In a special session held at the request of cigarette makers, North Carolina legislators yesterday passed a bill that will make it easier for the companies to appeal major lawsuits. The bill may partially shield cigarette manufacturers from the effects of a Florida class-action lawsuit that threatens to charge the industry with punitive damages of $100 billion or more. The jury in the case-which claims to represent over 50,000 Florida smokers-began its deliberations yesterday.
When a company receives a judgment against it, the firm must file a bond to appeal the case; previously, that bond had to be equal to all damages. Bill and tobacco supporters argued that in a judgment as massive as the Florida case, just posting that bond would push some companies into bankruptcy. The bill limits the bond for punitive damages to $25 million and was overwhelmingly passed in both the House and Senate of the General Assembly.
"I supported this bill because I was concerned by the over 10,000 people that are employed by tobacco companies in this state, the revenues generated by those workers and the families they support with this industry," said Rep. Jennifer Weiss, D-Durham.
Rep. Billy Creech, R-Franklin, said the matter was one of principle. "I just don't agree with the whole process where people don't take responsibility for their own actions and sue anybody, anywhere at any time," Creech said. "The trial lawyers have come in and practically destroyed a legitimate industry."
"As Americans, we can make choices about our personal life," Creech said. "I don't think any tobacco company has held any gun to anybody's head and said, 'Smoke my brand.'"
Bob Hensley, D-Wake, the only representative to vote against the bill, denounced it as unconstitutional. Hensley charged that the bill's decree that North Carolina courts halt enforcement of orders from U.S. or foreign courts until all appeals are concluded violates the U.S. Constitution's supremacy clause.
"[The bill] says that our courts can abrogate an order, judgment or degree of the federal courts," said Hensley. "I think the Supreme Court will have something to say about that."
Charles Cromer, a representative from the N.C. Academy of Trial Lawyers, also questioned the bill's constitutionality in his speech to the General Assembly Tuesday, though the state Attorney General's Office issued a statement assuring that the law is constitutionally sound in its opinion.
Senator Frank Ballance said he voted for the bill even though he believes the Florida suit will not succeed.
"I don't think the Florida judge or the Florida judicial system will allow a judgment to come forth that will bankrupt our tobacco manufacturers," Ballance said. He also worried that the legislation would be seen as protecting large corporations saddled with huge judgments but not smaller companies charged with smaller, yet still substantial, damages.
Opposition to the bill was so slight that the Assembly finished debate and voting in less than four hours.
Indeed, the main source of debate Tuesday was not the proposed bill itself but an amendment proposed by Rep. Leo Daughtry, R-Johnston, a GOP candidate for governor. The amendment would have allowed the legislature to revisit the appeals limit after cigarette makers reveal how much American tobacco they plan to buy next year. It was withdrawn after several lawmakers voiced opposition.
Get The Chronicle straight to your inbox
Signup for our weekly newsletter. Cancel at any time.