Appeal Loss Slaps Philip Morris for $10.1 Billion
MT. VERNON, Ill. (CN) - An Illinois appeals court revived a $10.1 billion judgment against tobacco giant Philip Morris USA for smokers of light and low-tar cigarettes.
Sharon Price and Michael Fruth filed the class action way back in 2000, and the case made national headlines when Judge Nicholas Byron, now retired from Madison County Circuit Court, awarded them damages totaling $10.1 billion in 2003.
It was the first time a tobacco company lost a consumer-fraud case, according to the St. Louis Post-Dispatch.
The Illinois Supreme Court reversed the judgment in 2005, agreeing with defense arguments that the Federal Trade Commission had authorized the cigarette companies to use words like light and low tar on cigarette packaging and in advertising.
A refusal by the U.S. Supreme Court to review the verdict in 2006 left the case dead in the water.
Two years later, however, in the unrelated case Altria Group Inc. v. Good, the FTC intimated to the high court that it never intended to authorize the use of the low-tar and light terms on cigarette labeling.
The Supreme Court resolved Altria Group on Dec. 15, 2008, a week after the commission rescinded a 1966 guidance concerning representations of tar and nicotine content that cigarette manufacturers could use.
This change led Price and Fruth to petition for relief from judgment, and the case bounced around for a few more years before Judge Dennis Ruth shot them down.
In the latest twist to this 14-year courtroom saga, a three-judge panel of the Fifth District Appellate Court found Tuesday that Ruth exceeded the scope of his review in ruling for Philip Morris.
"We conclude that the trial court exceeded the scope of section 2-1401 review
when it attempted to predict how the supreme court would rule on the question of
damages," Justice Melissa Chapman wrote. "For these reasons, the order denying the petition for relief from judgment must be reversed."
Justices Bruce Stewart and S. Gene Schwarm concurred.
Altria-owned Philip Morris told the Madison County Record that it would seek an immediate review of the ruling. The appellate court's decision is stayed automatically while the review is pending.
"Almost 10 years ago, the Illinois Supreme Court reversed the Price judgment as contrary to Illinois law," Altria Client Services senior vice president and associate general counsel Murray Garnick said told the Record in a statement. "The Fifth District Court of Appeals' decision ... conflicts with that ruling and essentially overrules a decision of a higher court."