What's around the bend in Price v. Philip Morris?
In the wake of last week's dismissal of the $10.1 billion Madison County judgment against the cigarette maker, the next potential move lies with the plaintiff.
Price, represented by St. Louis attorney Stephen Tillery, has until Nov. 25 to petition the Supreme Court for a rehearing of its Nov. 4 decision.
If a petition for rehearing is not filed, the Supreme Court mandate - reversing the Fifth District Appellate Court on its decision to reinstate what the high court previously struck down - will issue on Dec. 9.
And even though the Supreme Court overturned the Fifth District by a 4-2 margin, Justices did not shut down the 15 year old action that awarded huge damages to a class of smokers who claimed the tobacco company misled smokers into believing cigarettes marketed as “light” were actually safer to smoke than regular cigarettes.
Instead, the court invited a direct petition to recall a mandate they issued in favor of Philip Morris in 2006, without expressing opinion on the merits of doing so.
Justice Anne Burke wrote for the majority that under the state's hierarchical judicial system, only the Supreme Court can overrule and modify previous rulings it has made.
“The appellate court therefore attempted to act as a superior court to this one,” Burke wrote. “This is plainly incorrect.”
According to attorney Michael Resis, who authored an amicus brief for the Illinois Association of Defense Counsel in support of Philip Morris, the high court's decision to reverse was "soundly based" and on the narrowest of grounds.
Resis, partner at SmithAmundsen in Chicago, wrote in the amicus brief that FTC statements made in 2008, which formed the basis of Tillery's argument to re-open the case, did not qualify as "newly discovered evidence" because they did not exist at the time of trial in 2003 and therefore could not have been presented as evidence for the trial court's consideration; and further that the statements would not have precluded the outcome on appeal to the Supreme Court in its first ruling in Price.
Resis said that in last week's decision, the high court found that the plaintiff could not proceed without first coming to the Supreme Court.
"The plaintiff did not follow that procedure," he said.
Resis said that Supreme Court rules do not establish any time frame by which a petition to recall a mandate must be made.
"The plaintiff has not been foreclosed from doing so," he said.
Conceivably, he said, a petition to recall the Supreme Court's 2006 mandate vacating the judgment could be made tomorrow.
But could it be 20 years from now?
According to Resis, the longer time passes for such a petition, the harder it would be to lay out a meritorious case on good grounds,
"If it's nine years, it may be too little too late," he said.
Another legal observer who has been critical of class action litigation said he was not surprised by last week's Supreme Court decision.
"The attempt to re-litigate a lost suit and ask an inferior court to overrule a superior court was plainly, procedurally abusive," said Ted Frank, founder of the Center for Class Action Fairness.
"The scandal was that any judge countenanced this at all."
The long and winding road
The Illinois Supreme Court's Nov. 4 ruling comes as the latest decision in the continuing saga surrounding the high stakes litigation that began in 2000 when the smokers, through named plaintiff Sharon Price, first filed suit in Madison County Circuit Court against Philip Morris over the light cigarettes marketing claims. Rather than asserting the cigarettes caused adverse health effects, the smokers simply asserted Philip Morris’s alleged marketing claims violated the state’s consumer fraud laws, as the cigarettes did not deliver the benefits the smokers alleged were promised.
In 2003, at a bench trial before Circuit Judge Nicholas Byron, the trial court awarded damages worth $7 billion to a class of more than 1 million people, plus $3 billion to the state of Illinois.
Tillery's legal team was awarded $1.7 billion in fees.
The judgment was appealed directly to the Illinois Supreme Court, which in 2005 overturned Byron, finding the FTC “had ‘specifically authorized’ defendant’s (Philip Morris’) use of the descriptors ‘light’ and ‘lowered tar and nicotine,’ thereby barring plaintiffs’ complaint.” In supporting this decision, the state high court pointed to a 1971 FTC consent order, reiterated in 1995, which appeared to authorize the use of such terms in marketing light cigarettes.
But the Fifth District last year agreed with Tillery, who moved to reopen the case and reinstate the $10 billion judgment by focusing on a brief filed in 2008 by the FTC with the U.S. Supreme Court in a different case, in which the FTC appeared to indicate “it had not authorized cigarette companies to use” the descriptors at the heart of the case.
Tillery argued the brief was “new evidence” that required the courts to take another look at the case under section 2-1401 of the Illinois Code of Civil Procedure.
A Madison County Circuit Court took up the matter, but ruled the “new evidence” wasn’t enough to find the Illinois Supreme Court would have ruled any differently.
On appeal, however, the Fifth District Appellate Court said the 2008 FTC brief contained enough “direct statements” concerning the FTC’s actual intentions to conclude “it was ‘easy to see’ how the (state Supreme) Court’s analysis ‘would have been changed.’”
The appellate court panel led by Justice Melissa Chapman applied the rationale to “restore the parties to the status quo” before Philip Morris first appealed the 2003 judgment, effectively reinstating the $10 billion award. Justices Bruce Stewart and Gene Schwarm concurred with Chapman in the 3-0 decision reached in May 2014.
Jonathan Bilyk contributed to this report.