Florida's Dream Team Beats Big Tobacco for $11.3 Billion: Yerrid's Racketeering Play Tripled the Stakes

For decades, Big Tobacco had never lost a case. More than 800 plaintiffs had tried and failed. The industry's defense machine was widely regarded as unbeatable. When Florida decided to sue the major cigarette manufacturers to recover Medicaid costs tied to smoking-related illness, Governor Lawton Chiles assembled a private legal team of 11 trial lawyers to take on the fight. C. Steven Yerrid of Tampa was the youngest member of that group.

Florida's lawsuit rested on a narrow but politically charged theory: that the tobacco companies had knowingly sold an addictive and lethal product to the state's citizens, forcing the state to absorb billions in health care costs through its Medicaid program. The state sought to recover those costs directly. What Yerrid brought to the table was an expansion of the legal theory. He was assigned the task of grafting racketeering and conspiracy claims onto the complaint under Florida's RICO statute. Those additions were not cosmetic. They tripled the ceiling on damages the state could recover if the case went to a verdict.

The trial opened in mid-1997. By the third week, the pressure had shifted. The tobacco defendants approached the team with a $3 billion settlement offer. Yerrid relayed it to Governor Chiles and the full team at a dinner meeting. Fellow team member Bob Montgomery counseled against accepting. Yerrid agreed. Over the following days, the offer climbed, each morning bringing a higher number than the day before. By the end of that week, the case settled for $11.3 billion, payable to Florida over 25 years.

Beyond the money, the settlement carried structural concessions that the industry had never granted before. The manufacturers agreed to retire the Marlboro Man and Joe Camel characters, ban billboard and transit advertising, remove cigarette vending machines accessible to minors, and fund the Truth Campaign, an ongoing public education effort aimed at reducing youth smoking. Because the agreement contained a most-favored-nation clause, the terms flowed into subsequent state settlements and helped set the floor for the broader Master Settlement Agreement reached with 46 other states the following year.

At the time of signing, the Florida settlement was the largest civil settlement in U.S. history. Governor Chiles called it 'the straw that broke Joe Camel's back.' The American Museum of Tort Law identifies C. Steven Yerrid among the private attorneys who represented the state in the case.