Illinois tobacco case may head to Supreme Court

By Jessica Wohl

CHICAGO (Reuters) – The Illinois Supreme Court declined on
Friday to rehear a case in which it previously threw out a
$10.1 billion verdict against Philip Morris USA and an attorney
for the plaintiffs in the class action vowed to appeal to the
U.S. Supreme Court.

“We thought at the very minimum that they would refer it to
the Federal Trade Commission and we are stunned that they
didn’t,” Stephen Tillery, an attorney for the plaintiffs, told
Reuters.

“I would hope that the U.S. Supreme Court, when they read
this opinion, would see how far off base it is,” Tillery said.

The initial $10.1 billion judgment in the class action
case, in which the Altria Group Inc. unit was accused of
defrauding consumers into thinking “light” cigarettes were
safer than regular smokes, was handed down against Philip
Morris by a trial court judge in March 2003.

The Illinois Supreme Court first overturned the verdict in
December and ordered a lower court to dismiss the case. A
divided court ruled at that time that the U.S. Federal Trade
Commission had authorized tobacco companies to characterize
their products as “light” or “low tar nicotine.”

The court said a section in the Illinois Consumer Fraud Act
exempts a company from being punished for behavior allowed by a
specific regulatory body.

The same court split again in its ruling not to rehear the
case on Friday.

In his dissenting opinion, Justice Charles Freeman wrote he
believes “that this court’s judgment may have been erroneous.”

“The court’s denial of the petition for rehearing does not
speak well of this court. It is disappointing and will
ultimately prove to be embarrassing. History will be the
judge,” Freeman wrote.

Justice Thomas Kilbride joined in the dissent.

The “lights” 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 could
spin off Altria’s Kraft Foods Inc. business from its tobacco
business.

“PM USA is pleased with the decision which reaffirms the
Illinois Supreme Court’s earlier ruling,” said William
Ohlemeyer, vice president and associate general counsel for
Altria.

Analysts have said in the past it was unlikely the Illinois
Supreme Court would rehear the case. But filing for a rehearing
in state court is a standard step before trying to bring a case
before the U.S. Supreme Court.

Altria shares were up 39 cents to $74.04 after rising to
$74.39 in New York Stock Exchange trading after the court
denied the petition for rehearing.