No Class, No Action

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Today the Florida Supreme Court upheld an appeals court decision that threw out an absurd $145 billion award in a class action suit against the major tobacco companies. The court concluded that the punitive damages–the largest such award in history–were "excessive as a matter of law" and that in any event the case should not have been allowed to proceed as a class action, since it involved claims of deception by some 700,000 smokers, each of whom had a different history of exposure to and reliance upon tobacco company statements. As I noted at the time of the verdict six years ago, the decision was a striking example of how jurors pull numbers out of thin air to express their emotions.

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  1. Finally, the Florida Supremes learned how to RTFL.

    It’s a good day for individual responsibility — and a great day for hacking away at the legal thicket raised by endless class-action lawsuits.

  2. I demand the sum… OF 1 MILLION DOLLARS.

  3. I want this to be a matter of record:
    1. I don’t know of any risks related to smoking. I think I learned somewhere that they’re nutritious.
    2. I am going to take up smoking, and I’m going to smoke for a long time because it’s so good for you.

    I’ll wave at you fuckers from my yacht.

  4. I don’t understand this.

    If the courts can overturn jury awards as they see fit, then why does the jury even get to do the awarding? Why don’t they just let the judge award whatever he / she deems is fair “as a matter of law” (whatever the hell that is), and only let the jury decide guilty / innocent or percentage of fault type questions?

    I don’t particularly care one way or another about this particular verdict, but I have noticed quite a bit of awards being reduced as “excessive” lately.

    By whose standard are these punitive damages excessive? Is there some kind of formula? Or are these reductions just as arbitrary as the jury awards ?

    Why let the juries decide the amount of award if on appeal if the judges are just gonna reduce it as they see fit — even if they find nothing else wrong with the case?

    It seems to me that the only way that a judge / appelate court should be able to alter the award is if they find flaws in the case that would have altered the outcome or some other improper ruling by the presiding judge (i.e allowing / disallowing evidence improperly) affected the case.

  5. I have said it before and I say it again: Laymen should have no part in determining the amount of any reward beyond $1,000,000. Amounts below this are numbers that are associated with our lives – we can “feel” the difference between $50,000 and $150,000. The same cannot be said of millions and billions. These awards have to be determined by specially-trained judges, with backgrounds in economics, mathematics, precedent, and law.

    Allowing laymen to choose the rewards in big cases such as these inevitably results in the virtual lottery we have today.

  6. Allowing laymen to choose the rewards in big cases such as these inevitably results in the virtual lottery we have today

    I’ll go you one better and propose that all punitive damages be paid into, say, a general state victims fund or some such, and not be counted when computing lawyers’ percentages.

    They’d still be punitive, but poof — no more lottery-winning plaintiffs or attorneys.

  7. Loser-pays would also help out.

    I’m forced to wonder out loud, too, whether simply removing the concept of a “class” action might not go a long ways towards straightening things out in our torts system as well?

  8. “whether simply removing the concept of a ‘class’ action might not go a long ways towards straightening things out in our torts system as well?”

    Except that businesses often like them because the mechanism makes it possible to consolidate a large number of cases and settle them for typically far lower amounts than what it would have cost to do so individually.

  9. According to the article I read about this case, each of the plaintiffs can still choose to sue the tobacco companies separately. Even if only ten percent of the originally number in the class-action suit decide to take this course of action, wouldn’t that be disastrous to the tobacco companies forced to defend themselves against each individual suit?

  10. Shorter Sullum:

    When juries are allowed to do what they were meant to do, I am happy! (jury nullification)

    When juries are allowed to do what they were meant to do, I am sad! (holding corporations responsible for what they ACTUALLY do and say)

    Disclaimer: I smoke (only hand rolled, finest tobacoo) and I love it. But…the so-called “tobacoo companies” (they aren’t, they are marketing and packaging firms that tend to specialize in post agriculture processing) are something else. It’s hard for me to see that these weren’t some of the worst frauds and con artists around. I have no clue why we aren’t supposed to hold con artists responsible for their cons.

    Can you really not see the connection between Jury nullification and your position here? Isn’t the distrust in juries at the root of why Judges lie to them about their duties? Acutally, I think juries are wrong a lot of the time, which is of course why we need a decent appelate structure. But in this case, we have con men, working the nation, their own documents indicated they knew they were involved in a con. Sure, people who fell for it are dumb. I’ve never conned myself into believing that the big T won’t hurt me, but the real question the jury was asked. Did the companies engage in a “con”. They documents in the companies own files say “Yessiree…and we’d do it again in a heartbeat, if you would only let us”.

    Defending this con seems to me to be the same as defending the con the .gov does in the drug war.

    Ho hum. I know, I’m just an idiot. Don’t know what I’m talking about.

  11. I’ll go you one better and propose that all punitive damages be paid into, say, a general state victims fund or some such, and not be counted when computing lawyers’ percentages.

    They’d still be punitive, but poof — no more lottery-winning plaintiffs or attorneys.

    Sounds great. Will you pay me $475 an hour while I pursue those punitive damage claims? That’s what many defense lawyers make and since I, as a plaintiff’s lawyer, won’t be getting any portion of the punitive damage award anymore I won’t be paid for bringing punitive damage claims unless you do.

    Why don’t you just propose directly what your proposal will accomplish indirectly: eliminate all punitive damages for corporation even if they intentionally kill people. Sounds like a dandy idea.

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