Philip Morris Loses Bid to Toss Military Contract Litigation

Philip Morris USA must defend against a whistle-blower lawsuit over cigarette pricing for the military, an appeals court ruled, rejecting the tobacco company’s claim the suit failed to cite new information.

Philip Morris (MO) had argued the lawsuit was fatally flawed because it relied on key information which was already publicly known.

“Neither the contract term obligating Philip Morris to provide the government with most favored customer pricing” nor Philip Morris’s certifications that it complied with that requirement was publicly disclosed, U.S. Circuit Judge Cornelia Pillard wrote for a three-judge panel in Washington.

The ruling overturned a lower court decision and revived a 2008 complaint by Anthony Oliver, the whistle-blower. Oliver claimed Philip Morris, the maker of Marlboro cigarettes. violated the False Claims Act by not giving the Navy, Army and Air Force prices equal to or lower than those charged to other customers.

Philip Morris, based in Richmond, Virginia, didn’t immediately respond to a phone request for comment on the ruling.

The case is U.S. v. Philip Morris USA Inc., 13-7105, U.S. Court of Appeals, District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Joe Schneider, David Glovin

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