Appeals court holds Philip Morris once again liable for $10.1 billion award

An appeals court agreed with the plaintiffs that FTC claims should be taken into account

The back and forth over Philip Morris’s $10.1 billion award over deceiving customers has reared its head once again, and this time, it’s the class action plaintiffs that have the upper hand.

An Illinois appeals court ruled on April 29 that Altria Group’s (MO) Philip Morris USA unit is once again liable for the $10.1 billion verdict originally awarded to a class action group of smokers in 2003. That group claimed Philip Morris knowingly deceived customers about the nature of its light and low-tar tobacco products.

According to the appeals court, new evidence not permissible by the court might have altered the outcome of the case. The Illinois Supreme Court ruled in favor of Philip Morris in 2005, saying that a federal regulator allowed the company to use the “low tar” and “light” terms in advertising. However, the Federal Trade Commission answered that it had never actually made that ruling, and the commission also rescinded its 1966 guidance on tar and nicotine claims.

When plaintiffs’ lawyer Stephen Tillery attempted to reopen the case in trial court given this new evidence, the judge ruled that the case would not be reopened, given that it was “equally as likely” that the Illinois Supreme Court would rule in Philip Morris’s favor. However, the appeals court disagreed, and also said that its decision “has the effect of reinstating the proceedings with the verdict intact.”

The class action of 1.4 million people won’t be collecting its reward quite yet, though. The ruling may still be appealed by Philip Morris and Altria Group, and Philip Morris USA said in a statement that it plans to do so. It seems that the defendants will appeal that the appeals court had no right to hear the case, as Altria associate general counsel Murray Garnick said in a statement that an appeals court cannot reopen a decision by the Illinois Supreme Court “based on speculation about the possible impact of subsequent events on the higher court’s ruling.”

 

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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