Fla. Ruling Big Tobacco Won Comes Back To Bite It
Headline Legal News
A Florida Supreme Court ruling that threw out a $145 billion award against cigarette makers is biting Big Tobacco back, making it dramatically easier for thousands of smokers to sue and turning the state into the nation's hot spot for damage awards.
The 2006 ruling has helped generate more than $360 million in damage awards in only about two dozen cases. Thousands more cases are in the pipeline in Florida, which has far more smoking-related lawsuits pending than any other state.
Though the justices tossed the $145 billion class-action damage award, they allowed about 8,000 individual members of that class to pursue their own lawsuits. And in a critical decision, they allowed those plaintiffs to use the original jury's findings from the class-action case.
That means the plaintiffs don't have to prove that cigarette makers sold a defective and dangerous product, were negligent, hid the risks of smoking and that cigarettes cause illnesses such as lung cancer and heart disease. The plaintiffs must mainly show they were addicted to smoking and could not quit, and that their illness — or a smoker's death — was caused by cigarettes.
Jurors have sided with smokers or their families in about two-thirds of the 34 cases tried since February 2009, when the first Florida lawsuit following the rules set by the Supreme Court decision went before a jury. Awards have ranged from $2 million or less to $80 million, though tobacco companies are appealing them all.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.