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

The Illinois Supreme Court tossed out a $10 billion judgment against Philip Morris USA, ruling that it had not defrauded smokers by its labeling of “light” and “low-tar” cigarettes.

Philip Morris was accused of consumer fraud for labeling its Marlboro Lights and Cambridge Lights cigarettes as having “lower tar and nicotine” than other cigarettes. The court found in its majority ruling that the Federal Trade Commission had authorized the use of such terms.

The ruling overturned the decision by a Madison County judge who had ordered Philip Morris to pay one million Illinois smokers $10 billion in compensatory and punitive damages plus interest.

Philip Morris still faces 38 lawsuits in 23 states on just the "light" cigarette marketing issues, according to 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, including a $145 billion award against the company, currently being reviewed by the Florida Supreme Court. Philip Morris is also a defendant in the Justice Department’s huge fraud case against the tobacco industry. << back

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