Chapter 21, Part 1

By Frank Tursi, Susan E. White and Steve McQuilkin
JOURNAL REPORTERS
© 1999 Winston-Salem Journal

Inside a ballroom at Le Meridien Hotel in New Orleans, casually dressed attorneys and financial analysts -- mainly men in sport shirts and khakis -- mingle about a room that is bathed by the soft light from crystal chandeliers.

In January 1976, a crowd gathered for groundbreaking ceremonies for the new RJR World Headquarters building.

Some stand idle in the hallway over a breakfast buffet of croissants, cheese and jelly-filled danishes, plump strawberries and thin slices of cantaloupe. Others sit patiently inside the ballroom at one of 15 tables -- all covered with white tablecloths -- thumbing through the 3-inch notebooks of legal material.

The 100 or so plaintiffs' attorneys who have gathered in New Orleans during the last week of April 1999 are a sure sign that the tobacco industry's future will be filled with lawsuits from sick smokers determined to make the cigarette companies pay for their illnesses.

The R.J. Reynolds Tobacco Co. was once the largest cigarette company in the United States with a powerhouse of best-selling brands: Winston, Salem and Camel. But times changed, and as the case against smoking became more pronounced in the 1960s, RJR failed to adapt to the marketplace. Its rivals would eventually rush past it, and RJR's efforts to catch up would have a profound impact on the company and the cigarette industry.

This litigation conference could be called ''How to Sue Tobacco 101.'' A fraternity of legal top guns, including Norwood ''Woody'' Wilner, Ron Motley and Wendell Gauthier, are there. to share legal strategies and war stories. They will teach their fellow attorneys everything from nailing the cigarette companies with their own internal documents to picking the perfect plaintiff.

No one knows more about the subject than these guys. They are among a handful of legal generals -- primarily good-old Southern boys -- who have been fighting cigarette companies and their corporate law firms inside and outside courtrooms throughout the 1990s.

Life is a lot easier for these lawyers than for their predecessors, who struggled lawsuit by lawsuit to crack the defenses of the tobacco industry. They didn't sit around in posh hotels discussing legal strategies. They worked and they waited for the courts to cut them some breaks and for society to come around to their side of the fight.

The Second Wave

Throughout the 1950s and '60s, cigarette-makers faced only a few lawsuits. The cases were either thrown out of court, dropped by the plaintiffs who couldn't afford to pursue them, or won outright by the companies. The tobacco companies had the money and the know-how to win, and they were determined to stay in business. (Colby footnote)

''The industry's success in the litigation is primarily because at the outset a decision was made to fight the lawsuits all out, never considering settlement in even the smallest sum,'' Edwin Jacob, at the time one of RJR's lead lawyers, wrote in a 44-page report in January 1978. ''The industry felt, then, and still does that if any case were lost or settled, there would be thousands of potential claimants.''

The plaintiffs' dismal track record wasn't much of an inducement, and few smoking lawsuits were filed during the 1970s. But the number of cases started to climb by the 1980s as social, economic and legal changes sparked the ''second wave'' of tobacco litigation.

For years, the industry had convincingly argued that the causes of cancer and other diseases that had been linked to smoking were an ''open question.'' It backed up its arguments by relying on scientists who could confidently testify that while smoking was suspected of causing health problems, there was no proof that it actually did.

But by 1985, public opinion was shifting, forcing the tobacco companies to take a more serious look at how they defended themselves.

Plaintiffs' lawyers now had access to nearly 50,000 scientific reports that confirmed the health hazards of smoking, and doctors blamed cigarettes for causing 350,000 premature deaths in America each year. Smoking was linked to cancer, heart disease and chronic obstructive lung disease such as bronchitis and emphysema.

This medical evidence inspired community health groups to mount massive public-relations campaigns urging smokers to put down their cigarettes.

Socially, cigarette smoking was getting kicked in the butt. The once-glamorous custom was increasingly frowned upon, especially by health-conscious Americans who had discovered the joys of exercising.

In offices and restaurants, ''No Smoking'' signs popped up, forcing employees and diners to light up elsewhere. Insurance companies offered discounts on life-insurance premiums to nonsmokers. And on Capitol Hill, U.S. Surgeon General Dr. C. Everett Koop announced his goal of a smokeless society by the turn of the century. At the time, about 30 percent of adults smoked.

Legal attitudes also were shifting. For years, plaintiffs were told that if they smoked and got sick, they had no one to blame but themselves. But by the 1980s, most state courts said that even if a plaintiff was partly to blame for his injuries, he could still collect damages. Strict liability laws were modified so that plaintiffs, who used to have to prove that a manufacturer was at fault, now had to show only that the manufacturer's product was dangerous. Another key issue was whether cigarettes caused more public harm than good.

There was plenty of evidence that cigarettes were bad for you and that billions of dollars were being spent each year on smoking-related health problems. Still, the tobacco companies boasted that cigarette taxes helped the economy. Any ''pleasurable'' benefits were rarely mentioned in court.

In a New Jersey case in 1985, Frank Colby, the former head of RJR's scientific library, testified that he wouldn't necessarily urge the industry to stop making cigarettes even if it was proven to his satisfaction that smoking caused cancer. For some people, cigarettes were a ''lifesaver,'' Colby said. (The American University Law Review footnote; outline of legal, medical and social changes that sparked a second wave of litigation.)

''Being able to cope with society's problems. . . . That may save more lives than lung cancer,'' Colby testified.

The theory of implied warranty was also reinforced so that if a product was on the market, it was generally assumed to be safe.

These changes opened up new opportunities for plaintiffs. Nationwide, the makers of asbestos, contraceptive devices and breast implants faced multimillion-dollar lawsuits and possible bankruptcy. Spotting the trend, many plaintiffs' lawyers decided to take on the tobacco companies and their billion-dollar empires.

The World Watches One of the first to seize the new opportunity was Melvin Belli, San Francisco's flamboyant ''King of Torts.'' He had argued -- and lost -- the first tobacco lawsuit to go before a jury in 1960. Belli had sued the tobacco companies 20 times since then, each time hoping he had the case to take down an industry he considered abominable. Belli believed he'd found such a case in Santa Barbara, Calif.

John Galbraith was just eight days shy of his 70th birthday when he died in 1982. Since age 15, he had smoked Camels, Winstons and Salems, all RJR brands. For most of 54 years, Galbraith smoked as much as three packs a day. His addiction to cigarettes had such a stranglehold on him that he craved them even as he lay in a hospital bed suffering from lung cancer, emphysema and heart disease. His wife, Elayne, said she occasionally caught her husband removing the oxygen tubes from his nose just so he could sneak a smoke. Galbraith's last request before dying was to puff just one more cigarette. (Wall Street Journal footnote) (Winston-Salem Journal footnote) (Los Angeles Times footnote) (Legal Times footnote; information on Galbraith and Belli.)

After Belli heard Galbraith's story, he agreed to file a $100 million lawsuit against R.J. Reynolds Tobacco Co. Belli argued that the company's products addicted his client, caused his lung cancer and ultimately killed him. He also charged that RJR had failed to warn consumers of the risks of smoking.

The industry had not been tried on the addiction issue. Yet, medical evidence, including a 1982 report from the National Institute on Drug Abuse, suggested that nicotine was addictive, and similar to cocaine and morphine. Belli was certain that a jury, especially one filled with smokers, would understand Galbraith's difficulty in quitting.

But he was also well aware of how the industry would respond. The tobacco companies always argued that the plaintiffs were personally responsible for their injuries because they made the decision to smoke. They knew the risks involved and even had been warned about the dangers since 1966, when warning labels began appearing on each pack of cigarettes. Tobacco attorneys also noted that smoking couldn't be addictive because 35 million Americans had quit.

Belli believed that Galbraith was so addicted to nicotine that the warning labels meant nothing to him. He was convinced that Reynolds' advertising, which primarily showed beautiful, healthy and athletic models, was designed to undermine the warning labels.

''Through their advertising, they use every blandishment there is to get young people hooked on smoking -- and then turn around in court and say they're not liable because the smoker assumed the risk,'' said Belli. ''The name of their game is hypocrisy. More formally put, they are . . . liars.''

Belli was 77, but he still knew how to make an entrance and an impression. He sailed into Santa Barbara aboard his 110-foot yacht, the Pfeiffer. He nicknamed it ''The Adequate Award.'' In court, he often arrived in black snakeskin cowboy boots and snazzy Western-cut suits with a silk handkerchief poking out of the pocket. With thick white hair and dark round eyeglasses, Belli oozed with style. The press couldn't get enough of him.

''When you're the king of torts, you've got to live like the king of torts,'' Belli boasted.

Tobacco lawyers expected that kind of brashness from Belli, but they didn't take it lightly. In fact, they were extremely worried. The lawyers had not faced a trial in decades, and now they had two to deal with. Along with the Galbraith case, a Oneida, Tenn., man was suing Reynolds for $55 million.

Floyd Roysdon claimed that more than 38 years of smoking Camel and Winston cigarettes caused circulation problems that led to the amputation of his left leg in 1983. His lawsuit charged that RJR failed to properly warn him of the risks of smoking its products and that the cigarettes were defective and unreasonably dangerous. (The American University Law Review footnote; details on Floyd Roysdon vs. R.J. Reynolds Tobacco Co.)

Lawyers, stock-market analysts and others also were watching several cases in New Jersey, including one involving a housewife who had died from lung cancer. The attorney for the family of Rose Cipollone was taking a novel approach, accusing the cigarette companies of fraud and conspiracy, and fighting to make public the most secret of industry documents.

Nationwide, there were about 45 lawsuits pending against the industry. Pressure was mounting, particularly for R.J. Reynolds, the primary defendant in the California and Tennessee cases. There was a feeling that the company might lose the Galbraith case and, if so, the entire industry was financially at stake.

No one was more aware of the potential risks than RJR's lawyers. In fact, they had been preparing for this moment for some time.

• Coming Thursday: Building an Army