Philip Morris cleared of $10.1 billion verdict

By Ann Knef | Dec 15, 2005

Circuit Judge Nicholas Byron

The marketing of "light" cigarettes is not hazardous to the health of the largest U.S. tobacco company: the Illinois Supreme Court has overturned a $10.1 billion Madison County bench verdict, Price v. Philip Morris.

In a 4-2 decision announced Thursday, the court grounded its decision on a section of the Illinois Consumer Fraud Act, which exempts conduct allowed by U.S. regulatory bodies.

The court held that the Federal Trade Commission authorized tobacco companies to characterize cigarettes as "light" or "low tar and nicotine."

Madison County Circuit Judge Nicholas Byron issued the verdict in 2003, citing the defendant duped smokers into believing light cigarettes were safer than regular ones.

Byron called the conduct "outrageous and evil."

Contacted by phone this morning, Byron told a reporter to "have a nice day," and then hung up.

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 a concurring opinion, Justice Lloyd Karmeier wrote, "Plaintiffs' consumer fraud claim is fatally infirm for an additional and more basic reason: plaintiffs failed to establish that they sustained actual damages.

"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."

Click here to read the Illinois Supreme Court's opinion in full.

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