$10B Altria judgment thrown out in Illinois; Supreme Court says smokers not defrauded
USA Today
December 16, 2005

In a legal victory for tobacco king Philip Morris USA, the Illinois Supreme Court Thursday tossed out a $10 billion judgment against the company, ruling it had not defrauded smokers in its labeling of "light" and "low-tar" cigarettes.

Wall Street approved. The stock price of Altria Group, the parent company of Philip Morris, rose 4% to a record close of $76.62.

Citigroup tobacco analyst Bonnie Herzog wrote to investors that the ruling was "the best-case scenario for Altria and the (tobacco) industry" and would set a precedent.

Philip Morris still faces 38 lawsuits in 23 states on just the "light" cigarette marketing issues, said senior attorney Edward Sweda of the Tobacco Products Liability Project at Northeastern University.

All told, Philip Morris must deal with nearly 3,000 tobacco lawsuits nationwide, according to Altria's SEC filings.

"The ballgame isn't over yet," said Richard Daynard, a law professor and head of the project.

In the largest civil case against Philip Morris, the Florida Supreme Court is reviewing a $145 billion award against the company. Philip Morris also is a defendant in the Justice Department's huge fraud case against the tobacco industry.

In the Illinois case, Philip Morris was accused of consumer fraud and mislabeling its Marlboro Lights and Cambridge Lights cigarettes as having "lower tar and nicotine" than other cigarettes.

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