MIAMI (November 7, 2000 7:41 p.m. EST nandotimes.com) - Philip Morris
Inc. posted a $100 million appeal bond Tuesday to contest a record $145 billion
award won by Florida smokers against the nation's leading cigarette makers.
The bond underwritten by Kemper Insurance Cos. was filed less than a day after
Miami-Dade Circuit Judge Robert Kaye resisted industry attempts to undermine
the punitive damage award by signing a final order in the case.
R.J. Reynolds Tobacco Co. followed with a bond in the same amount posted
through Travelers Casualty & Surety Co., and both bonds were accompanied by
one-page notices of appeal.
Evelyn Guedes, who supervises the court's appeal bonds, said the other
defendants were expected file their bonds soon as well.
The bond amount was set by a state law passed during the two-year trial
specifically for the class-action case to replace a standard requirement equal to
120 percent of the award. Otherwise, bonds worth a total of $174 billion would
have been needed.
Smokers' attorney Stanley Rosenblatt calls the law unconstitutional, but said he
was still considering whether to contest it.
"We have to evaluate the total picture as to whether we're going to challenge
that," he said.
The law capped the bonds at $100 million or 10 percent of a company's net
worth, whichever is less. Liggett Group, the smallest of the defendants with 1
percent of the U.S. cigarette market, said during trial that the bond requirement
alone could cause financial trouble.
Philip Morris filed a six-page document saying Lumbermens Mutual Casualty Co.,
Kemper's lead company, wrote the bond. "This is as good as cash," Guedes said
with the papers in hand.
A standard bond premium is 10 percent, but the premium and collateral
requirements for bonds of this size depend on a company's commercial
relationship with the underwriter.
With $60 billion in assets, including $4.2 billion in cash, Philip Morris' parent had
no trouble covering the bond.
The other defendants are: Brown & Williamson, Lorillard and the industry's
defunct Council for Tobacco Research and Tobacco Institute. |
