Philip Morris Wins Reversal of Verdict; An Illinois court rejects a $10-billion award over the firm's marketing of its 'light' cigarettes
Los Angeles Times
December 16, 2005

Philip Morris USA won a resounding legal victory Thursday when a divided Illinois Supreme Court overturned a $10.1-billion verdict over claims that the company deceptively marketed "light" cigarettes.

In reversing the class-action award, the court did not absolve Philip Morris of the central allegation against it: that Philip Morris had consciously deterred smokers from quitting by falsely promoting "light," or low-tar, cigarettes as safer than regular brands.

Instead, the court ruled 4 to 2 that the company's marketing practices, having been allowed by the Federal Trade Commission, could not be challenged under Illinois' consumer fraud act.

The closely watched decision in Price vs. Philip Morris lofted shares of Altria Group Inc., parent of Philip Morris, and of its two main rivals to record highs. And it moved Altria a step closer to a planned spinoff of Kraft Foods Inc., of which it owns 86.5%. 
 

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"A ruling such as this really harks back to the days when snake-oil salesmen could make any outrageous product claim without fear of being held accountable," said Richard Daynard, associate dean of Northeastern University School of Law and chairman of the Tobacco Products Liability Project, which promotes lawsuits against the industry.

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