December 15, 2005

Illinois Supreme Court reverses $10.1 billion Altria verdict

CHICAGO (Reuters)- The Illinois Supreme Court on Thursday
reversed a $10.1 billion verdict against Philip Morris USA,
with instructions to dismiss the class action against the unit
of Altria Group Inc.

The ruling in the case, in which Philip Morris was accused
of defrauding customers into thinking "light" cigarettes were
safer than regular smokes, sent Altria shares up more than 5

The case has been closely watched not just because of the
size of the ruling, but because it is one of the legal hurdles
management has said need to be cleared before it executes plans
to spin its Kraft Foods Inc. unit from its tobacco businesses.

The initial $10.1 billion judgment in the class-action case
was handed down against Philip Morris by a trial court judge in
March 2003. The Supreme Court took the unusual step of
bypassing the appellate court and hearing the case on appeal
directly from the trial court.

Oral arguments were heard by the Supreme Court in November
2004. Philip Morris had argued that the case should never have
been certified as a class but should have required each
individual smoker to prove their case separately.