Philip Morris Ruling Revives $10.1 Billion Award
Altria Group’s (MO) Philip Morris USA unit is again liable for a $10.1 billion award in a lawsuit accusing it of deceiving smokers about the nature of its light and low-tar tobacco products, an Illinois appeals court ruled.
A three-judge panel yesterday reinstated the 2003 verdict, agreeing with plaintiffs’ lawyer Stephen Tillery that new evidence might have altered the outcome of a case that the state’s top court concluded was barred by law.
About 1.4 million people are represented in the class action filed in 2000, Tillery said yesterday in a phone interview. Yesterday’s ruling may yet be appealed by Philip Morris (PM) and Altria Group and collection of the judgment isn’t imminent, he said.
The case had been lost when the Illinois Supreme Court in 2005 concluded a federal regulator allowed the cigarette company to use the terms “light” and “low tar” in its advertising. Then in 2008, the U.S. Federal Trade Commission said it had never addressed the use of those terms and rescinded its 1966 guidance on tar and nicotine claims that tobacco companies could make in their ads. That allowed the case to be revisited.
Philip Morris USA said in statement it would appeal yesterday’s decision.
The law doesn’t allow an appeals court to reopen a decision by the Illinois Supreme Court “based on speculation about the possible impact of subsequent events on the higher court’s ruling,” Murray Garnick, an associate general counsel for Richmond, Virginia-based Altria, said in the statement.
When Tillery raised the FTC issue in a bid to reopen his case at the trial court, a judge rejected his argument, concluding it was “equally as likely” the state’s top court would have found for Philip Morris on the issue of damages.
In its ruling yesterday, the appeals judges reversed that determination and said its decision “has the effect of reinstating the proceedings with the verdict intact.”
“I’m very happy,” Tillery said. “I’ve been working on this case now for 15 years. I’ve put much of my life and energy into this case. I believe in it, I’ve always believed in it and I’m happy for this ruling, very happy.”
The case is Price v. Philip Morris Inc., 5-13-0017, Appellate Court of Illinois, Fifth District (Mt. Vernon).
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