Tobacco keeps getting kicked in the teeth. And the implications are grim for a wide variety of companies, not just tobacco.
Lorillard just lost a case filed by a man with mesothelioma, a type of lung cancer that is nearly always fatal and is linked to asbestos exposure. The man is elderly, and last smoked Lorillard's asbestos-containing cigarettes over 3 decades ago. The adverse health effects of asbestos were not known until over 2 1/2 decades later. Yet Lorillard is liable. This sounds ridiculous, especially, since Lorillard had added the asbestos to decrease the particulate emissions of cigarettes.
Even more ridiculous is the man worked manufacturing airplane stuff for Owens Corning for most of his life. If ever there is a reason he got mesothelioma, it's this.
So what did he do? He sued both, and Lorillard was found liable while Owens settled. Implicit guilt on both parties. To me, very sad, though not as ridiculous as an 80 million dollar judgement against Philip Morris for a smoker who died probably because he smoked Pall Malls (NOT a MO brand). But the net is that I am realizing the tobacco risk is very high, and that, while I won't sell my MO or UST positions yet, I will have to re-evaluate. The reason is that companies are being found liable on even the slightest suggestion that they might be liable. No proof necessary. And the awards are exorbitant. This sort of irrationality is a big wild card.
This big "not my responsibility...but who can I blame?" attitude sweeping the country, especially in the aftermath of the Littleton disaster, is to me a big risk now for tobacco, gun companies, and eventually any company that makes high-fat food, or sells it. Watch out Cheesecake Factory. Future liability should be figured into the valuation of Keebler and any other dealer of fat. And don't forget sports equipment companies that entice adults to injure themselves running and such. Nike, beware.
Meanwhile, I'm getting sick seeing such an outpouring of self-righteous hypocrisy and ignorance. So who can I sue for my nausea?
Mike |
