Castano
v American Tobacco Co. et al

United States District Court, Eastern District of Louisiana
The Honorable Okla Jones presiding

Filed 1994

Photo of Wendell Gauthier

Wendell Gauthier, leader of the Castano group

This was the first class-action lawsuit against the cigarette industry. A team of 60 attorneys filed a lawsuit against the cigarette industry claiming the companies hid their knowledge of the addicting qualities of tobacco from smokers.

Timeline

  • 1994 – March 29: Case filed
  • 1995 – February 17: Trial
  • 1996 – March 12: Settled with Liggett & Myer
  • 1996 – May 23: US Court of Appeals Fifth Circuit decertifies class
  • 1997 – February 21: Judge Berrigan of US District Court Eastern District LA denies defendant motion for summary judgment
  • 1998 – January: Parties agree to dismiss the action without prejudice and toll the statute of limitations.

Narrative

Peter Castano died of lung cancer at the age of 47 in 1993. He began smoking at age 16 and tried unsuccessfully to quit for the next thirty years. After his death, his wife approached a prominent New Orleans attorney named Wendell Gauthier to discuss the possibility of suing the tobacco companies for wrongful death. Mr. Gauthier researched the issue and decided a class-action lawsuit would be the most promising way to attack the tobacco industry.

“This class action suit was filed by representative plaintiffs Dianne A. Castano, for of her deceased husband Peter Castano, Ernest R. Perry, Sr., T. George Solomon, Jr., Gloria Scott, and Deania Jackson, through a consortium of approximately 60 plaintiffs’ law firms against American Tobacco Co., American Brands, R.J. Reynolds, Brown & Williamson, British American Tobacco, Philip Morris, Liggett & Myers, Lorillard, Lowes Corp., United States Tobacco, and the Tobacco Institute on March 29, 1993. Each law firm paid a membership fee of about $100,000 to fund the litigation.”

“The class was defined as all nicotine-dependent persons in the United States, their estates, and relatives since 1943. The plaintiffs alleged that the defendants fraudulently failed to inform consumers that nicotine was addictive, and manipulated the level of nicotine in their cigarettes to sustain that addiction. The plaintiffs claimed fraud and deceit, negligent misrepresentation, intentional infliction of emotional distress, negligence and negligent infliction of emotional distress, violation of state consumer protection statutes, breach of express warranty, breach of implied warranty, strict product liability and redhibition pursuant to the Louisiana Civil Code.”

“The plaintiffs sought compensatory and punitive damages, attorneys’ fees, and equitable relief requiring the defendants to fund notification of all class members that nicotine is addictive, declaring that the defendants manipulated the nicotine levels in their cigarettes, ordering the defendants to disgorge any profits from the sale of cigarettes, ordering restitution, and implementing a medical monitoring fund.”

“The case was heard in the United States District Court, Eastern District of Louisiana before the Honorable Okla Jones. The judge certified the national class action as to core liability and punitive damages. He denied certification as to the plaintiffs’ claims for equitable relief including medical monitoring, finding compensatory and punitive damages to be the plaintiffs’ primary interest. The judge held that the prerequisites for certification were established: joinder of the tens of millions of potential plaintiffs would be impossible, common issues of law and fact existed, named plaintiffs hold the same or similar legal theories as the class, and the named plaintiffs and attorneys had taken sufficiently active roles in the litigation to show they would protect the interests of the class. The manageability difficulties were outweighed by judicial economy of not trying the thousands of cases that may have spurred from decertification. Common questions predominated as to the core issues of liability (fraud, negligence, breach of warranty, strict liability, consumer protection statute violations), and liability and assessment of punitive damages.”

“Punitive damages could be awarded based on an instruction that some plaintiffs would fail to prove damages and therefore not be entitle, or by affixing a ratio of compensatory to punitive damages. Individual issues predominated regarding injury-in-fact, proximate cause, reliance, affirmative defenses and compensatory damages, precluding certification on those issues. The definition of nicotine-dependant people was sufficient with the exception of anyone with at least one unsuccessful quit attempt.”

“In an interlocutory appeal, the U.S. Court of Appeals for the Fifth Circuit decertified the class [on May 23, 1996]. It ruled that the District Court abused its discretion in certifying the class. A national class action would fail to consider the effects of variations in state law on the requirements of predominance and superiority. The trial court failed to rule on how the trial on the merits would be conducted. The case would be unmanageable with the variations in law and the numerous plaintiffs’ interests involved. It was necessary to go beyond the pleadings, to defenses, relevant facts and substantive law, to determine whether class certification was appropriate. The class action was not the superior method to try the case because of the undue pressure it would put on the defendants to settle. The large awards possible in the individual suits justify decertification because it would not be unreasonable to try the cases individually. The court held that the tobacco tort was not yet “mature” enough to warrant a class certification because not enough addiction-as-injury cases had been tried.”

“In response to the decertification, members of the Castano consortium (known as “Castano P.L.C.”) filed more than two dozen putative class actions in state courts. These cases were commonly known as “baby Castano” actions. Only one of those cases, Scott v. American Tobacco Co., et al., proceeded to a trial. The Castano case continued as an individual personal injury suit for the representative plaintiffs.”

“The United States District Court, Eastern District, Louisiana, by way of the Honorable Judge Berrigan, denied the defendants’ motion for summary judgment. The judge ruled that the claims involved injury of addiction, and that genuine issues of fact regarding the meaning of “addiction”, when smokers knew cigarettes were addictive and when smokers discovered the defendants’ concealment and manipulation of nicotine levels precluded summary judgment on prescription grounds. Because the plaintiffs realized they were addicted to nicotine more than one year prior to the filing of the lawsuit, the defendants argue that their claims are prescribed by the state law. Prescription did not begin to run until the plaintiffs had a reasonable basis to sue a specific defendant.”

Source: Zegart, Dan. “Breathing Fire on Tobacco.”
The Nation, August 28/September 4, 1995, pp. 193-196.

In January 1998, the parties agreed to dismiss the action without prejudice and toll the statute of limitations. The defendants paid $5.9 million to reimburse costs and expenses for the plaintiff’s counsel. This payment was to be credited against any subsequent action implementing the resolution.”

 

 

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