When the trial started, Florida law required that defendants appealing an adverse judgment post a bond equivalent to the entire amount of the award. Under this rule, the more ridiculous a verdict, the harder it is to appeal. Worried that the tobacco companies would not be able to meet the bond requirement, Florida's legislature passed a law that capped appeal bonds at $100 million.
The legislature acted not out of love for cigarette makers but out of love for the money they pay the state each year under an agreement that settled Florida's lawsuit against the industry. If the tobacco companies could not challenge the verdict, their ability to keep feeding the state treasury would have been jeopardized.
But the tobacco companies worried that Rosenblatt would challenge the new law, arguing that retroactively changing the rule for appeal bonds was unconstitutional. To forestall that possibility, Philip Morris, Liggett, and Lorillard agreed to pay him and his clients $709 million, whatever the final outcome of the case.
The upshot was that, win or lose, the defendants had to pay off the people who sued them. Otherwise, they would not have had an opportunity to challenge the verdict that an appeals court ultimately rejected as patently absurd.
Philip Morris recently faced a similar quandary in Illinois, where the company was told it could not appeal a $10 billion judgment in another class action unless it posted a bond for $12 billion (the award plus interest). The judge reduced the amount to $6.8 billion after Philip Morris argued that it would be forced to file for bankruptcy.
Illinois is one of many states that do not limit appeal bonds, and there is more than money at stake here. Whatever you think of the tobacco companies or of smokers' claims against them (my opinion of both is low), there's no justice when financial ruin is the cost of getting a fair hearing.