Illinois Court Throws Out Tobacco Verdict
Illinois Court Throws Out Tobacco Verdict The Illinois Supreme Court overturns a $10.1 billion verdict against Philip Morris USA. Plaintiffs in the class-action case claim the tobacco giant defrauded them by suggesting in its advertising that "low-tar" cigarettes were less hazardous than higher-tar brands.
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Cigarette giant Philip Morris won a major victory today when the Illinois Supreme Court threw out a $10 billion judgment against the company. The justices also ordered a lower court to dismiss the class-action lawsuit which accused the cigarette maker of fraud. NPR's Cheryl Corley reports.
CHERYL CORLEY reporting:
More than a million Illinois smokers and former smokers represented in the lawsuit had accused Philip Morris USA of hiding information and using ads to hoodwink customers into thinking that two of its brands, Marlboro Lights and Cambridge Lights, were less harmful than the company's regular cigarettes. The consumers did not accuse Philip Morris of harming their health, but they asked the court to reimburse them for the cost of the cigarettes they had purchased over several years.
In a 4-to-2 decision, the Illinois Supreme Court rejected the argument and it reversed the lower court's $10 billion verdict. Dawn Schneider, a spokeswoman for Philip Morris, read the company's short statement.
Ms. DAWN SCHNEIDER (Spokesperson, Philip Morris): Philip Morris USA is gratified by today's Illinois Supreme Court decision in the Price case.
CORLEY: Attorney Joe Power, who argued for the plaintiffs, was just as succinct.
Mr. JOE POWER (Attorney): It's ludicrous. It's absolutely ludicrous.
CORLEY: The court ruled that Philip Morris had followed the Federal Trade Commission's guidelines about how so-called light cigarettes could be marketed, that it could use words like low or reduced or light as long as those descriptions were accompanied by a very clear and conspicuous disclosure of how much tar and nicotine each cigarette contained. Joe Power had a different view and argued there were no FTC regulations about how light cigarettes should be described.
Mr. POWER: Frankly, they didn't do anything in respect to it except they didn't stop it. That's it. So to allow basic inactivity by the FTC to be a complete defense to fraud is astounding in my opinion.
CORLEY: Power says it's possible, but no decision had been made yet on whether to appeal the case to the US Supreme Court. But Harold Krent, the dean at Chicago-Kent College of Law, says the Illinois ruling almost lays the issue in the high court's lap since it was based on FTC decisions about marketing and not state law. Krent says, as a result, he doesn't expect to see much change in how light cigarettes are marketed.
Mr. HAROLD KRENT (Dean, Chicago-Kent College of Law): Certainly, Philip Morris is free to continue saying something is a light cigarette and marketing that, at least until the FTC acts. And this may prompt the FTC to take some action, specifically with respect to light cigarettes.
CORLEY: This was a long anticipated verdict. The chairman of Altria Group, Philip Morris' parent company, said the lawsuit was a major obstacle in its plans to spin off one of its other units, Kraft Foods, from its tobacco concerns.
The ruling means Altria has one less legal challenge it must face. Today the market rewarded the company by pushing Altria shares up. But the battle over light cigarettes is not over. Lawsuits similar to the Illinois case have been filed in other states. Richard Daynard, a Northeastern University law professor and tobacco foe, says today's ruling won't shut those cases down.
Professor RICHARD DAYNARD (Northeastern University): That's a good thing because nobody really doubted, even in the--all of the opinions issued by the different justices in the Illinois Supreme Court this morning, that there was a scam here to scam consumers, make them think that a product was less dangerous than it really was.
CORLEY: Philip Morris says there was no scam, that it was possible for smokers to get lighter flavor and less tar and nicotine in their light brands. They argue the smokers sometimes took deeper puffs or smoked more of the light brand cigarettes, negating any health benefits. Cheryl Corley, NPR News, Chicago.
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