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CAN TOBACCO FIRMS NOW BREATHE EASIER?

Cigarette companies may have dodged a missile, but now they could face a fusillade of bullets.

Rather than the one huge class-action lawsuit rejected Thursday by a federal appeals court, tobacco companies were targeted Friday with the first of what could be another round of state-court lawsuits on behalf of smokers."It is multiplying their risk by 50," said attorney Richard Scruggs, who is pulling together states suing for health-care costs from cigarette makers. "They cannot afford to lose a single case."

But another expert on tobacco litigation said class-action suits in the individual states will be a tough task, especially in those states that have put limits on civil suits.

And Scruggs acknowledged that it will be difficult for smokers' attorneys to coordinate scores of state suits.

The two state suits that were filed Friday, in Louisiana and Maryland, are no surprise and are destined to fail based on the appeals court action, said Peggy Carter, a spokeswoman for R.J. Reynolds Tobacco Co. in Winston-Salem, N.C.

"There is clearly no crisis," she said. "We have far fewer lawsuits filed against us than many other industries. We have never lost a lawsuit."

New Orleans lawyer Wendell Gauthier, who filed the state suit in New Orleans, said no decision had been made on how many state lawsuits would be filed. He said it was possible that the U.S. Supreme Court would be asked to review Thursday's decision.

A three-judge panel of the 5th U.S. Circuit Court of Appeals agreed with tobacco industry contentions that a federal class-action lawsuit would be too big and complicated.

One jury would have determined whether the industry knew nicotine was addictive and hid that knowledge and whether it manipulated nicotine levels in cigarettes.

The tobacco industry insists nicotine is neither addictive nor manipulated and says class-actions are inappropriate because every smoker reacts differently to cigarettes.

The federal suit thrown out by the appeals court was filed in 1994 by Dianne Castano, whose husband died of lung cancer, and three smokers against the R.J. Reynolds Tobacco Co., American Tobacco Co., Brown & Williamson Tobacco Corp., Philip Morris USA, Lorillard Corp., United States Tobacco, the Liggett Group and the industry's lobbying arm, the Tobacco Institute.

Liggett, the smallest of the nation's major tobacco companies, broke ranks in March and agreed to settle, pledging to dedicate some of its profits over 25 years to pay for smoking cessation programs.

Although Liggett retained an escape clause - that it could back out if the class-action was nullified - the tobacco maker indicated Thursday the deal may stand in light of planned state lawsuits.

Two class-action suits already have survived appeals court challenge in Florida, one filed by smokers that is similar to the Castano case and another filed by 63,000 flight attendants exposed to secondhand smoke on airplanes.

The tobacco industry has appealed to the Florida Supreme Court.

Attorney Matthew Myers of the Campaign for Tobacco-Free Kids in Washington said that while state courts are more lenient in allowing class-actions, tort reform in at least two - Texas and California - "will make these (smoking) cases difficult if not completely impossible," Myers said.

Scruggs said that if the appeals court had upheld the class-action, the industry probably would have opted for a settlement.

"They chose not to do it. They could have gone about their business relatively bulletproof," Scruggs said. "Now, it's going to be protracted trench warfare for a while," he said.