NEW YORK (Reuters) - U.S. cigarette makers face a crucial courtroom verdict this week in a California sick- smokers case as the beleaguered tobacco industry tries to turn back a tide of individual lawsuits waged against it.

The Whiteley trial, named after the 40-year-old plaintiff, Leslie Whiteley, who is terminally ill with lung cancer, follows last year's high-profile multimillion-dollar rulings against the tobacco industry in California and Oregon -- two judgements that are pending appeal. The defendants, Philip Morris Cos. Inc. and R.J. Reynolds Tobacco Corp. have enlisted their top lawyers in the trial to stem some 700 individual cases in the United States waged against the industry -- a specter that tobacco experts view as the main long-term threat to cigarette stocks. The case is also significant for cigarette companies because it features a plaintiff who smoked marijuana and did not rely on advertising to start smoking cigarettes in 1972 -- begging the question: If cigarette companies cannot win this case, what does the future hold? ``The companies need to be able to show investors that individual case litigation is unattractive to plaintiff attorneys,'' analyst Martin Feldman of Salomon Smith Barney said of the case, which also names a handful of asbestos firms as defendants. ``So they need to win either the majority or all of the individual cases against it. On the West Coast, its record so far is two out of two losses -- and big losses -- which makes the market particularly interested in this trial,'' Feldman said. Tobacco stocks have taken a beating on Wall Street as a headline-grabbing sick-smokers class action lawsuit in Florida and a U.S. Justice Department lawsuit -- two cases weighing heavily on the industry's short-term outlook -- have sent cigarette shares near all-time lows. But industry analysts said the punch-drunk stocks could stoop further if the industry loses the California case that has played to the industry's strengths. Defense lawyers have been able to portray an ``unsympathetic'' plaintiff who smoked marijuana plus up to two packs of cigarettes a day and was advised by her doctor to stop smoking during her four pregnancies. ``There is more risk for these stocks on the downside than on the upside,'' Bill Pecoriello of Sanford C. Bernstein said, adding that cigarette shares could fall as much as 10 percent if a jury in an anti-tobacco state like California goes against the industry. ``A loss in Whiteley and the market says look, you lost one here where plaintiff started smoking after warning labels went on packs and there wasn't the ideal, sympathetic plaintiff ... which are areas the defense had going for it in the case. That realization will contribute to increased jitters for the market,'' Pecoriello said. The jury in the Whiteley trial, which features the same lead plaintiffs' attorney and the same judge as last year's Henely case in San Francisco that led to a $50 million verdict against Philip Morris, must assess the plaintiff's and defendant's share of the fault and then reduce the plaintiff's damages by her percent of fault based on pure comparative fault principles under California law. So if the cigarette companies are found to be 50 percent responsible for Whiteley's illness, then they will have to pay 50 percent of any punitive damages award under the pure comparative fault law. Most of the some 700 sick-smoker cases against cigarette makers have been filed in pure comparative fault states, such as New York, Florida and Oregon -- a reality that raises the stakes in the Whiteley case. ``It comes down to how sympathetic the jury is toward Leslie Whiteley,'' Pecoriello said. ``I think that plaintiffs did convince jury that cigarette makers are at least partially responsible for her disease. But did the defense convince the jury that she knowingly took the risk?'' The trial is expected to go to jury Tuesday or Wednesday of and a verdict is expected by Thursday or Friday of this week.

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