Liggett Announces $110 Million Settlement Of Florida Tobacco Litigation

MIAMI — (Mealey’s) The nation’s third largest tobacco manufacturer announced Oct. 23 that it will pay $110 million to settle thousands of Engle progeny tobacco litigation cases asserting death and injury in Florida state and federal courts. 

Vector Group Ltd. and subsidiary Liggett Group LLC said the settlement does not require court approval and will resolve more than 4,900 of approximately 5,300 individual Engle plaintiffs’ claims against Vector and Liggett. 

The company said it expects to take an after-tax charge of $53 million in the third quarter of 2013 and to pay a total of $110 million with approximately $61 million in a lump sum, and approximately $49 million over 15 years.  The settlement is expected to be finalized within 90 days, the companies said. 

Landmark Settlement 

“We are pleased to reach this landmark settlement, which prudently resolves substantially all of the Engle progeny cases pending against us,” Bennett S. LeBow, chairman of Vector Group's board of directors, said in a press release.  “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, of these cases.” 

Engle progeny” refers to cases stemming from Engle v. Liggett Group, Inc. (945 So. 2d 1246 [Fla. 2006]) [enhanced opinion available to subscribers], a class action lawsuit originally filed against cigarette makers in 1994.  The class was decertified after a $145 billion punitive damages verdict, but the Florida Supreme Court ruled that individual cases could proceed using liability findings from the class trial.

 The companies have argued that the preclusive aspect of the decision relieves plaintiffs of the requirement to prove all their claims and thus deprives the companies of due process.  The U.S. Supreme Court has declined to accept any of several appeals by Liggett and other tobacco companies of adverse verdicts in the Engle progeny cases. 

Federal Engle progeny cases are consolidated in U.S. District Court for the Middle District of Florida (In re:  Engle Cases, No. 3:09-cv-10000-J-32HTS, M.D. Fla., Jacksonville, Div.).  State cases are being tried in courts around the state. 

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