Illinois Appeals Court Reinstates $10 Billion ‘Light’ Cigarettes Verdict

MOUNT VERNON, Ill. — (Mealey’s) A $10.1 billion consumer fraud verdict stemming from Philip Morris USA Inc.’s marketing of “light” cigarettes was reinstated April 29 by Illinois' Fifth District Appellate Court (Sharon Price, et al. v. Philip Morris Inc., No. 5-13-0017, Ill. App., 5th Dist. [enhanced opinion available to lexis.com subscribers]). 

At issue was whether the Federal Trade Commission had authorized the terms “light, low, or reduced” in cigarette marketing.  A 2008 U.S. Supreme Court decision that the FTC had not authorized those terms had the effect of overturning an earlier Illinois Supreme Court decision that it had, but the trial court rejected the plaintiffs’ motion to reopen the case, saying it was “equally as likely” the state’s high court would have found for Philip Morris on the issue of damages. 

The appeals panel reversed, saying its decision “has the effect of reinstating the proceedings with the verdict intact.” 

Did Not Analyze  

“[The Illinois] supreme court did not analyze, much less resolve, the question of whether the plaintiffs offered sufficient proof of the damages they alleged,” the panel said.  “After concluding that the case should have been dismissed pursuant to section 10b(1) [of the Illinois Consumer Fraud Act], the court  noted, ‘Several of the other issues raised in this appeal are of great importance and deserving of consideration by this court in the proper case.’  The court went on to discuss several reasons it questioned whether class certification was appropriate, although the court did not resolve any of these questions.” 

“In addition, we reiterate the fact that two justices specifically rejected the notion that the plaintiffs failed to prove damages,” the panel said.  “Thus, contrary to the defendant's assertion, 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.”  

In a press release posted April 29 on its website, Philip Morris said it will appeal the decision. 

“The law does not allow the Fifth District to reopen a decision by the Illinois Supreme Court based on speculation about the possible impact of subsequent events on the higher court’s ruling,” Murray Garnick, Altria Client Services senior vice president and associate general counsel, said. 

Deceptive Advertising 

Sharon Price and Michael Fruth filed a class action lawsuit against Philip Morris in the Madison County Circuit Court, alleging that they were harmed by deceptive advertising for light cigarettes.  After a two-month trial in 2003, a jury awarded $10.1 billion in compensatory and punitive damages. 

On direct appeal, the Illinois Supreme Court in 2005 reversed the judgment, finding that the Federal Trade Commission authorized the use of “light, low or reduced” in cigarette descriptions.  The case was dismissed by the trial court in 2006. 

In 2008, however, the U.S. Supreme Court ruled in a similar case that the FTC never authorized those terms.  Price and Fruth petitioned the trial court for a new hearing, but the court dismissed the petition. 

Reversed 

On Feb. 24, 2011, the Fifth District Appellate Court reversed the trial court's dismissal, rejecting Phillip Morris' argument that the appeal was untimely because it was not filed within two years of the Illinois Supreme Court's 2005 decision.  The appeals court said the plaintiffs had two years after the trial court dismissed the case. 

Philip Morris appealed to the Illinois Supreme Court, arguing that the appeal was filed too late and that the U.S. Supreme Court ruling could not be applied to the Price/Fruth case. 

The Illinois Supreme Court in September 2011 declined to hear Philip Morris' appeal of the intermediate appeals court ruling reopening the case (Sharon Price, et al. v. Philip Morris Incorporated, No. 112067, Ill. Sup.).  The case then went back to the Madison County Third Judicial Circuit Court, where Judge Dennis R. Ruth issued the dismissal on appeal here (Sharon Price, et al. v. Philip Morris Incorporated, No. 00-L-112, Ill. Cir., 3rd Judicial Cir., Madison Co.). 

The opinion is by Justice Melissa A. Chapman, with Justices Bruce D. Stewart and S. Gene Schwarm concurring. 

Plaintiffs are represented by Stephen M. Tillery and Robert L. King of Korein Tillery in St. Louis; Georga A. Zelcs, Maximilian C. Gibbons and Matthew C. Davies of Korein Tillery in Chicago; Joseph A. Power Jr. of Power, Rogers & Smith in Chicago; Nina Hunter Fields of Richardson, Patrick, Westbrook & Brickman in Mount Pleasant, S.C.; and Michael J. Brickman of Richardson, Patrick, Westbrook & Brickman in Charleston, S.C. 

Philip Morris is represented by George C. Lombardi of Winston & Strawn in Chicago, Larry Hepler of HeplerBroom in Edwardsville, Ill., Michelle Odorizzi of Mayer Brown Chicago and Kevin M. Forde of Chicago.

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