Lawsuits charging tobacco companies with failing to warn consumers about the health hazards of smoking have spawned legal action against another industry - the makers of alcoholic beverages.
While there are few cases so far, legal experts believe a Pennsylvania federal appeals court ruling against Stroh Brewery Co. will begin to open doors for claims that companies should warn consumers about the problems related to drinking alcoholic beverages."The decision suggests that alcoholic beverages with their staggering toll of alcoholism and other illness may be a promising target for product liability initiatives based on failure to warn," said Gary Rubin, a New York lawyer who is executive director of the Council for Law and Education on Alcohol Risks.
At the same time, about 100 consumer groups are pushing for legislation to force alcoholic beverage companies to place warning labels on their products. A hearing on such a proposal is scheduled for Aug. 10 before the Senate Commerce Committee.
The lawsuit in Pennsylvania, expected to go to a federal jury in Scranton late this year or in early 1989, was filed by the widow of man who died at age 26 from pancreatitis, inflammation of the pancreas. The plantiff, Nancy Hon, alleges the disease was caused by her husband's moderate consumption of beer.
During the six years before his death, William Hon drank two to three cans of beer around four nights each week. His wife charged that Strohs, which made the beer her husband drank, had a responsibility to warn that even moderate consumption can cause illness.
The district court granted Strohs' motion to throw out the case, but the court of appeals reversed the decision and ordered a new trial.
A spokeswoman for Strohs would not comment on the case.
Although the ruling was made in December 1987, it has recently been getting attention because of a landmark tobacco case last month in Newark, N.J. The jury in that case found that Liggett Group had a duty to warn about the health hazards of smoking prior to 1966. The case is being appealed.
The Newark decision was the first time a jury found in favor of plantiffs in a case charging tobacco companies with failure to warn consumers of health risks.
Other such attempts have been unsuccessful because courts have held that tobacco companies are protected by the 1966 federally mandated cigarette warning label. In the Newark case, however, charges were made about smoking prior to 1966.
"I think that alcohol is a more suitable vehicle for product liability initiative than tobacco," Rubin said. "In the case of alcohol there are no (federally mandated) warning labels."
The tobacco ruling has also put the spotlight on four suits in Seattle - three in federal court and one in Washington state court - alleging that the consumption of alcohol by pregnant women resulted in their children's birth defects.
The plantiffs are suing seven alcoholic beverage companies and charging that their products should have carried warning labels advising of the hazards posed by drinking during pregnancy.
Barry M. Epstein, a Newark lawyer, said the Seattle case he is handling, which was filed against James B. Beam Distilling Co., will be the first to go to trial. The trial is expected to begin in April of next year. Defendants in the other suits include Strohs and Anheuser-Busch.
In a report this month, Britain's Kleinwort Grieveson Securities changed its recommendation on Anheuser-Busch from "buy" to "reduce" because of the Scranton and Seattle lawsuits.
"Clearly plaintiffs have major obstacles to overcome before winning a case against alcohol companies as they did with the cigarette industry. Nonetheless, when Wall Street focuses on this issue over the coming weeks and months the effect on sentiment - and share prices - could be dramatic," wrote Noel Sloan in the report.
An article on the Hon case was the top story in the May issue of Law Reporter, published by the Association of Trial Lawyers of America. Many of the most prominent lawyers involved in bringing product liability cases are active in the group.
"The value is that it opens up a new breach in the distilleries' wall of defense: sue them for failure adequately to warn of the serious danger from 'moderate' drinking," wrote Thomas Lambert, law professor at Suffolk University Law School.
However, analysts who follow the alcoholic beverage industry for U.S. brokerages are unconvinced that such lawsuits present a threat to beverage makers.
"No, I'm not concerned about it," said Lawrence Adelman of Dean Witter Reynolds. "While you don't close your eyes to these things, it's not at the top of the list (of concerns). Besides, there is a general feeling that the number of tobacco cases are subsiding."
George Thompson of Prudential-Bache Securities said he was not worried about the suits. Referring to the Kleinwort Grieveson report, Thompson said: "It's another person's opinion. I found it a little surprising."
He said he sees the suits against alcoholic beverage companies as being quite different from the tobacco cases.
"The incidence of alcohol abuse is very low when compared to smoking. You could raise the same arguments with salt poisoning."