WASHINGTON -- The U.S. Supreme Court rejected an appeal by several southern and western cigarette wholesalers that alleged Philip Morris and R.J. Reynolds Tobacco engaged in price discrimination through wholesale incentive programs the tobacco companies used to boost cigarette sales, reported Dow Jones.
The case is Andalusia Distributing Co. v. R.J. Reynolds Tobacco Co., 06-1578.
Cigarette wholesalers serving Tennessee, Kentucky, Mississippi, Texas, Oklahoma and other states sued the two tobacco companies in 2003 over tiered [image-nocss] wholesale pricing systems that offered volume discounts to wholesalers for increased cigarette sales to retailers.
The wholesalers alleged in their lawsuits that the pricing programs were designed to crowd out discount cigarette products and that they suffered profit losses because customer demand for discount cigarettes kept them from meeting Philip Morris and R.J. Reynolds requirements for wholesale price breaks.
A U.S. District Court in Tennessee dismissed the lawsuits. The 6th U.S. Circuit Court of Appeals in Cincinnati agreed, allowing the dismissals to stand (click here for CSP Daily News coverage).
Click here to view the original court documents.
The tobacco industry Monday also lost the chance to get the remaining remnants of a Florida class-action lawsuit thrown out, as the U.S. Supreme Court declined the industry's appeal over what is left of a $145 billion verdict rejected on appeal in Florida, Dow Jones also reported.
The industry in July 2006 won a largely favorable ruling from the Florida Supreme Court, which refused to reinstate the $145 billion in punitive damages awarded by a Florida jury and declined to revive the lawsuit's class-action status.
The Florida court, however, allowed the up to 700,000 individuals who could have won judgments under the original verdict to use findings from the extensive jury trial to bring new cases against the tobacco companies.
Companies named in the lawsuit include Philip Morris USA, a unit of Altria Group Inc.; Brown and Williamson Holdings Inc., a unit of British American Tobacco PLC; Lorillard Tobacco Co., a unit of Loews Corp.; and R.J. Reynolds Tobacco Co., a unit of Reynolds American Inc.
The tobacco companies asked the Supreme Court to bar smokers from using the existing jury findings to bring new cases, a maneuver Florida state courts said would speed up the already-14-year-old tobacco litigation as it moved forward. The companies also argued that federal tobacco advertising laws bar state-level lawsuits over tobacco marketing and the failure of companies to warn of smoking risks.
Attorneys for plaintiffs in the lawsuit said the tobacco industry has successfully challenged the damages judgments in the class-action case already. "Now petitioners ask this court to completely erase all traces of the 13-year Florida class-action," the attorneys said, urging the Supreme Court to reject the appeal.
The tobacco industry, for its part, argued the state court ruling preserving jury findingswhich the companies said are vague and abstractis unfair as it faces additional smoker litigation. "The Florida Supreme Court has abandoned a fundamental due process limitation," the companies said.
The Florida tobacco litigation-R.J. Reynolds Tobacco Co. v. Englebegan in 1994 as a class-action lawsuit filed in a Miami-Dade County state circuit court. The case ultimately covered up to 700,000 Florida smokers who suffered or died from smoking-related illnesses. A yearlong trial resulted in actual damages for three plaintiffs and a $145 billion punitive damages pool to be split among the class following hearings on each individual case.
A Florida appeals court reversed the judgment in 2003. The Florida Supreme Court revived portions of the ruling in 2006 and set up the structure under which plaintiffs in the case could bring new actions through January 2008.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.