Business Law: Tobacco's Bout with Cancer

Edwin Green was a Florida construction executive who smoked one or two packs of Lucky Strikes daily for most of his adult life and died in 1958, at the age of 49, of lung cancer. His widow and son sued for $1,500,000 damages from the American Tobacco Co., maker of Luckies. Last week, after the claim had been struck down by a district court and a federal appeals court, the Florida Supreme Court handed down an "advisory opinion" that both the manufacturer and the distributor of cigarettes can indeed be held liable for damages.

The entire $8 billion-a-year U.S. tobacco industry shuddered, and stocks of the five major cigarette makers slipped by 2% to 3% in the two days after the Florida ruling. In similar damage cases elsewhere, the courts have been trending against the cigarette companies. At first, courts from Massachusetts to Louisiana threw out the damage claims; then last November a federal district court jury in Pittsburgh found that Chesterfields (Liggett & Myers) had been "one of the causes" of lung cancer in a suing carpenter, but absolved the company on grounds that the smoker had knowingly assumed the risk. The Florida court went much far ther, ruling that American Tobacco's very act of marketing and advertising contained an "implied warranty" that cigarettes are safe.

If the decision stands after future appeals, it could open all the cigarette companies to damage claims from Florida lung cancer victims or their heirs and set an influential, though not inflexible, precedent that courts in other states will refer to. Says Chester Inwald, general counsel of the National

Association of Tobacco Distributors: "What the cigarette companies will have to contend with is the ghost of advertisements long past, which claimed such things as 'nose, throat and accessory organs are not adversely affected.' " But lawyers do not think that the Florida ruling could be used as a basis for cirrhosis victims to sue whisky distillers, or cholesterol-clogged heart patients to sue dairy companies. Reason: No court has ever held that such products are harmful.