Philip Morris 'Light' Verdict Reinstated
Altria will appeal $10.1 billion judgment
Published in Tobacco E-News
MOUNT VERNON, Ill. --Illinois' Fifth District Court of Appeals ruled Tuesday to reinstate a $10.1 billion verdict against Philip Morris USA, reported Reuters. Handed down by a state judge in 2003, the lawsuit accused Philip Morris and its parent company, the Richmond, Va.-based Altria Group Inc., of violating Illinois' consumer fraud law by using terms such as "light" and "low tar" to describe its cigarettes.
The Illinois Supreme Court overturned the verdict in 2005 and the U.S. Supreme Court upheld it in 2006 based on the fact that the U.S. Federal Trade Commission (FTC) had permitted the use of such terms in prior settlements and consent decrees with other tobacco manufacturers.
In its decision, the Illinois Supreme Court found that, with these previous decrees, the FTC intended to "provide guidance to the entire cigarette industry."
In 2008, the FTC opened the door for the approximately 1.4 million plaintiffs to revive the case when the agency officially changed its more than 40 year policy on how tobacco companies could describe tar and nicotine levels on cigarette packaging. According to the Fifth District Court, the FTC said it had neither defined "light" or "low tar," nor "provided guidance or authorization" on their usage.
A reinstatement of the original verdict seemed unlikely, as Circuit Judge Dennis Ruth, of Edwardsville, Ill., dismissed the case in December of 2012 because the plaintiffs had not proven it was "more probably true" that the Illinois Supreme Court would rule in their favor.
The three-judge Fifth District panel, however, disagreed. In a ruling written by Justice Melissa Chapman, the panel said Ruth lacked the authority to determine how the FTC's policy change might have affected the damages and that overturning the decision effectively reinstates the original 2003 verdict.
"The only ruling it reversed was the trial court's decision to deny the defendant's motion for summary judgment on the basis of (the) Consumer Fraud Act," she wrote. "Vacating the dismissal order will reinstate the proceedings with the verdict intact."
Representatives for Altria said the company would appeal the ruling immediately.
"The law does not allow the Fifth District to reopen a decision by the Illinois Supreme Court based on speculation about the possible impact of subsequent events," Altria associate general counsel Murray Garnick said in a written statement cited by the news agency.
Stephen Tillery, lead counsel for the plaintiffs and a partner at the St. Louis-based Korein Tillery, expressed optimism that the $10.1 billion verdict would ultimately be upheld.
"The plaintiffs believe very strongly that this was the correct decision," Tillery told Reuters. "The law is abundantly clear. I don't think, as a matter of fact or law, that Philip Morris has a strong appellate outlook."
If the Illinois Supreme Court agrees to review the case, the verdict will be put on hold; if the Supreme Court denies Altria's request for appeal, it would be remanded to a trial court with the original verdict reinstated, requiring the company to post a $250 million bond.