COURT THROWS OUT $10 BILLION “PRICE”
SUIT
Major victory for tobacco industry
The Illinois Supreme Court threw out a $10 billion class-action
suit against Philip Morris USA, dealing a significant victory to
the tobacco industry and dimming the prospects of success for similar
suits.
The closely followed ruling, which divided the court 4-2 with one
abstention, indicated that the Federal Trade Commission had specifically
allowed Philip Morris to market its “light” cigarettes
as “light” and “low tar,” thereby nullifying
the plaintiffs’ contention that such terms misled the public.
The case was remanded to the Madison County Court for dismissal.
The suit, widely known as the “Price” case, provides
a major setback for the prospects of success for similar class action
suits. This landmark case comes on the heels of several other litigation
victories by the tobacco industry. A final ruling in another class
action case, known as “Engle,” is expected from the
Florida Supreme Court in the near future.
The suit was originally filed in the Madison County, Illinois Circuit
Court. The plaintiffs alleged that Philip Morris USA had defrauded
"Lights" smokers by implying that Marlboro Lights and Cambridge
Lights were less hazardous than full-flavor brands.
On March 21, 2003, Judge Nicholas Byron awarded the plaintiffs
compensatory and punitive damages totaling $10.1 billion against
Philip Morris USA. The judge also awarded attorney fees in the amount
of $1.775 billion to be paid from the $10.1 billion judgment. Philip
Morris appealed that ruling and, ultimately, the Supreme Court agreed
to rule on the case in an expedited manner.
12/15/05
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