SPRINGFIELD, Ill. -- The Illinois Supreme Court on November 4 threw out a $10.1-billion verdict against Philip Morris USA in a long-running Price lawsuit accusing the Altria Group Inc. unit of misleading smokers about the health risks of “light” cigarettes, reported the Associated Press.
By a four-to-two vote, the court said lower-level state courts lacked authority under Illinois law to re-impose the verdict first rendered in 2003 against PM USA.
Justice Anne Burke wrote for the majority that the plaintiffs could still ask the Illinois Supreme Court itself to reinstate the award, which it had thrown out in 2005. The court did not address the merits of such a request.
Justice Charles Freeman dissented, said the report. He said the lower courts had power to punish PM USA for its “appalling” conduct in long concealing the risks of light cigarettes, and fueling a “public health epidemic” caused by smoking and tobacco exposure.
The decision for now voids one of the largest U.S. verdicts against a tobacco company related to smoking and tobacco smoke exposure, AP said.
The class-action case was brought in 2000 on behalf of 1.4 million Illinois smokers. They said Philip Morris deceived them into believing that “light” or “low-tar” cigarettes were safer than regular cigarettes.
Instead of suing over health problems, the plaintiffs sought to recoup sums spent on light cigarettes. It was the first case to go to trial over the marketing of cigarettes as “light.”
In 2008, long after the original verdict was overturned, the Federal Trade Commission (FTC) changed how cigarette makers could describe tar and nicotine levels in advertising and packaging.
That prompted the plaintiffs to revive their lawsuit, only to have a state court judge dismiss it again in December 2012.
But in May 2014, a state appeals court said the judge lacked authority to decide how the FTC action affected damages, and reinstated the original verdict.
The new decision overturned that reinstatement. That verdict was put on hold during PM USA’s
U.S. regulators have since June 2010 banned companies from using “light,” “low” and “mild” in tobacco labeling.
“Today’s action by the Illinois Supreme Court effectively wipes away the last seven years of court proceedings and requires the plaintiffs to start from scratch,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, in a statement on behalf of PM USA. “The court held that the plaintiffs filed the wrong motion in the wrong court. Now to succeed, plaintiffs would have to file a new motion in the Illinois Supreme Court and convince at least four justices to recall their own order, which dismissed the case 10 years ago.”
The Price case alleged that PM USA deceived Illinois smokers who purchased Marlboro Lights and Cambridge Lights cigarettes. The plaintiffs sought a refund of a portion of the purchase price. After a three-month trial in 2003, a Madison County Circuit Court judge imposed a $10.1-billion judgment against PM USA, with $1.7 billion going to the plaintiffs’ attorneys.
The Illinois Supreme Court overturned the award and dismissed the case two years later. Since then, the plaintiffs’ attorneys have sought to reopen the case on numerous occasions and reinstate the award, and in April 2014, they successfully persuaded an intermediate appellate court to do so.
On appeal from the company, the state’s highest court agreed to hear the case nearly a decade after rendering its first decision. During the May oral argument, the company outlined several reasons why the court should let its 2005 decision stand.
“PM USA has been very successful in defending these cases on a variety of legal grounds. In fact, most of these cases have been dismissed prior to trial,” said Garnick.
The U.S. Food & Drug Administration (FDA) prohibits the use of “lights” and other descriptors unless a manufacturer receives authorization to use the terms. The FDA began regulating tobacco products in 2009 with the passage of the Family Smoking Prevention & Tobacco Control Act.
Richmond, Va.-based Altria’s wholly owned subsidiaries include Philip Morris USA Inc. (PM USA), U.S. Smokeless Tobacco Co. LLC (USSTC), John Middleton Co., Nu Mark LLC, Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and Philip Morris Capital Corp. Altria holds a continuing economic and voting interest in SABMiller plc (SABMiller).
The brand portfolios of Altria’s tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, MarkTen and Green Smoke. Ste. Michelle produces and markets premium wines sold under various labels, including Chateau Ste. Michelle, Columbia Crest, 14 Hands and Stag’s Leap Wine Cellars, and it imports and markets Antinori, Champagne Nicolas Feuillatte, Torres and Villa Maria Estate products in the United States.
The case is Price v. Philip Morris Incorporated.
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