Tobacco Company's Texas Victory Continues Industry's Streak

By BridgeNews Brown & Williamson Tobacco Corp.'s legal win yesterday in a Texas county known for being plaintiff-friendly is an "important victory" for a cigarette industry that has not lost an individual case in nearly a year, a Wall Street analyst says. A jury in Beaumont, Tex., voted 10-2 in favor of Brown & Williamson, the U.S. unit of London-based British American Tobacco PLC, in a product liability lawsuit brought by the family of a smoker. The lawsuit, filed in 1995 against American Tobacco Co., which Brown & Williamson acquired, involved claims by Jeannie Grinnell and the estate of her husband, Wiley Grinnell Jr., who smoked from 1952 to 1985. Grinnell Jr. died in 1986. The plaintiffs, who alleged the company withheld knowledge that smoking was addictive and that Grinnell would not have started smoking had he known, sought $10 million in compensatory damages and unspecified punitive damages. Because Jefferson County is seen as having plaintiff-friendly jurors, the verdict is an "even more important victory," than usual for both the company and the industry, says Martin Feldman, tobacco analyst with Salomon Smith Barney. Feldman notes the case is the sixth individual trial since last April to have been either won by the industry or ruled as a mistrial, which is also seen as a victory. Brown & Williamson, maker of such brands as Kool and Lucky Strike, is the third largest marketer of tobacco products in the U.S. British American Tobacco is the world's second largest tobacco firm behind Philip Morris.

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