WASHINGTON -- The U.S. Supreme Court let stand on Monday a ruling that threw out a $10.1 billion verdict against Philip Morris USA in a lawsuit that accused the Altria Group Inc. unit of misleading consumers about the risks from smoking "light" cigarettes, reported Reuters.
"Today's decision by the U.S. Supreme Court denying certiorari in the Price case brings an end to the appeals process in this case," William S. Ohlemeyer, PM USA vice president and associate general counsel, said in a statement. "The company now will take the procedural steps necessary [image-nocss] to obtain the return of its $6 billion note, which secured the judgment pending this final appeal and have final judgment entered by the trial court in Madison County [Ill.] in favor of Philip Morris USA.
The justices rejected an appeal by the plaintiffs of the Illinois Supreme Court ruling in December that ordered the dismissal of the class-action lawsuit that accused the company of defrauding customers into thinking "light" cigarettes were safer than regular ones.
The Illinois Supreme Court ruled that the Federal Trade Commission (FTC) has authorized tobacco companies to characterize their products as "light" or "low tar and nicotine."
It said a section in the Illinois Consumer Fraud Act exempts a company from being punished for behavior allowed by a specific regulatory body.
Attorneys for the plaintiffs appealed to the U.S. Supreme Court. "The Illinois Supreme Court erred in interpreting federal law as giving any authoritative legal effect to" the consent orders entered into by the FTC and specific tobacco companies, they said.
The initial $10.1 billion judgment was handed down by a trial court judge in 2003. The Illinois Supreme Court then took the unusual step of hearing the case on appeal directly from the trial court.
Richmond, Va.-based PM USA urged the U.S. Supreme Court to reject the appeal. The U.S. Supreme Court denied the appeal without any comment or recorded dissent.
Overall, we believe this is great news for the industry as it reinforces our belief that lights' class actions create a lot of headlines, but all lead to being a dead end for the plaintiffs, said tobacco stock analyst Bonnie Herzog of Citigroup in an investor note yesterday.
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.