Liggett To Settle Florida Smoker Cases For $110 Million

, Daily Business Review

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The Miami-based parent of cigarette maker Liggett Group said Wednesday it has reached a global settlement agreeing to pay more than 4,900 sick Florida smokers a total of $110 million to resolve individual lawsuits filed after a statewide class action was disbanded.

Liggett's parent, Vector Group Ltd., agreed to pay $61 million in a lump sum and $49 million in installments over 15 years to resolve most of the cases. The proposed settlement would be final in about three months contingent on plaintiffs attorneys delivering the required settlement documents.

Liggett, which over time produced the Chesterfield, L&M, Lark and Eve brands, is owned by Vector, which expects to take an after-tax charge of $53 million in the third quarter to cover the cost of resolving litigation.

The individual cases flow from a class action filed in Miami-Dade Circuit Court in 1994 bearing the name of the late Miami Beach pediatrician Howard Engle.

Vector chairman Bennett S. LeBow called the agreement a "landmark settlement, which prudently resolves substantially all of the Engle progeny cases pending against us. The Engle progeny cases have been the biggest litigation overhang on our company in the last decade, and this settlement substantially reduces the ongoing litigation risks as well as related legal fees and expenses."

LeBow broke with four other industry leaders in 1996, becoming the first tobacco executive to admit the deadly effects of smoking. His admissions paved the way for costly settlements with state attorneys general, who sued for the recovery of health care funds spent treating smoking-related disease.

The recent refusal by the U.S. Supreme Court to consider industry arguments that the company was denied due process in smoker trials led some plaintiffs attorneys to speculate the remaining cases were ripe for settlement.

Neal Roth of Grossman Roth in Coral Gables served as plaintiffs coordinating counsel in negotiations with Vector that spanned more than three years, he said. The recent U.S. Supreme Court decision had no effect on negotiations, he said.

"The numbers were reached a long time ago," Roth said, but a multitude of other issues needed to be worked out.

'Terrific Accomplishment'

Roth credits his partner, Andrew Yaffa, for getting the talks started.

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