The Illinois Supreme Court revealed this week that it will finally issue its opinion on the Price Lights case, according to its docket of cases for the September 2005 term. While no specific date for a decision has been set, the opinion could be rendered at any time.
As a refresher, the Price case is a class-action suit filed against Philip Morris USA, Inc. in which the plaintiffs charged that Philip Morris had defrauded smokers of its “Lights” cigarettes by inferring those cigarettes were less harmful than traditional brands.
The trial court in Madison County, Illinois, found on March 21, 2003, for the plaintiffs and assessed Philip Morris with compensatory and punitive damages totaling $10.1 billion. The judge thereupon ordered the company to post a $12 billion bond to stay the judgment during appeal. Judge Nicholas Byron, the trial court judge, later reduced the bond, allowing Philip Morris to place a $6 billion note in escrow, along with $420 million in interest and $800 million in cash.
The plaintiffs in the case successfully appealed the reduced escrow requirement to the Illinois Fifth District Appellate Court in August 2003. On Sept. 16, 2003, the Illinois Supreme Court vacated the appellate court decision and reinstated the escrowed bond arrangement. The Supreme Court also decided, by itself, to consider the Philip Morris appeal of the overall case verdict.
Similar case
Last month, the Illinois Supreme Court reversed and decertified a similar class-action case, Avery v. State Farm Insurance. That case, which had no relationship to tobacco, did, however, have similarities of approach. As a result, hopes were raised that the Supreme Court may rule similarly in the Price case.
Although the Price case is but one of several in courts across the country, the size of its award, basis of complaint and the potential for precedent has drawn great interest from the market for tobacco-related debt. At this point, most observers, including FMSbonds, expects the Supreme Court to rule in favor of Philip Morris and continue the trend of decertification of tobacco class-action suits. Regardless of the outcome, it is likely that the losing party will yet appeal to the U.S. Supreme Court, once again delaying a final outcome.
