WASHINGTON, D.C. -- The fate of billions of dollars in potential lawsuit damages awards against Big Tobacco over "light cigarettes" now lies with the U.S. Supreme Court.
The USSC agreed last week to review a federal appeals court ruling that a class action fraud suit (Altria v. Good, 07-562) brought by smokers in Maine against Altria Group's Philip Morris USA (PMUSA) could proceed. Plaintiffs claim Philip Morris falsely advertised light cigarettes as containing less tar and nicotine.
More than 30 such suits against Big Tobacco are currently pending in courts around the country, reports note. A federal class action suit pending in New York that claims Big Tobacco violated anti-racketeering laws in promoting light cigarettes could contain up to 60 million smokers,
AP reported.
In probably the best-known lights lawsuit, the Illinois Supreme Court finally struck down last August a $10.1 billion punitive-damages award in a similar class-action against PMUSA,
LNL reported. The Madison County Circuit Court originally granted the award in 2003 on behalf of three million smokers.
Plaintiffs in this suit argue that the USSC has already set a precedent. "Our position is supported by the U.S. Supreme Court ruling in Cipollone v. Liggett Group, where the Court held that when tobacco companies affirmatively lie, they can be sued for fraud in state court," lead counsel Gerard Mantese stated in a
press release.
But financial analysts figure the top bench decision to hear the case bodes ill for the latest decision. A Morgan Stanley analyst wrote that overturning the result and disallowing the suit would sound "the death knell" for other such actions,
Bloomberg reported.