Philip Morris to get $2.15 billion back from Madison County

Steve Gonzalez Jun. 19, 2006, 12:40pm

Philip Morris will get back $2.15 billion of its appeal bond from the infamous Madison County Price v. Philip Morris USA case that was overturned late last year by the Illinois Supreme Court. And, if the U.S. Supreme Court declines to hear an appeal, another $6 billion will be returned to the tobacco giant.

According to an order issued Monday by the Illinois Supreme Court, Philip Morris' obligations to deposit payments on the bond and payments for administrative fees to the Madison County Circuit Clerk's office also have officially ended.

On Dec. 15, 2005, the Illinois Supreme Court threw out the $10.1 billion consumer fraud judgment against Philip Morris, finding that the Federal Trade Commission allowed companies to characterize cigarettes as "light" and "low tar," and as a result, Philip Morris could not be held liable under state law even if the terms they used could be found false or misleading.

Madison County Circuit Judge Nicholas Byron issued the bench verdict in 2003, citing Philip Morris duped smokers into believing light cigarettes were safer than regular ones. The case ostensibly put Madison County's judicial system on the map.

According to Madison County Chairman Alan Dunstan in his State of the County address in April, the county has earned $13.6 million on interest from the tobacco bond payments.

On May 5, the Illinois Supreme Court announced that it would not rehear Price v. Philip Morris. Justices Charles Freeman and Thomas Kilbride dissented in a 4-2 decision. Justice Robert Thomas abstained.

The U.S. Supreme Court also refused to hear the case in which plaintiffs alleged they were dupued into believing "light" cigarettes were safer than regular ones.

After the class action lawsuit was overturned by the Illinois Supreme Dec. 15 by a 4-2 vote, plaintiff's attorney Stephen Tillery filed a motion to reconsider the verdict.

The class action lawsuit was brought by lead plaintiff Sharon Price, an East Alton police dispatcher. She claimed she started smoking in 1966 and switched to Cambridge Lights in 1986.

Plaintiffs presented evidence that "light" or "low tar" cigarettes promoted at that time were no safer than regular cigarettes and, in fact, could be more harmful. They also presented evidence that defendant was aware of this.

The court awarded the estimated 1.14 million members of the plaintiff class compensatory and punitive damages, attorney fees, and prejudgment interest totaling $10.1 billion.

In the landmark decision overturning the case last December, Justice Lloyd Karmeier wrote the opinion. "Plaintiffs' consumer fraud claim is fatally infirm for an additional and more basic reason: plaintiffs failed to establish that they sustained actual damages," Karmeier wrote.

"The requirement of actual damages means that the plaintiff must have been harmed in a concrete, ascertainable way. That is, the defendant's deception must have affected the plaintiff in way that made him or her tangibly worse off. Theoretical harm is insufficient. Damages may not be predicated on mere speculation, hypothesis, conjecture or whim.

"The losses for which plaintiffs seek compensation are purely economic. Their claim is simply that they did not receive what they bargained for. They paid for health benefits they did not get."

In a dissenting opinion, Justice Charles Freeman wrote, "Today marks the second time in just six months that this court has completely reversed a multibillion dollar verdict in favor of a corporate defendant."

"The manner in which these two, highly publicized cases have been decided by this court leads me to several troubling conclusions."

"There is little doubt in my mind that these decisions will send a chill wind over consumer protection. That said, I am not blind to the very real problems that exist in the world of class action lawsuits."

Ann Knef contributed to this report

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