Record $23B Verdict Against Cigarette Giant

A Florida widow was awarded $23 billion from R.J. Reynolds after her 36-year-old husband died of cancer.
4:43 | 07/21/14

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Transcript for Record $23B Verdict Against Cigarette Giant
-- It's Monday July 21 the New York City financial markets are open and today's big number it's -- three billion dollars. That's the total damages awarded by a jury in Florida to the widow of a long time smoker died of lung cancer against the RJ Reynolds Tobacco Company. Hello everyone I'm Michelle Franzen in New York -- with those details Lauren -- of Yahoo! finance good morning Lauren. Good morning but first the details of the lawsuit who brought this case and what's that all about. To this Florida. What who is -- -- -- as he mentioned she was suing over the death of her husband who was a longtime smoker he died at age of 36. Of lung cancer he had started smoking when he was thirteen years old smoked for twenty years. And she sued the maker of the -- -- he smoked Kool cigarettes. Arguing that they concealed the health hazards and risks and the jury awarded this huge. Punitive damage settlement. What's interesting is this stems from a case didn't it goes further accident in 2000 there was a class action lawsuit in Florida where a 145 billion dollars in punitive damages were awarded. Two a whole group of smokers. What happened was that went to an appeals court and 2006 -- court sent hate these are two disparate and -- says we're throwing this out but it. If people that participated in this class action lawsuit can pursue their own cases so this was one of them and this is actually the largest settlement to stem from one of those cases -- they were. Free to move forward of course we're a long way off though from RJ Reynolds writing any kind of check here yet in a statement. A lawyer for RJ Reynolds calls this a quote runaway verdicts and announced plans to appeal now those appeals are -- and affective. At least in terms of reducing the award -- And that is exactly right so -- did dad General Counsel is saying this is -- -- The action earlier she'd actually does have a point. About how these cases -- so the Supreme Court has laid out boundaries for how punitive damages how how high they can be. Relative to compensatory damages so. Compensatory are our big damages awarded for an actual Latin you know victimization pain or suffering that you endured. Had been the victim is in Jordan where as punitive tormented to punish that the perpetrators the company whatnot. So they said they you can't aberration -- -- -- the ratio boundaries around ten to one in in this case the compensatory damages -- seventeen million dollars so that's obviously of long way off on 23 billion so given past precedent -- would be -- 150 million dollars that punitive damages could really be. So this is expected that any appeals process and this -- and billion dollars will be whittled down extremely significantly. -- -- verdict also comes just days after the parent company of RJ Reynolds announced it was acquiring rival. -- -- any chance that this jury verdict could affect back. -- things get interesting so yes it's widely reported -- this case that the verdict that kid damages are going to be reduce it significantly but. The stock price. This company as well as Lorillard which it is acquiring as well as other tobacco companies are at least Altria which is the parent company of Philip -- -- Stock prices share -- is all down this morning a couple of percent so. Here's what an analyst at about why -- Reynolds is seeing that suffering -- that -- you know that and getting their share price affected by this. They're -- it's because even though. It's expected that the damages will be reduced. In the short term it's not clear how this -- process would impact. This deal going through this is at 27 billion dollars -- acquisition of Lorillard by Reynolds. So -- some concern over that and you're seeing that reflected in the stock price according to what analysts are out saying today also it's interesting you're seeing a lot of folks. Whether it's the lawyer for the plane -- which maybe it's not surprising but also. Analysts and and other experts saying that this jury. Seems to be sending a message and that it shows today perhaps he's kind of messages could be sent. Continually are more juries could do this and more cases and so this could be something that the end could impacted in impact -- -- companies you know this isn't as some might think this is yesterday's news but this story kind of highlights -- seemed to indicate that it's not. And we'll watch how this plays out as the appeal process works its way through -- -- from Yahoo! finance thanks for joining us. Think -- you of course can keep up with the latest headlines right here on You've been watching big number. I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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