Cigarette makers once
were so hard to beat in
court that many top
lawyers refused to take
them on. Then a group
of attorneys, mostly in
small Southern towns,
found new ways past
tobacco’s defenses —
and now, the industry
hinting about a deal.
Don Barrett hailed from
Lexington, Miss. and he liked to
think of himself as a small-town
lawyer—"slow thinking and slow
talking," as he put it. He was a
stocky man, relaxed and
unpretentious. He spoke
frequently in Southern aphorisms,
such as the one he used to describe
his ongoing, quixotic legal battles
with the tobacco industry: “If
you’re going to fight the snake,
kill the snake.’ In the plaintiffs’
bar—the section of American
lawyerdom that represents victims
of airline crashes and sues big
corporations when they sell faulty
products—some of Barretts close
friends were unabashedh’ rich,
flying between trials and
settlement conferences in private
Don Barrett with a jets. Barrett, however, was
courtroom exhibit. decidedly not rich.
have been his ‘life’s
By Benjamin Weiser
Photos by Danny Turner
His basic problem was that he hadn't killed the snake. Barrett said that he and his colleagues in the plaintiffs'
Since 1988. he had spent hundreds of thousands of bar were about to turn the corner: Barrett was
dollars trying three smokers' cases against the tobacco involved in two innovative lawsuits, based on
industry But he had not won a single dollar in powerful new legal theories that might finally produce
damages. His failures sometimes threatened him with a big victory against the tobacco industry.
insolvency. Kasowitz listened attentively and then said, “That's
One day in November 1995, Barrett found himself in interesting. Is there no end to it?"
the skyscraper office of Marc E. Kasowitz a “There is no end to it,” Barrett answered. it's going to
Manhattan civil lawyer. Barrett and Kasowitz had be total defeat for the tobacco companies, because
recently concluded a settlement worth several hundred none have sense enough to realize that they could
million dollars involving lawsuit over allegedly settle the cases fairly easily and stay in business."
defective plumbing systems. Although they were on
opposite sides, Barrett had come to like and Kasowitz, Barrett explained that if the tobacco industry would
and he began to tell him about his "life's work," near agree to quit selling cigarettes to children, alter its
obsession with tobacco lawsuits. marketing in fundamental ways, and pay some of the
health care costs of smoking, "We could settle with
Barrett joked that he was looking forward to being one or two of them, anyway" But Barrett said that no
paid for his work in the plumbing case, as that would company was smart enough to do that.
"give me enough income to feed my tobacco habit for
another few years." as he recalls the conversation. Barrett didn't know that Kasowitz represented Bennett
Mississippi Attorney General
Michael Moore, front, with
plaintiffs’ lawyers Richard
Scruggs and Michael Lewis at
the Capitol in Jackson.
hey would have to negotiate in complete
secrecy. If the other major tobacco
companies learned that Liggett was about
to break ranks, they would stop at
nothing to block the settlement.
S. LeBow, an investor with a controlling interest in claiming wrongful death or illness stemming from
Liggett Group, the fifth-largest American tobacco addiction to cigarettes.
company. In fact, Kasowitz's partner, Daniel R. The deal rocked the tobacco industry Officials at the
Benson, had already suggested to him an idea that had major cigarette companies denounced IeBow as an
been anathema in the tobacco industry for decades: a opportunist. Philip Morris Cos., the world's largest
legal settlement that would allow LeBow and Liggett tobacco firm and the most defiant, declared that it
to put the threat of massive liability over smoking would not settle. President Clinton called the deal "the
deaths behind them. LeBow wanted a deal in part first crack in the stone wall of denial" by cigarette
because he was waging a hostile proxy battle to take makers.
over RJ. Reynolds Tobacco Co., the nation's second-
largest cigarette maker. A settlement might help clear Amid all the noise came a statement suggesting that
LeBow's path. perhaps Clinton was right.
On December 5, Kasowitz and Benson took LeBow to In late March, Steven F. Goldstone, the CEO of RJR
lunch at Il Nido, a popular northern Italian restaurant Nabisco Holdings Corp., under pressure from
in midtown Manhattan. LeBow authorized his lawyers LeBow's takeover proposal, gave an interview to
to look into a settlement London's Financial Times newspaper. Was it possible,
was it conceivable, that America's decades-long
A few days later, Kasowitz astonished Barrett by tobacco liability wars could be ended with a
revealing that LeBow was his client. Kasowitz said comprehensive settlement?
they would have to negotiate in complete secrecy. If
the other major tobacco companies learned that "I don't know of a way, but I do know that it isn't the
Liggett was about to break ranks, they would stop at kind of thing that the tobacco industry would try to
nothing to block the settlement. obstruct, because we know that litigation is not good
for our companies." Goldstone said. The legislative,
Barrett agreed to work on a deal. Although Liggett executive, political, social and other sources" involved
controlled only a small fraction of the tobacco market, in the tobacco conflict could be "brought together to
a settlement would be an extraordinary symbolic resolve this Issue," Goldstone suggested. For its part,
breakthrough. Over several months, Barrett and two he said, the tobacco industry did not have "such a
other attorneys met quietly with Liggett lawyers in fight-to-the-death mentality that it would ignore
Houston, New York, Memphis and Miami in March. eminently reasonable solutions."
Liggett announced the result. The company agreed to
pay 5 percent of its pretax income for 25 years, up to a It has been just a few years since a group of Lawyers,
maximum of $50 million a year, for smoking mostly in small Southern towns, launched what has
cessation programs around the country and to cover proved to be the most successful wave of litigation
some health care costs incurred by states while ever aimed at the tobacco industry and already people
treating indigent smokers. Liggett also agreed to are asking a question that would have, until very
voluntarily comply with Food and Drug recently seemed ludicrous: Is tobacco's endgame here?
Administration proposals to try to curb smoking by At issue is whether the tobacco industry is poised for a
children and teenagers. In exchange, the company comprehensive settlement, roughly along the lines of
would receive assurances. pending federal court the Liggett deal, that would itt one fell swoop resolve
approval, that Liggett could not be sued by anyone the multiple lawsuits and conflicts involving the
American companies' domestic cigarette business. jury probes of the industry and its executives. During
Such a settlement would probably involve huge the last three years. the industry has sprung leak after
payments by tobacco companies that would, in effect, leak. with damaging disclosures from whistle-blowers
buy peace with the government, aggrieved smokers and internal documents surfacing in the news media
and their lawyers. Even if the price were tens of and in highly publicized congressional hearings.
billions of dollars, it would be easily affordable for the Crowning evidence of the new order includes both the
industry, whose profits increasingly come from sales Liggett settlement and a stunning verdict delivered
overseas. four months ago, when a tiny Florida law firm won a
For nearly half a century, despite hundreds of $750.000 judgment against one tobacco company,
thousands of American deaths each year due to driving down tobacco industry stock prices and
smoking, the tobacco industry has been nearly prompting plaintiffs' lawyers to declare that they
invulnerable in the US. Courts. Legal scholar Donald would flood the nation's courts with thousands more
W. Garner once noted a "striking irony" as he put it suits, At least one Wall Street observer has painted a
"The industry that markets the most dangerous "doomsday" scenario "if the litigation dam breaks."
product sold in America is the only industry that has For the first lime, "we detect an unmistakable
been completely sheltered from the storm of willingness by the industry to bargain, perhaps
twentieth-century product liability" Until this year, reflecting these litigation realities," Gary D. Black a
approximately 800 suits had been filed against tobacco analyst with Sanford C. Bernstein & Co.,
tobacco firms. About two dozen of those went to trial. wrote in a September 3 report to clients.
But not once was a cigarette company forced to pay Among the realities Black cites are "the sheer number
damages to a plaintiff. of great plaintiff counsels ... who have joined this
Now the industry is on the defensive. What is fight. and who have vast resources to continue the
different? Just about everything. After squashing effort even if it takes years."
lawsuits from individual smokers successfully for This sharp turn in the tobacco conflict is occurring
decades, Big Tobacco is facing much more formidable amid vigorous debate about how America should
legal challenges from state governments and a manage what has become, in effect, the
national coalition of trial lawyers representing institutionalization of disaster. The evolution of mass-
addicted smokers. The Clinton administration has injury law has produced a situation where today, as
declared war on tobacco, the FDA plans to regulate the country mass produces products, it also mass
cigarettes and limit marketing to young people, and produces liability.
the justice Department has launched criminal grand
On April 14, 1994 seven top
tobacco executives testified
before Congress. One by one,
they denied under oath that
nicotine was addictive.
From asbestos to the Dalkon Shield to silicone-gel the justice Department has launched criminal grand
breast implants, American civil courts have faced jury probes of the industry and its executives. During
successive waves of liability suits. Tobacco is the the last three years. the industry has sprung leak after
culmination of the trend. The latest tobacco suits leak. with damaging disclosures from whistle-blowers
claim to represent tens of millions of American and internal documents surfacing in the news media
smokers and more than a dozen state governments— and in highly publicized congressional hearings.
potentially a greater share of American society than Crowning evidence of the new order includes both the
any previous class of alleged victims. So large and Liggett settlement and a stunning verdict delivered
threatening have these lawsuits become that Congress four months ago, when a tiny Florida law firm won a
may attempt to take the litigation away from lawyers $750.000 judgment against one tobacco company,
and the courts altogether and impose a legislative driving down tobacco industry stock prices and
solution, if only to ensure the survival of an industry prompting plaintiffs' lawyers to declare that they
that is so prosperously entrenched in the American would flood the nation's courts with thousands more
economy, culture and political system; Philip Morris, suits, At least one Wall Street observer has painted a
for example, says it's America's largest corporate "doomsday" scenario "if the litigation dam breaks."
taxpayer. For the first lime, "we detect an unmistakable
Now the industry is on the defensive. What is willingness by the industry to bargain, perhaps
different? Just about everything. After squashing reflecting these litigation realities," Gary D. Black a
lawsuits from individual smokers successfully for tobacco analyst with Sanford C. Bernstein & Co.,
decades, Big Tobacco is facing much more formidable wrote in a September 3 report to clients.
legal challenges from state governments and a Among the realities Black cites are "the sheer number
national coalition of trial lawyers representing of great plaintiff counsels ... who have joined this
addicted smokers. The Clinton administration has fight. and who have vast resources to continue the
declared war on tobacco, the FDA plans to regulate effort even if it takes years."
cigarettes and limit marketing to young people, and
t least one Wall Street observer has painted
a 'doomsday' scenario 'if the litigation dam
breaks.' For the first time, 'we detect an
unmistakable willingness by the industry to
bargain.' he wrote.
Left, a proposal for the
Tobacco Claims Settlement
Peter Castano top right.
Woody Wilner, bottom right,
took on Brown & Williamson
the target of critics who want to reform the tort system
to limit the damages and fees that can be collected in
liability cases. In Congress, and during the recent
presidential campaign, the plaintiffs' bar became an
abstract demon of American politics, vilified as
responsible for the suppression of business
innovation, among other ills. The plaintiffs' bar also
has become an emblem of irrationalit as critics point
to cases like the initial 1994 jury award of 822 million
in punitive damages to an elderly woman who spilled
scalding Mc-Donald's coffee on her lap. Lawyers
suing the tobacco industry are motivated by one thing,
says Wall Street analyst Blacic: "It's the money. The
tobacco industry is the plumpest, juiciest, golden-egg
layer of all time."
For their part, the plaintiffs' lawyers don't advertise
themselves as selfless angels, but they argue that their
lawsuits act as a catalyst for corporate regulation,
particularly in an era of smaller government. The trial
lawyers see themselves as watchdogs for the quality
of middle-class life, guarantors of the individual's
right to seek redress for corporate malfeasance or
Lawyer Wendell Gauthier, above, was inspired by the neglect. The plaintiffs' lawyers, some driving BMWs
death of his friend Peter Castano, previous page. or Mercedes-Benzes, portray themselves as defenders
This sharp turn in the tobacco conflict is occurring of the little guy—in this case, nicotine-addicted
amid vigorous debate about how America should Davids against Goliath tobacco.
manage what has become, in effect, the "I know that the outside world thinks we're greedy
institutionalization of disaster. The evolution of mass- hogs. As I see it, this is our chance to do some good
injury law has produced a situation where today, as for society and give something back," says Wendell
the country mass produces products, it also mass H. Gauthier, a New Orleans anti-tobacco lawyer.
produces liability. From asbestos to the Dalkon Shield
to silicone-gel breast implants, American civil courts Whatever their motivations, there is no question that,
have faced successive waves of liability suits. through sheer relentless pursuit, the plaintiffs' lawyers
Tobacco is the culmination of the trend. The latest have created a new paradigm for the tobacco industry
tobacco suits claim to represent tens of millions of during the last two years. "The plaintiffs' bar is
American smokers and more than a dozen state peopled by lawyers who are permanently hungry,"
governments—potentially a greater share of American says Stephen Gillers, professor of legal ethics at New
sociely than any previous class of alleged victims. So York University. They're like red ants at a picnic.
large and threatening have these lawsuits become that There are an unlimited number of them, and if the
Congress may attempt to take the litigation away from food is good. theyll keep coming at you."
lawyers and the courts altogether and impose a
legislative solution, if only to ensure the survival of an It began with a plane ride.
industry that is so prosperously entrenched in the
American economy, culture and political system; Two little-known Mississippi lawyers were flying to
Philip Morris, for example, says it's America's largest California in late 1992 to conduct a deposition. One
corporate taxpayer. was Don Barrett, the slow-talking lawyer from
Lexington. The other was his friend Richard F.
Talk of tobacco's endgame is also taking place amid Scruggs, of Pascagoula, a plaintiffs' lawyer who had
intense debate about the role of trial lawyers and their hit a few jackpots in his time, primarily in asbestos
contingency fees. The lawyers behind the assault on cases. Dick Scruggs owned a yacht, a Lear jet, and has
Big Tobacco are the same "masters of disaster" who said he has earned more than $1 million a year after
earlier took down asbestos makers. These lawyers are taxes.
Barrett, on the other hand, had might evade the industry's most Barrett had tried again in 1990.
taken out a second mortgage on his effective defense. This time the judge let him blame
house and was finding it difficult In time, the idea Barrett and Horton's cancer on his smoking,
to pay expert witnesses in his Scruggs identified that day would not on excess pesticides. The jury
tobacco cases. Looking for help, he revolutionize civil tobacco ruled against the defendant,
had called up Scruggs, a classmate litigation in America. But at first, American Tobacco Co. For a
from their undergraduate days at they struggled to identify a formula minute Barrett thought he had done
the University of Mississippi. that would work. it. But when the jury inexplicably
Scruggs had agreed to pitch in, Scruggs had once sued military awarded zero dollars in damages to
financially and intellectually. contractors in a non-tobacco matter Horton's family, Barrett was
The two were heading to San under the federal False Claims Act, despondent. "His life was worth
Diego to depose David M. Burns, a which allows private parties to nothing."
pulmonary specialist who helped bring cases on behalf of the Barrett worked his tobacco cases
write key surgeon general's reports government, alleging fraud and from the ground up. While other
on smoking. The problem Barrett misrepresentation. Scruggs and lawyers depended on fancy focus
and Scruggs faced was that even Barrett talked about the patients in groups and mock trials to try
though an expert like Burns might VA hospitals who were sick or various legal theories and evidence
have a solid reputation and dying of smoking illness, and who presentations, Barrett would go to
expansive knowledge, such were running up a government tab. Billy Zeigler's barbershop on
testimony had never been enough These smokers were the victims of Spring Street and gently question
to beat the tobacco induslry at trial. false claims by tobacco companies customers about their attitudes
It was a paradox: Scientific and the government was incurring toward smoking. Over the years,
evidence was bountiful that the cost, they agreed. Perhaps they the more he had talked at the
smoking was harmful, victims could sue on behalf of the barbershop, the more he had
were everywhere, experts were government, saying it was the learned that ordinary people in a
lined upto testify—yet the victim, not the individual smoker. town like Lexington thought
plaintiffs could not win. They When they got off the plane, smokers were responsible for their
could not surmount the industry's Scruggs called his law partner and own choices. The fact that Barrett
persuasive and brilliantly simple asked him to research such a suit. kept trying cigarette cases anyway,
argument Smoking was voluntary, It was tantalizing, but they decided he laughs, "is probably more of an
a matter of personal choice, and that the approach probably would ode to my stupidity than anything
since smokers were aware of the not work because of technical else."
hazards, the industry should not be constraints in the false claims law. Realistically, Barrett could not
held liable. Jurors in tobacco trials Barrett knew from bitter afford too many more defeats. The
often agreed that the evidence experience that the old approach more Barrett thought about it, the
showed smoking was dangerous, didn't work. In 1988, he had more he believed that evading the
but they concluded at trial after represented the estate of Nathan personal-choice defense was key.
thrial that individual smokers were Horton, a 50-year-old carpenter After the plane ride with Scruggs,
responsible for their own actions. who for 30 years smoked Pall as he prepared for his next tobacco
On the plane, Barrett and Scruggs Malls and who died of lung cancer trial, he kept asking himself: How
talked for several hours about how before the trial began. Barrett can I get out of the smoker's
they might overcome the industry's mustered evidence that Horton's shoes?
personal-choice argument. They illness was caused by excess An answer emerged in the town of
went round and round and finally pesticides that had contaminated Clarksdale, Miss., where plaintiffs'
they arrived at an intriguing idea: tobacco in the cigarettes he attorney Michael T. Lewis was
What if they could find a way in a smoked. It almost worked. Under watching Jackie Thompson, the
lawsuit to get away from state law, he needed nine votes, mother of his secretary, die of
individual responsibility, to "step and the panel ended up hung, 8 to heart disease. A heavy smoker,
out of a smoker's shoes"? By 4, in Horton's favor. He couldn't Thompson was waiting for a heart
avoiding the individual smoker as get the ninth vote he needed. transplant. Lewis ran a small, two-
a plaintiff—his choices, his "Close but no cigar," Barrett says. person law firm with his wife,
responsibilities—the lawyers Pauline. They had no experience
with tobacco cases. Lewis wanted Lewis saw the tobacco companies succeed with its standard defense
to sue on Thompson's behalf, but as the enemy and didn't hide his that Smith freely chose to smoke
dropped the idea after researching motivation: "It was a way to bring and was aware of the risks.
the dismal history of such suits. them down, to make them pay, to Lewis drove over, watched the
Lewis felt frustrated and angry at punish them, to destroy them." court proceedings for the
the inability of the legal system to He mulled the plan for a few afternoon, then visited both
hold the to bacco industry weeks, then in June 1993 contacted lawyers at the Hampton Inn.
accountable. Michael Moore, a law school Lewis laid out his concept about a
One day in the spring of 1993, as classmate from Ole Miss who had Medicaid suit. Barrett and Scruggs
Lewis rode down the elevator of a become the state attorney general. described their earlier efforts to
Memphis hospital, where he had Moore liked the Medicaid idea, find a way to get out of the
just seen his secretary's mother for and referred Lewis to another Ole smoker's shoes, but this seemed
what would prove to be the last Miss law school classmate— like the best idea yet As Barrett
time, an idea struck him like a Scruggs, who had once worked puts it "The state of Mississippi
thunderbolt. The woman had with Moore's office to recover the has never smoked a cigarette. It
exhausted her personal assets, and costs of asbestos abatement in state was like 'Eureka!'
her care was now being covered by buildings. A short time later, Barrett and
state Medicaid funds. (With the By this time Scruggs was in Scruggs lost the Smith case after
heart transplant, the cost of her Greenville, Miss., where he was the judge wouldn't let them use
illness eventually exceeded $1 helping with Barrett's latest their evidence about Smith's
million, Lewis says.) "The idea tobacco trial. Their client was mental capacity. But now they
just came to me unbidden that we Anderson Smith, who had been were more energized than ever.
ought to get a small measure of institutionalized in a psychiatric With Moore's encouragement,
justice by suing on behalf of the hospital, diagnosed as a paranoid Barrett, Scruggs and Lewis went to
state of Mississippi to recover not schizophrenic. While hospitalized, work on the Medicaid plan. There
only Jackie's Medicaid money but Smith began to smoke, and given were 500,000 people in Mississippi
all the other money the state of that he could not make decisions on Medicaid, Scruggs said; about
Mississippi had spent" on similar by himseif—doctors said he had 200,000 had smoking illnesses. "If
patients, Lewis recalls. the mental age of 7—Barrett felt we do it for one, we might as well
the industry could not possibly do it for all."
authier decided to fashion a suit around
addiction. He calculated that there were
tens of millions of addicted smokers in the
U.S. and that such a class action case
could be worth billions of dollars.
In New Orleans at around
the same time, Wendell Gauthier produced his epiphany. On compensate the family for his lost
also discovered what would prove February 25, FDA Commissioner earnings and lost life. But an
to be a second, complementary David A. Kessler announced that "addiction-only" claim, for any
track for evading the tobacco the FDA was investigating smoker, might be worth only in the
industry's traditional defenses. As allegations that the tobacco thousands of dollars—the cost of a
with Michael Lewis, his inspiration industry manipulated the level of nicotine patch or addiction
arose from the smoking-related nicotine—the addictive ingredient treatment, perhaps. What lawyer,
death of a friend. Peter J. Castano, in cigarettes—to keep people working on a contingency fee,
47, a local criminal defense smoking. Three days later, ABC's would pursue that?
attorney and Gauthier's best friend, "Day One" news magazine made Gauthier decided that the way
had died of lung cancer. After his similar charges, and further around this problem was to bundle
funeral in March 1993, Castano's asserted that tobacco firms spiked together a huge number of
widow had asked Gauthier whether cigarettes with nicotine to sustain addiction-only suits into a national
he could sue the industry for the smokers' addictions. (ABC later class action, a mass tort in which
family. Gauthier's first response apologized for certain claims made large numbers of victims with
was no. The odds of winning were on the show, but defended the similar injuries stemming from
too low. allegation that nicotine was similar causes are addressed at one
controlled to hook smokers.)
Gauthier was one of the nation's time. Gauthier calculated that there
leading mass-injury lawyers. He Gauthier decided that the industry's were tens of millions of addicted
had pioneered the use of mock manipulation of nicotine was the smokers in the United States—
trials to prepare for civil suits. He best way to rebut its claim that such a class action case could be
had built a courtroom in his office, smokers knew their risks: worth billions of dollars.
complete with an American flag Addiction was a risk that the On March 18, 1994, Gauthier took
and a judge's bench, where mock industry had not warned about. If some friends to dinner at Emeril's,
trials could be held for three juries the industry secretly maintained a Creole restaurant in the
at a time; their deliberations could nicotine at addictive levels, warehouse district of New Orleans.
be secretly observed through a smoking was no longer a matter of His companions were leading
camera hidden behind the eye of a personal choice; the industry was p1aintiffs lawyers in town to work
man in a painting on the wall. seeing to it that smokers could not on breast implant litigation. As
Gauthier used the facility to stop. they talked, the lawyers remarked
forecast how he would do at trial— Gauthier decided to fashion a about the smoke wafting through
and he usually did pretty well. His lawsuit around addiction. This the restaurant, and how much it
$10.1 million trial verdict would not be a personal-injury or bothered them. Several of the
stemming from a 1982 Pan Am jet wrongful-death case—it would not lawyers had a story to tell about
crash outside New Orleans was for seek damages for cancer, heart the impact of smoking on their
years the largest single verdict in disease or other injuries stemming personal lives: Ralph I. Knowles
an air crash case. He also led the from smoking. It would instead Jr., of Atlanta, had a father
team that negotiated the $220 seek damages for mental distress, suffering from emphysema; Daniel
million settlement in the 1986 fire the cost of nicotine patches and of E. Becnel Jr., of New Orleans, had
that killed 96 people at San Juan's attending smoking cessation lost his father to cancer; Leslie J.
Dupont Plaza Hotel clinics, and other problems arising Bryan, of Atlanta, said both her
In the months after Castano's from addiction alone. parents had suffered smoking-
death, Gauthier kept thinking about Gauthier realized such a novel
related heart attacks.
a way to take on tobacco. He kept theory would not be worth very Gauthier seemed the most
on his desk a judge's opinion much even if he won at trial. From distraught. He talked about
blasting the tobacco industry for a pure damages perspective, the Castano, as well as his own three
concealing facts about the dangers wrongful death of a high-powered daughters, now in their twenties,
of smoking. But it wasn't until lawyer like Castano might be who all had smoked as teenagers.
early 1994 that two separate events worth tens of millions of dollars, to One of them still smoked,
sometimes in front of Gauthier's This internal feud centered on one of Trial Lawyers of America
young grandson, which drove question: Was it better to bundle (ATLA), a powerful lobbying
Gauthier crazy. huge numbers of mass-injury cases group in Washington. Gauthier
together, as Gauthier planned in enlisted other big hitters, like
Gauthier began to describe his idea
tobacco, or to try only the strongest Baltimore asbestos lawyer Peter G.
about addiction and a class action
cases individually? Angelos, owner of the Orioles; and
lawsuit. To make it work, he
John O'Quinn, of Houston, whose
needed a large group of plaintiffs' On one side were lawyers like
net worth was placed by Fortune
lawyers to spread the risk and the Stanley M. Chesley of Cincinnati,
magazine at half a billion dollars.
expense—lawyers like those class action specialists who argued
He also wanted Motley, a rugged
around the table. that their strategy delivered justice
attack dog of a lawyer who calls
to the greatest number of potential
Because he didn't want to engender himself a "crazy tank commander"
victims. They held that a class
any false optimism, he cited the and came to see that Gauthier had
action was more efficient than old-
case of attorney Marc Edeli, whose "a wonderful political ability to
fashioned trials, which were
firm had spent millions meld together disparate
expensive and could drag on for
unsuccessfully pursuing a tobacco philosophies. He is truly our
years during appeals. Class actions
case. "My thought was, 'Why Eisenhower."
also gave defendants incentive to
would anybody want to get in it?'"
settle since, in a single act, all suits Soon Gauthier had persuaded 60
against a firm or industry could be law firms to join the Castano class
But another Louisiana lawyer at resolved. Some deals even at action. Each pledged $100,000 to
the table, Calvin C. Fayard Jr., tempted to close off future cases. support the effort, and many firms
looked right at Gauthier and sent lawyers to staff the Cantano
But many traditional trial lawyers
interjected: "Don't tell me how we war room, a headquarters office
felt the class action lawyers were
can lose. Tell me how we can established on the 30th floor of the
too quick to settle, and did so for
win." Energy Centre at 1100 Poydras St.
pennies on the dollar, at the
The other lawyers agreed. The in downtown New Orleans.
expense of their clients. The trial
class action idea was appealing. As lawyers believed they could win Gauthier also wanted to add D.C.
Gauthier remembers, "They substantial verdicts, sometimes in attorney John P. Coale to the team.
wanted in." the millions of dollars. for clients Coale's detractors branded him a
who might receive only a fraction media hound and accident chaser.
Gauthier set out to build an of that amount in a class action After the Union Carbide chemical
unprecedented force of private settlement. One such lawyer, disaster at Bhopal in 1984, Coale
plaintiffs' lawyers. The size and Ronald L. Motley of Charleston, jetted off to India and signed up
staying power of the group would SC., barely hid his scorn for the 60,000 clients, winning him the
be critical because the tobacco class action settlements reached by derisive nickname "Bhopal Coale."
industry was united and typically Chesley and lawyers like him. The But Gauthier liked Coale's
spent huge sums to defeat its "Chesley-ites," as Motley put it, philosophy that a mass-injury
opponents. Gauthier would also were the "lawyer-diplomats who lawsuit had to be fought like "a
have to persuade the nation's top sue for peace before there's a war." huge war" on many fronts, with
plaintiffs' attorneys to set aside plaintiffs' lawyers wearing
For his anti-tobacco army,
their historical differences over "different hats"—legal, political,
Gauthier tried to recruit the best
how mass-injury cases should be even PR In the tobacco suit, Coale
and brightest from each faction.
fought There were two schools of said, the plaintiffs would have to
Some of his earliest calls went out
thought, and the two factions had win the PR battle or Philip Morris
to Chesley and other leading class
bickered so bitterly over the years would dominate. Coale wanted to
action litigators, such as Elizabeth
that it could be said at times that organize a media blitz, using
J. Cabraser and Dianne M. Nast.
the enemy of the plaintiffs' bar was internal tobacco company
From the traditional trial lawyer
not corporate America but the documents and whistle-blower
side, Gauthier recruited Russ M.
plaintiffs' bar itself. interviews to influence future
Herman of New Orleans, who had
jurors and create an environment in
been president of the Association
which tobacco firms would feel
pressure from stockholders and When Herman was president of these people. That's the bones I'm
politicians to settle. Coale told ATLA in the late 1980s, he and picking."
Gauthier "You're not just fighting a Coale had gotten into a bitter When Gauthier finally told
corporation; this time you're dispute over the propriety of Herman that Coale would be
fighting the biggest media machine soliciting clients after big disasters. joining them, Herman recalls
in the world. The only reason that At one point, Coale snidely "there were a lot of people scared"
a lot of people smoke today is suggested in a newspaper interview about what might transpire at that
because of the media blitz." that Herman and other ATLA first meeting. But both men made
leaders were ashamed of being
Coale understood how the press it work. Within months, Coale was
plaintiffs' lawyers, and privately
worked. He also had good contacts disseminating industry documents
wished they had gone to Harvard
in the FDA and would be able to to reporters and sympathetic
Law School and into the legal
monitor the agency's probe into the members of Congress. As for the
industry's use of nicotine, which feud with Herman, that soon
could produce evidence for their Outraged, Herman snapped back in disappeared. Months later, when
case. Coale knew his way around another press interview, calling Coale and Herman bumped into
Capitol Hill, too, and could follow Coale a "cesspool." each other on a New Orleans street
the efforts of the new Republican A few weeks before the Emeril's
corner near the federal court, the
majority's push for tort reforms dinner, CBS's "60 Minutes" ran a
two men, both quite large and
that might threaten their ability to profile of Coale in which the
wearing conservative business
win punitive damages. lawyer seemed disarming. When
suits, threw their arms around each
other with great gusto and began to
Gauthier's biggest concern was correspondent Ed Bradley
dance in a circle, with Herman
putting Coale in the same room as pronounced Coale a "vulture" who
calling out. "Cess! Cess!" It was an
trial lawyer Russ Herman. Herman would circle in and "pick the
echo of his notorious "cesspool"
hated the fact that Coale was proud bones" when people suffered
insult—only this time, it was a
of being an ambulance chaser, misfortune, Coale replied genially,
term of endearment.
thought it reinforced the worst "No ... I pick the bones of the
stereotypes of plaintiffs' lawyers. corporation bastards who did it to On March 30, 1994, Gauthier’s
team filed the Castano class action
in federal court on behalf of "all
nicotine dependent persons" in the
United States. (Later a federal
ou're not just fighting appeals panel threw out the
a 'corporation' Coale national class action; the Castano
group reified in more than a dozen
said, 'you're fighting state courts.) As Gauthier had
the biggest media envisioned, the suit was limited to
machine in the world.
the harm caused by addiction.
Citing the potential "class" of tens
The only reason that a of millions of smokers, the suit
lot of people smoke asserted that "a class action is
superior to other available
today is because of methods." The document was
the media blitz.' signed by Gauthier, followed by a
long list of lawyers from the many
firms he had enlisted.
In Mississippi, state
Attorney General Moore had Louisiana and Massachusetts; both litigated big cases against
goften a clear signal from his state states later filed suits. Florida and automakers, drug companies,
legislature that it would not pay for other states sued as well. asbestos firms. They were
his novel Medicaid suit, which The Medicaid strategy generated impressed by the group Gauthier
might cost as much as $5 million. headlines and earned strong had assembled; they admired his
But Dick Scruggs and Ron Motley support from the anti-tobacco vision. But they were concerned
were willing to front the money movement. Still, Moore knew the about some of the "classers," as
from their private practices. risks were high. "There was no one one called them, in the group.
Branch says he wanted to make
The April 14 appearance by seven who told me this was a good idea
sure that no one tried to "steal" the
top tobacco executives before a from a practical or political point
Castano case and "turn it into a
congressional subcommittee of view," he recalls. The suing
runaway class action, where the
catalyzed Moore. He thought the attorneys general tended to be
client be damned and attorneys be
testimony—particularly denials Democrats, the party with the
under oath that nicotine was strongest ties to the plaintiffs' bar.
addictive—was "the biggest lie But the governors of some states Gallagher worried about how it
ever committed before Congress. I were Republicans, the party that would look if they reached a
called right then and told Dick and had developed strong ties to the settlement with the tobacco
Motley and the crew to get the case tobacco industry and had industry in which each addicted
ready—we're going to file." supported tort reform measures to smoker got only a few dollars. He
curb lawsuits by plaintiffs' could see the headlines: "Lawyers
They did, on May 23, in the
attorneys. Moore, for instance, get a bejillion dollar fee—and the
Chancery Court of Jackson
soon found himself at loggerheads individual plaintiffs get very little."
with Mississippi's Republican Such results, he said, fueled the
Moore also wanted to enlist other governor, Kirk Fordice, who went fires of tort reform in legislatures
states to file similar Medicaid so far as to sue Moore to block the and Congress.
actions. He, Scruggs, Barrett and Medicaid suit—a matter that is still
But Hare and Baldwin were
the other private lawyers wanted to pending in the state Supreme Court
coming around to the idea that a
do it quietly; they feared the
class action might be a useful tool
industry might try to get state When lawyers from the 60 in tobacco cases, where traditional
legislatures to block such suits.
firms enlisted by Gautier held their trial methods had not succeeded.
Scruggs knew their task would be
first big strategy session at the
complicated by political issues: As Hare put it, "You're never
Windsor Court Hotel in New
Unlike recruiting from among the going to win these damn cases," so
Orleans, four of them broke away
private bar, they were now trying maybe the class action alternative
one evening and headed for
to persuade elected officials, was not so bad after all.
Antoine's restaurant in the French
sometimes in states where tobacco Hare also was attracted by the
was king. possibility that a class action
It was a kind of encounter group, a
Moore lobbied his counterparts at settlement could be negotiated that
chance to talk philosophy, examine
national meetings, often asking would include remedial action like
what they were doing.
Scruggs to accompany him. a nationwide medical monitoring
Scruggs remembers a meeting in The four were Turner W. Branch program to track smoking illness, a
San Antonio that summer, where of Albuquerque, Michael "public interest" result that could
they got an enthusiastic response Gallagher of Houston, Francis H. not be obtained in a traditional
from West Virginia Attorney "Brother" Hare Jr. of Birmingham, trial.
General Darrell McGraw Jr., who and Scott Baldwin of Marshall,
Still, Hare said he was concerned
filed a Medicaid case on Tex. All four represented the
about what might happen if the
September 19. Scruggs also spoke traditional trial bar and were
tobacco industry actually offered a
with the attorneys general of skeptical of class actions. They
deal. Limiting their suit to
were veteran lawyers who had
addiction was a brilliant way to get was in continual contact with jurors filed into their box and
into court and overcome the Liggett lawyers in New York. listened as a clerk read aloud their
traditional industry defenses. But The Castano vote took place in a verdict in the matter of Carter v.
in any settlement, the tobacco large conference room on the 23rd Brown & Williamson Tobacco
industry would likely demand an floor of the Windsor Court Corp.: liability for the lung cancer
end to all litigation—suits over Security guards stood outside as of Grady Carter is found against
cancer, heart disease, emphysema, the lawyers listened to two of the the tobacco defendant Total
secondhand smoke, the Medicaid Castano negotiators, Barrett and damages: $750,000.
costs, everything. On the other Richard M. Heimann, as they Two obscure North Florida trial
hand, if the Gauthier team could described the proposal. lawyers, Norwood "Woody"
deliver that kind of all-inclusive
During the discussions that Wilner and his partner, Gregory H.
deal, an end to the legal
followed—in a signal of the Maxwell, celebrated with their
uncertainty that beset the industry,
tensions rising within the plaintiffs' client; a 66-year-old former air
Gauthier's group would have
bar as their campaign against traffic controller who had smoked
enormous leverage; it was the kind
tobacco yielded early successes— Lucky Strikes and other cigarettes
of deal Wall Street would love.
one lawyer raised persistent heavily for more than 40 years.
The trouble was, if they sought to concerns about whether they were They were unlikely victors—the
settle claims that went beyond getting the best deal possible. two lawyers had spent more than a
addiction, Hare said, other decade at the defense table
plaintiffs' lawyers with suits Russ Herman abruptly stood up, representing the asbestos industry,
against the industry would bluntly interrupted, and took the winning case after case for their
complain that they were being floor. As if he were making some clients by arguing that plaintiffs'
undercut. Under the rules of class great closing argument Herman cancers or empliysemas were not
actions, if they made a deal that declared passionately that they from asbestos but from smoking.
went beyond addiction and a judge should recognize the significance Finally Wither and Maxwell had
approved it, other suits by smokers of this potential deal—the first asked each other, Why not sue the
could be foreclosed. settlement ever, curbing the sale of tobacco industry? Without
cigarettes to minors. The lawyers substantial expenditures or new
In the end, Hare concluded that should say yes—now. legal theories, they had done what
what mattered most was whether
With the Liggett lawyers listening had seemed nearly impossible for
the Castano lawyers could deliver
in on the phone from New York, decades: They had stayed in a
the best deal for their client—in
Herman dramatically called for a smoker's shoes, sued a tobacco
this case, the class of addicted
vote and a roar of "ayes" went up. company, and won.
It took a few extra days for the Coming on the heels of the Liggett
The combined, growing attorneys general to complete their settlement; their verdict sent
threat of the Castano and Medicaid portion of the deal. tobacco shares tumbling on Wall
lawsuits gave rise to the landmark Street—Philip Morris, which had
"The tobacco industry has lived for nothing directly to do with the
Liggett deal, the crack in tobacco's too long with the possibility of
wall. Jacksonville case, saw its stock fall
financial catastrophe from product about 14 percent in one day.
On March 12, 1996, Wendell liability lawsuits that could destroy
Gauthier summoned the lawyers the industry," LeBow said later in The Jacksonville verdict seemed to
from his consortium of 60 firms to a press release. "liggett's assets will be evidence of how much was
New Orleans for a secret vote on no longer be held hostage by the changing in the battle between
the proposed settlement. On the tobacco litigation, and we will be plaintiffs' lawyers and the tobacco
same day, Scruggs and Mississippi free to run our business without companies. It was hard to know
Attorney General Moore were in this distraction." precisely what had changed, what
Washington, working the was cause and what was effect. But
clearly public attitudes were
telephones to round up the votes of Five months later, on shifting and clearly they were
the state attorneys general who had August 9, in a Duval County
filed Medicaid suits. Each group being influenced by a new
courtroom in Jacksonville, Fla., six
fountainhead of internal tobacco smoking in American society are Behind the scenes, Scruggs floated
industry documents and whistle- now shifting," wrote Wall Street a proposal known as the Tobacco
blower allegations that the industry tobacco analyst Jay Nelson, of Claims Settlement Act of 1996.
had been well aware of the hazards Brown Brothers Harriman & Co., Under terms of the act, Scruggs
of cigarettes since the 1950s and on August 26, after the says, the tobacco industry would
had concealed what it knew. In the Jacksonville verdict. The varied pay some $160 billion over 20
Carter case, the jurors told and intensified legal and political years to partially reimburse state
reporters afterward that one of the pressure on the industry gave rise Medicaid costs and fund
most important factors in their to serious speculation about a independent research and public
decision had been damaging tobacco end- game, what Nelson education programs on the dangers
internal company documents called "a Grand Compromise." of smoking. The industry would
presented in evidence at trial. have to divulge its own tobacco
A week later, Wall Street analyst
research, and FDA proposals to
To at least some extent, the Gary Black suggested that if the
curb sales to minors would become
Jacksonville verdict could be number of states participating in
traced to the ongoing work of the Medicaid actions grew— by
lawyers in the Medicaid and this fall, the plaintiffs numbered In return, Congress would pass a
Castano groups, who had supplied more than a dozen states, induding law ensuring that the industry
Wilner and Maxwell with many of Maryland, and cities like New would not be subjected to FDA
the tobacco industry documents York and Los Angeles—then the regulation, or to suits from
they used at trial. Since 1994, Dick result could be an "unprecedented smokers or states, for 20 years. In
Scruggs and others had been threat ... These alone could pending cases, damages that could
facilitating the emergence of bankrupt the industry." Industry be recovered would be capped.
documents and of such prominent opposition to any settlement Scruggs says he had support from
industry whistle-blowers as Jeffrey continued to soften. Martin Senate Majority Leader Trent Lott
Wigand, a former executive of Broughton, chief executive of (R-Miss.)— who happens to be his
Brown & Williamson, and Merrill Brown & Williamson's parent brother-in-law. Lott told Scruggs
WIlliams, a paralegal at the company, said that a legislated that while he would not become
company's defense firm. Wilner settlement was a "common sense" directly involved in the talks
and Maxwell also consulted with way to solve the industry's between the parties, if a
Motley and Barrett and used problem. satisfactory deal was reached, Lott
documents and depositions from
For the Castano and Medicaid would be willing to help enact the
Barrett's earlier tobacco cases.
group lawyers, who claimed to legislation necessary to put it in
The Jacksonville verdict was a represent tens of millions of place.
shock, but it might prove to be smokers and more than a dozen Tobacco officials publicly denied
only the beginning: state governments, any such authorizing any congressional
compromise would require them to
Confident that they had found a settlement talks. Philip Morris, in a
weigh the interests of their clients
way to win old-fashioned tobacco statement, said the company
against broader public and policy
liability cases, Wilner and intended to "vigorously defend" all
questions. This was not something
Maxwell have nearly 200 such of its lawsuits and played down
plaintiffs' lawyers normally did.
cases pending, to be tried one after any chances of a deal.
For the lawyers in both groups, the
another, with the next one set to The talks came as a complete
shift represented both an
begin in April 1997. surprise to many Castano lawyers,
opportunity and a continuing
source of internal tension. some of whom first read about the
"The tectonic plates on proposal in the Wall Street Journal.
which rests the issue of the Some in the plaintiffs' bar were
continuing role of cigarette already thinking like policymakers:
ellon thought Clinton would have to
sign it. 'This will be one of the great
pieces of legislation in the century,
if you believe as I do that tobacco is
the scourge of our society.'
Gauthier contacted Scruggs, who he suggested that the time might be "If you are president of the United
assured him that Castano lawyers right to launch yet a new wave of States, and Congress gives you this
would participate in any future tobacco litigation, ratcheting up the act," Mellon told the group, as he
negotiations. Some Castano pressure even more. listed the potential benefits
lawyers were supportive; others Mellon told the group that the
contained in the proposed
were concerned, even upset. To tobacco industry was embattled.
legislation, how could Clinton say
them, the idea of agreeing to any Public sentiment was coming their
no? The president would have to
settlement in which Congress way. There might be grand jury
look at the bigger picture. "It is just
would ban future lawsuits was indictments against tobacco
clear to me that that piece of
abhorrent — it contradicted executives or their companies and,
legislation has to be signed,"
everything they had fought for in in 1997, a movie version of John
Mellon said, as he recalls it.
the long-standing battles in Grisham's anti-tobacco novel, The One lawyer present was Hugh
Congress over tort reform. Runaway Jury, was scheduled for Rodham, President Clinton's
Castano leaders talked about the release. Mellon suggested that the brother-in-law and a member of
settlement proposal during a Castano lawyers flood the courts the Castano team. Mellon turned to
conference call in September. One with thousands of new cases by Rodham and asked what he
lawyer on the phone, Maury individual smokers. The litigation thought. Alter all, the president had
Herman, Russ's brother and law would swamp the tobacco industry. opposed tort reforms that he saw as
partner, urged his colleagues to At day's end, Mellon and some
unfair to consumers; he had vetoed
keep their objections to such an other Castano lawyers adjourned to
a tort reform bill.
overarching deal private. They had the hotel lounge on the second Rodham's response, recalls
remained united thus far, and if floor. Sipping iced tea, white wine Mellon, was that the president
they started going after each other and O'Doul's nonalcoholic beer, would never sign a bill that
now, their critics would portray the the group began talking about restricted the right of citizens to
lawyers as motivated by greed. "It Scruggs's proposed congressional sue.
would be sharks circling sharks deal, the Grand Compromise. As
eating sharks," Maury Herman told But Mellon thought Clinton would
they went around the table, almost have to sign it. "This will be one of
his colleagues. everyone agreed that they were the great pieces of legislation in
Several weeks later, the Castano against any settlement that the century, if you believe as I do
lawyers journeyed back to New imposed a ban on future lawsuits. that tobacco is the scourge of our
Orleans for another strategy But Mellon, of all people, society," Mellon recalls saying.
meeting at the Windsor Court. One dissented. He had a background in
hot topic was the Jacksonville public policy as a former federal Listening to all this was Brother
verdict, which had electrified the prosecutor. He wondered if the Hare, the old-line trial lawyer from
group. During one session, others might be underestimating Birmingham. He felt
Thomas E. Mellon Jr., an intense, the political attractiveness of such uncomfortable. He was certain he
curly-haired lawyer from an endgame. would not support a deal in which
Doylestown, Pa., gave an Congress—rather than a court—
enthusiastic presentation in which restricted the right of individuals to
sue. Yet he agreed with Mellon: for tens of millions of people— that are political, philosophical—
Politically, Clinton might have to smokers he had never met and that sort of thing," Hare says,
sign such a bill. never would meet. "rather than just the case of a
lawyer with an individual client.
Hare found himself thinking less in Yet, if Hare thought a
And that troubles me.”
his classic role as a lawyer and congressional solution was the best
more like some social architect, as thing for the country, even if it
he put it later. When he deprived the plaintiffs' bar of the Benjamin Weiser, a reporter on
represented a single client, Hare right to sue, what should be his The Post's investigative staff writes
focused narrowly on his client's position? frequently about legal and
interests and "the public interest be Like so many of his colleagues financial issues. Post staff writer
damned." When he joined the these days, he felt torn even trying John Schwartz contributed to this
Castano group, he had accepted an to answer the question. "I'm now article.
enlarged view of his "client"; now aware that I'm making decisions
he was trying to fashion a solution