Tobacco Industry Giant Takes on ABC

TOBACCO May 1995

Philip Morris Company, one of the largest and most powerful tobacco companies, is suing ABC Television and its owner Capital Cities, Inc. (Alix M. Freedman and Amy Stevens, "Tar Wars: Philip Morris Is Putting TV Journalism on Trial in Its Suit Against ABC," Wall Street Journal, May 23, 1995, p. 1).

The suit centers around the use of the word "spike" in a "Day One" segment on February 28, 1994. The program used the word to describe tobacco manufacturers' practice of removing nicotine from tobacco and then replacing it in the final stages of processing.

If Philip Morris wins the $10 billion it is seeking, it will be the largest libel award in history. The tobacco giant is spending more than $1 million every month for more than 20 lawyers.

Although the level of proof in a libel case is extraordinarily high (Philip Morris must show that the report was wrong and that ABC knew it was wrong), the tobacco giant is risking little on the case. Capital Cities, however, may go bankrupt if forced to pay what Philip Morris is asking. ABC made only $6.4 billion in 1994. The case is expected to go to trial on October 10.