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County Is Known as Friendly to Tort Suits

Philip Morris and business groups slam a $10.1-billion verdict in Madison County, Ill.

March 25, 2003|Myron Levin and Stephanie Simon | Times Staff Writers

EDWARDSVILLE, Ill. — Madison County, Ill., proudly bills itself "the horseradish capital of the world" for the spicy root that grows along the Mississippi River bottoms.

Business groups have harsher names for it, such as "judicial hellhole."

Last week, a Madison County circuit judge slammed tobacco giant Philip Morris USA with a damage award of $10.1 billion in the first class-action case to focus on the marketing of low-tar cigarettes. But even before the verdict, the semirural county near St. Louis had an image as hostile territory for businesses defending class-action suits.

On Monday, the American Tort Reform Assn., which had named Madison County one of 11 "judicial hellholes" -- along with Los Angeles, San Francisco and Alameda counties -- said the giant verdict confirmed the county's place on the list.

Other groups also savaged the verdict, including the U.S. Chamber of Commerce and National Assn. of Manufacturers, which called Madison County "the epicenter of class-action filings in America."

Indeed, in a few short years, the county of 260,000 residents has gained a distinctive niche in the world of high-stakes civil litigation. There were only two class-action filings here in 1998, but 43 in 2001, according to a survey by O'Melveny & Myers, a defender of class-action suits. Only two venues -- Los Angeles County and Cook County, Ill. -- have attracted more class-action suits, the survey found.

Plaintiffs' lawyers typically can choose to file class actions wherever they wish, as long as some of the alleged victims reside there. Madison County has become a preferred venue, observers say, because judges there seem more inclined to certify cases as class actions.

Madison County "has developed a reputation as a paradise for plaintiffs," said Mike Lawrence, associate director of the Public Policy Institute at Southern Illinois University. "There are some powerful plaintiffs' lawyers" in the area, "and a lot of them are powerful politically," he said.

The area also has a working-class history, and "there's a sense that juries here are more friendly to the little guy," Lawrence said.

After a nearly two-month trial, Friday's 51-page ruling by Circuit Judge Nicholas G. Byron was unique in several ways. Nearly all class actions filed in Madison County have been settled out of court, and legal observers said the Philip Morris case was the first to be tried to a verdict.

Byron ordered the top U.S. cigarette maker to pay $7.1 billion in compensatory damages -- nearly $7,000 apiece -- to 1.1 million Illinois consumers to reimburse them for purchases of Marlboro Lights and Cambridge Lights cigarettes in recent decades. He also ordered it to pay $3 billion in punitive damages to Illinois and earmarked $1.75 billion for attorneys' fees.

Byron ruled that Philip Morris had misled "light" smokers by falsely suggesting that the brands would deliver less tar and be less harmful. Smokers of "lights" usually compensate by smoking more and inhaling deeper to get their full nicotine dose, thus negating any benefits, he said.

And the ruling was the first to declare that light cigarettes are more dangerous than regular brands. Byron said he was convinced of this by evidence that levels of many harmful compounds in smoke from light cigarettes are actually higher than in regular brands -- apparently because the ventilated filters cause less complete burning of toxins in the smoke.

Philip Morris blasted the decision and said it would appeal.

In Illinois, state judges are elected, and last year tort reform groups in the state charged that Madison County judges have received disproportionate financial support from plaintiffs' attorneys.

Despite running for reelection unopposed last fall, Byron received about $70,000 in campaign donations. Included were contributions from lawyers on both sides of the Philip Morris case, though the plaintiffs' attorneys gave more.

According to campaign records, at least 13 lawyers or family members of the lead plaintiffs' firm, Carr, Korein, Tillery of St. Louis, paid $500 apiece last year for tickets to a campaign fund-raiser for Byron. At least three lawyers from Burroughs, Hepler, Broom, MacDonald, Hebrank & True, the firm that represented Philip Morris, also bought tickets.

Byron could not be reached for comment Monday. Lead plaintiffs' lawyer Stephen Tillery said Byron had been fair and should not be blamed for the fact that Illinois picks judges through elections.

The verdict sent tremors through the industry. Nearly identical class actions are pending in 11 states against Philip Morris and its two nearest rivals., R.J. Reynolds Tobacco Co. and Brown & Williamson Tobacco Corp. RJR and B&W also face trials in Madison County.

Philip Morris now faces the immediate problem of finding a way to post or modify the $12-billion appeal bond set in the judge's order. On Monday, credit-rating firm Fitch Ratings put Altria Group Inc., parent of Philip Morris, on a credit watch because of the burden of posting the appeal bond.

On a down day on Wall Street, Altria and RJR shares fell more sharply than the market as a whole. On the New York Stock Exchange, Altria declined $1.45 to $33.59, and RJR dropped $1.78 to $34.72.

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Levin reported from Los Angeles and Simon from Edwardsville.

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