$10B Tobacco Verdict Is Tossed Out

The Illinois Supreme Court threw out a $10 billion class-action lawsuit against Altria Group Inc.'s Philip Morris USA division on Thursday, ruling the maker of Marlboros and other brands did not defraud customers in its marketing of "light" cigarettes.

The court reversed the verdict and sent the case back to Madison County court with instruction to dismiss the matter.

A divided state Supreme Court ruled that the Federal Trade Commission specifically allowed companies to characterize their cigarettes as "light" and "low tar," so Philip Morris did not improperly mislead customers about the health impacts of its cigarettes.

The cigarette maker, which accounts for about half of the U.S. cigarette market, argued the case should never have been declared a class-action on behalf of some 1.1 million light cigarette smokers.

The smokers did not accuse the company of harming their health. They claimed Philip Morris knew when it introduced light cigarettes in 1971 that they were no healthier than regular cigarettes, but hid that information and the fact that light cigarettes actually had a more toxic form of tar.

Madison County Judge Nicholas Byron had agreed that Philip Morris misled customers into believing they were buying a less harmful cigarette. In March 2003, he ordered the company to pay $10.1 billion — $5 billion in compensatory damages, $3 billion in punitive damages and $2.1 billion in interest.

Two of the court's seven justices filed written dissents. A third, Chief Justice Robert Thomas, took no part in case because he had a professional relationship with an attorney in the case.