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$10B Philip Morris Cigarette Class Action Settlement

The Fifth District Court of Appeals in Illinois ruled in late April to overturn a lower court’s decision and reinstate a $10 billion class action settlement against Philip Morris USA Inc. over allegations it deceptively marketed its Marlboro Lights cigarettes as safer than regular ones.

The Philip Morris class action settlement is part of long-running litigation against the cigarette maker that was spearheaded by plaintiffs Sharon Price and Michael Fruth. They allege in the Philip Morris class action lawsuit that the company violated the Illinois Consumer Fraud and Deceptive Business Practices Act by advertising its Marlboro Lights cigarettes as “light” or “low tar.” The plaintiffs purported to represent all Illinois residents since 1971 who purchased Philip Morris’s light or low tar cigarettes under the impression they were healthier.

On March 21, 2003, the court entered a $10.1 billion class action settlement in favor of the plaintiffs; however, in 2005, the Supreme Court of Illinois reversed that judgment, finding that the Consumer Fraud Act barred the plaintiffs’ action because, the court said, Philip Morris’s actions were specifically authorized by the Federal Trade Commission through a process of “informal regulatory activity,” including the use of consent decrees. The Supreme Court of Illinois remanded the case to the trial court with instructions to dismiss the Philip Morris cigarette class action lawsuit.

At this point, the plaintiffs filed a petition to reverse the Supreme Court of Illinois decision, alleging that evidence unavailable to the plaintiffs at trial showed that the FTC never authorized use of the terms “light” and “low tar,” and had the plaintiffs been able to present this evidence, the result would have been different.

The trial court found that the plaintiffs had a meritorious claim, and acted with due diligence both in attempting to present that claim at trial and in filing their petition; however, the court also determined that it was “equally likely” that the supreme court would have reversed on other grounds had it ruled differently. The plaintiffs appealed the trial court’s, arguing that the trial court exceeded the scope of its review but ruled correctly on all other issues.

Court of Appeals agrees with plaintiffs

The three judge panel of the Court of Appeals in Illinois agreed with the plaintiffs and reversed the trial court’s ruling. In their April 29 decision, the judges pointed out “[i]t is important to note that there is a key distinction … between the question actually decided by the supreme court and those left unresolved.”

“The question of the applicability of the section 10b(1) was decided by the supreme court in a lengthy opinion in which the court provided a detailed rationale for that decision,” said the court. “Therefore, we know the basis of its decision on that question.”

“In contrast,” stated the court, “the supreme court did not analyze, much less resolve, the question of whether the plaintiffs offered sufficient proof of the damages they alleged.”

“The trial court’s discussion of what the supreme court would have decided had it addressed those issues is inherently speculative in a way its discussion of the impact of the new information on the issue it actually did decide is not,” concluded the appellate court.

The appellate court’s decision to reinstate the Philip Morris cigarette class action settlement is huge news for plaintiffs involved in similar class action lawsuits against the company. Philip Morris has been fighting multiple cigarette false advertising class action lawsuits filed across the country.

In March, an Ohio judge denied certification to a Marlboro Lights class action lawsuit accusing Philip Morris of deceptively marketing the cigarettes as healthier than regular cigarettes. A similar Marlboro Lights class action lawsuit was denied certification in January by a Hawaii federal judge. Other cigarette class action lawsuits have been filed in Arkansas, Missouri, and Minnesota.

Plaintiffs in the Price v. Philip Morris class action lawsuit are represented by Stephen M. Tillery, Robert L. King, George A. Zelcs, Maximilian C. Gibbons and Matthew C. Davies of Korein Tillery LLC, Joseph A. Power Jr. of Power Rogers & Smith PC and Nina Hunter Fields and Michael J. Brickman of Richardson Patrick Westbrook & Brickman LLC.

The Philip Morris Light Cigarettes Class Action Lawsuit is Sharon Price, et al. v. Philip Morris Inc., Case No. 5-13-0017, in the Appellate Court of Illinois, Fifth District.

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