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NEWSDAY, TUESDAY, AUGUST 27, 1996 • 0 Tobacco Stocks Rise After Indiana Verdict By Harry Berkowitz STAFF WRITEH An Indiana jury's verdict last week gave embaf- tled tobacco stocks a lift yesterday, even though antismoking activists continued to insist that the tide has turned against the industry. Philip Morris os.. the nation's biggest cigarette maker, rose $2.371h per share to $90.37'fe on the New York Stock Exchange, while RJR Nabisco Holdings gained $1.12'/a to end the day at $26.62'/z. During the session, Philip Morris had risen as high as $92.75. " - "Juries continue to believe that smokers can quit if they choose, despite claims that addiction con- trolled their behavior, and despite the anti- smoking industry's ef- forts to stigmatize smoking as addictive and smokers as ad- diets," said Daniel W. Donahue, deputy gen- eral counsel at RJ Reynolds Tobacco. The state-court jury in Indianapolis decided late Friday not to award dam- "We would have seen a different result if the Indiana case was tried with the documents," said Richard Daynard, chairman of the Tobacco Pro- ducts Liability Project, a group that encourages anti-tobacco lawsuits- 'Allan Kaplan, an industry analyst at Merrill Lynch who correctly predicted the outcome in In- diana, said despite that, the brokerage f= be- lieves "the tide has shifted toward the plaintiff and that the industry will suffer further adverse court decisions." . Kaplan said, however, that even if the current 275 cases pending against the industry grows to as many as 5,000 within three years, including 1,000 naming 'Juries continue to believe that smokers can quit if they choose . . . despite the antismoking industry's efforts to stigmatize smoking as addictive and smokers as addicts.' Daniel W- Donahue, RJ Reynolds Tobacco ages to the family of a smoker who died in 1987 at age 52 of lung cancer, saying that although four cigarette companies showed "a degree of negligence," plaintiff Richard Rogers bore "a greater responsibility." Donahue said a Florida jury verdict two weeks ago, awarding ex-smoker Grady Carter and his wife $750,000, was an "aberration" and predicted it would be overturned on appeal. Before that rul- ing, Philin Morris stock was up to $105.25 a share and RJR was at $32.25. Norwood Wilner, Carter's lawyer, said yesterday that the Indiana jury was not allowed to see the kind of internal corporate documents that were key to his case. "I don't think it means much," Wilner said of the Indiana verdict. He has more than 100 cases pending, including one due to start Oct. 14 that pits 51-year-old James T. Clark, who is terminally ill with lung cancer, against Liggett Group Inc. Wilner said he expects to be able to introduce in- ternal corporate documents in that case. Philio Morris. the com- pany's costs should be no more than $700 million for awards and expenses. If that is accurate, the stock price should do well, especially if the company raises its divi- dend 20 percent this week, as is expected. Philin Morris senior vice president arles R. Wall said the Indiana verdict sent "a clear sig- nal that there is no legal groundswell." Yesterday, RJR Nabisco also cited the Indiana case in trying to downplay proposed federal leg- islation that would make tobacco companies largely immune from liability suits. In exchange, the companies would pay billions of dollars a year for the next 15 years to reimburse states for the health costs of smoking-related illnesses. A growing number of states have sued to recov- er such costs. "Our tobacco subsidiary is not interested in, and has no intention of, settling the cases against it and remains confident in the strength of its de- fenses," RJR said in commenting on a Wall Street Journal article on the proposal, whose details RJR called "completely unrealistic." Hubert H. Humphrey III, the Minnesota attor- ney general, said the proposed settlement falls short of what should be required and claimed the industry is looking for sympathetic ears in Con- gress to protect it. . 0