Tag Archives: Lorillard

Engle case, Engle vs. Liggett, Florida, Lorillard, Philip Morris, RJ Reynolds

Breaking: Big Tobacco companies agree to $100 million settlement of Engle cases

Howard Engle
Howard Engle

 

Breaking news!

RJ Reynolds, Lorillard and Philip Morris have reached a $100 million settlement of 400  Engle cases in Florida. I thought they might do this. I’ve been writing for months that, every way I cut it, it was in their interest to do this.

The Engle (named after Howard Engle, a smoker who died several years ago) cases came from a Florida Supreme Court decision throwing out a $145 billion class-action judgement against Big Tobacco for its years of lies and cover-ups over the dangers of smoking. However, while throwing those cases out, the state Supreme Court opened the way for individual plaintiffs to file separate lawsuits against Big Tobacco.

Since then, literally thousands of lawsuits have been filed in Florida and Big Tobacco has been losing about two-thirds of these cases, with hundreds of millions of judgements awarded in favour of over a hundred plaintiffs. Most of those judgements have been upheld on appeal.

Rather than go through at least another decade of losing these cases (not to mention all the legal fees), I figured sooner or later, Big Tobacco was simply going to settle.

This settlement involves 400 cases filed in federal court. That’s $250,000 per plaintiff. I’m guessing there’s going to be more settlements, because I believe there’s several thousand more lawsuits ongoing, and that a lot of them are in state courts. So this settlement may have solely been to deal with the federal cases. And in fact, the NBC story is careful to say “it’s the first settlement by Big Tobacco to settle a chunk of Engle cases.”

Under the agreement, Lorillard will pay $15 million, while RJR and Philip Morris will each pay $42.5 million. This settlement won’t affect cases that have already been settled.

Great news for these families devastated by smoking! I’ll be keeping an eye out for future Engle settlements in Florida.

 

 

 

 

Altria, Blu, Lorillard, Philip Morris, RJ Reynolds

Slumping cigarette sales prompts R.J. Reynolds-Lorillard to talk merger

reynolds

A very interesting story about major changes in the works in the tobacco industry.

The No. 2 tobacco company in America — R.J. Reynolds — is in talks to buy the No. 3 tobacco company in America — Lorillard (which I have misspelled Lollilard more times than I can count.). Imperial Tobacco is also involved in the deal.

This deal would create a $56 billion company and would create a monster rival to the dominant No. 1 tobacco company in America — Altria, otherwise known as Philip Morris (its dominant brand is Marlboro, of course).

Reynolds and Lorillard would combine for 42 percent of the cigarette market, joining Reynolds’ big product — Camel — what Lorillard’s — Newport. Other Lorillard brands are Kent and Old Gold, while other Reynolds’ other brands are Pall Mall, Winston, Salem and Kool. But, Camel and Newport are the dominant brands.

dbpix-camel-tmagArticle

The new joint company then would sell off several of their smaller brands to Imperial Tobacco, a British-owned company that would then become the No. 3 company in America.

According to the New York Times, declining cigarette sales are driving this move, as both companies work to restore their past profits. E-cigs are also a factor in this deal, as the e-cig industry is booming (got mixed feelings about that), and Lorillard owns the No. 1 e-cig brand, Blu E-Cigarettes.

According to the New York Times:

Still, a takeover of Lorillard by Reynolds would represent the industry’s boldest response yet to a declining, if still profitable, market. A general drop in smoking rates and aggressive public health campaigns aimed at curbing smoking have cut into sales in the United States.

About 42 million people in the United States, or nearly 18 percent of the adult population, smoke cigarettes, according to the Centers for Disease Control and Prevention. That compares with about 21 percent of the adult population nearly a decade ago and 43 percent of the adult population in 1965, according to the C.D.C.

What remains of the traditional cigarette industry is dominated by Altria, whose Philip Morris arm sells one out of every two cigarettes in the United States.

Opportunity has beckoned in the new business of e-cigarettes. A deal by Reynolds to buy the leading purveyor of e-cigarettes could spur other mergers within the industry as manufacturers jockey for position.

“This transaction in our view will be very positive for the global tobacco industry and could be just the beginning of future transactions with e-cigs/vapor being the underlying catalyst,” Wells Fargo analysts wrote in a note.

Anyway, interesting story as the industry adjusts to a rapidly changing and evolving market. This deal is not cast in stone, as it must be approved by federal regulators and could face scrutiny over