original plaintiff Rose Cipollone who had previously died of cancer. This decision was partially overturned when in 1992 the United States Supreme Court ruled there was no liability due to failure to warn of health dangers because of federal cigarette pack warning labels. The United States Supreme Court sent the case back to the New Jersey federal court to rule on the remaining legal claims. However, due to the expense of further litigation the plaintiff dismissed the lawsuit.

In the third wave of cases from 1994 to 2006, several individual and private class action lawsuits primarily in California, Florida, Oregon, Kansas, and Puerto Rico were decided against the tobacco industry using legal theories of torts, fraud, conspiracy, misrepresentation, breach of warranty, breach of product liability, and negligent failure to inform. Legal theories used in state class action cases included using statistics to ascertain if a percentage of Medicaid smokers suffered from disease due to smoking and violation of state tort, consumer protection, antitrust, and racketeering laws. This theory was used to make it easier to sue and win. It was much more difficult to win arguing direct causation between tobacco use and a disease and death. Statistical trends represent an easier form of proof.

The first important private class action lawsuit was Castano v. American Tobacco filed in federal court by sixty plaintiffs law firms on May 9, 1994, on behalf of all nicotine addicted individuals. While the class was certified by federal district Judge Okla Jones on February 17, 1995, this class was later decertified on May 23, 1996, by the U.S. Fifth Circuit Court of Appeals. The court ruled this class certification was inappropriate because there were too many differences in the plaintiffs claims and wide differences in state laws making the case unmanageable. This decision initiated several new private and state class action lawsuits. The first state lawsuit was filed by Mississippi in 1994 followed by Florida, Texas, and Minnesota. Florida and Mississippi settled in 1997 and Texas and Minnesota settled in 1998 for a combined total of $40 billion allocated over twenty-five years adjusted for inflation and no spending restrictions.

In 1998 the Master Settlement Agreement with the other forty-six states was signed. Payments of $206 billion over twenty-five years adjusted for inflation were awarded to the states. Due to the lack of spending restrictions in the settlement, most states by 2006 had not provided minimal funding for state anti-tobacco programs as defined by best practices by the Centers for Disease Control and Prevention. These state anti-tobacco programs were to include community programs, school programs, youth enforcement, counter-marketing, cessation, and state anti-tobacco education programs.


In the federal district court case of United States of America v. Philip Morris USA Inc., et al. filed by the United States Justice Department in 1999 and decided in 2006, Judge Gladys Kessler ruled that the tobacco industrys fundamental defense in litigation from 1954 to 2006 was a purported claim of insufficient evidence linking smoking to disease. Internally, however, the tobacco industry long acknowledged that cigarettes were harmful and also addictive.

Judge Kessler also ruled that those in the tobacco industry were racketeers as defined under the federal Racketeering Influenced and Corrupt Organizations Act. The court decision also ordered the tobacco industry to permanently refrain from making misleading statements regarding the health and safety of cigarettes and to make public corrective statements on the dangers of cigarette addictiveness and the serious health effects of smoking and secondhand tobacco smoke. This ruling was appealed by the tobacco industry and will be reviewed by a higher court.


While the tobacco industry was highly successful in the first two waves of litigation that were filed from 1954 to 1994 on behalf of individual plaintiffs, the third wave of litigation from 1994 to 2006 represented a dramatic reversal of legal fortune for the industry. This reversal of legal fortune has been due to the advent of new legal theories including state Medicaid reimbursement and revelations of significant industry misconduct revealed in previously secret industry tobacco documents.

SEE ALSO Disease; Foundations, Charitable; Settlement; Settlement, Negotiated; Smoking; Tobacco Industry


Blanke, Douglas. 2002. Towards Health with Justice: Litigation and Public Inquiries as Tools for Tobacco Control. Geneva, Switzerland: Tobacco Free Initiative, World Health Organization.

Givel, Michael. 2006. Failure to Change Through Multiple Policy Instruments and Venues the Tobacco Industry Policy Subsystem in the States from 1990 to 2003. Policy Studies Journal 34 (3): 453-457.

Givel, Michael, and Stanton A. Glantz. 2004. The Global Settlement with the Tobacco Industry: 6 Years Later. American Journal of Public Health 94 (2): 218-224.

U. S. District Court for the District of Columbia. 2006. U.S. of America, Plaintiff, Civil Action No. 99-2496 (GK) and Tobacco-Free Kids Action Fund, American Cancer Society, American Heart Association, American Lung Association, Americans For Nonsmokers Rights, and National African American Tobacco Prevention Network, Intervenors, v. Philip Morris USA, Inc., (f/k/a Philip Morris, Inc.), et al., Defendants.

U.S. Supreme Court. 1992. Cipollone v. Liggett Group (90-1038), 505 U.S. 504.

Michael Givel

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