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Tobacco companies not out of woods even after victory
The Illinois Supreme Court handed the tobacco industry a huge victory Thursday by tossing out a $10.1 billion fraud judgment against Philip Morris USA over the marketing of its "light" cigarettes. But while shares of parent company Altria Group Inc. soared to an all-time high on the news, industry critics warned that the Illinois decision does not insulate U.S. cigarette companies from future lawsuits. There are at least 40 similar suits pending against companies like Philip Morris and Reynolds American, any of which could result in awards into the billions of dollars, tobacco opponents said. "They need to keep their legal teams ready," said Richard Daynard, president of the Boston-based Tobacco Control Resource Center and a longtime industry foe. Philip Morris USA, which makes the popular Marlboro brand and controls about half the U.S. cigarette market, issued only a terse statement saying the Richmond, Va.-based company was "gratified" by Illinois court's decision. Investors were more openly enthusiastic. Shares of New York-based-based Altria Group rose sharply after the court's ruling and by the end of trading, the share price hit $76.62, up $2.89 or 3.9 percent, on the New York Stock Exchange. That surpassed the stock's previous all-time high of $75.60. Shares of Winston-Salem-based Reynolds American, No. 2 in the industry to Altria's Philip Morris rose 55 cents to $97.40 on the NYSE. Earlier in the day, Reynolds American shares flirted with the $100 barrier. The Illinois high court's ruling in Price vs. Philip Morris - the so-called "Price Lights" case - addressed whether Philip Morris acted fraudulently when it labeled some cigarettes as "light" or "low tar and nicotine."
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