Monday, July 21, 2014

Tobacco company punished with $23.6 billion

R.J. Reynolds Tobacco Co., the second largest Tobacco company in the US was demanded to pay a total of $23.6 billion in punitive damage for the reason of causing a man to death by lung cancer.

CTV News: U.S. tobacco company hit with $23.6B in punitive damages after widow's lawsuit

The decision was made by a Florida jury. This kind of lawsuits is increasing there after the state supreme court ruled that the complainant need only to prove that the victim suffered from smoke addiction and that the smoke resulted in fatality.

Actually, addiction is a complicated problem. In general, addiction and dependence of substance are self-invited diseases. Patients are responsible for their addiction. It is impossible that a person who stole a bottle of wine is permitted for the reason of alcohol addiction. On the contrary, whoever sells addictive drugs may be strictly punished. So which is more effective to reduce the harm of addictive substances, to regulate sellers or buyers? The answer is simple, the former, because sellers are more easily to be grasped. It is one of the reason why sellers of alcohol and tobacco are required to get permission before starting the deal in many countries.

From this point of view, the court decision is a message for tobacco companies. They have to educate the consumers more and more to protect them from harmful use.

It may be ridiculous to some extent. Who dare to say the disadvantages of their own products? Tobacco companies will struggle to continue their deal, at least in Florida. Reynolds decided to buy Lorillard, the third biggest tobacco company in the US just before. The amount of money for a buyout is $25 billion, ironically almost same as the damage.

The Wall Street Journal: Reynolds American to Buy Lorillard for $25 Billion

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