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2 Tobacco Firms Must Face Missouri Class-Action Suits

Ruling on two separate cases by state judge pits Philip Morris, Reynolds against smokers who say they were misled about risks of 'light' cigarettes.

January 07, 2004|From Bloomberg News

Philip Morris USA and R.J. Reynolds Tobacco Holdings Inc., the two largest U.S. cigarette makers, must face class-action lawsuits brought by Missouri smokers who claim they were misled about the health risks of "light" cigarettes, a state judge decided.

Judge Michael David in St. Louis last week certified the two separate lawsuits, allowing the plaintiffs to represent thousands of other smokers. Similar lawsuits over light cigarettes, which are designed to have less tar and nicotine, have been filed in at least 11 other states.

"This increases the chances" of those others being certified, said Richard Daynard, a Northeastern University law professor and anti-smoking activist. "If a judge does look at the merits of these cases, they will likely agree with the judge in this case."

Class certification gives the Missouri smokers an opportunity to seek a substantial verdict against the tobacco companies. In March 2002, an Illinois judge ordered Philip Morris to pay $10.1 billion for defrauding light-cigarette smokers. The company, a unit of Altria Group Inc., has appealed, claiming the award would force it into bankruptcy and jeopardize billions of dollars in payments to state governments under a 1998 settlement.

Unlike the Illinois case in which Philip Morris had to post a $6.8-billion bond in order to appeal, Missouri law only requires a defendant to post $50 million to appeal an award.

William Ohlemeyer, a Philip Morris vice president and associate general counsel, said the company was studying the Missouri ruling "with an intent to seek further review."

In addition to the light-cigarette cases in Illinois and Missouri, a suit by Ohio smokers has been certified as a class action. The Ohio case is limited to plaintiffs from six of the state's counties.

A similar class lawsuit in Florida was decertified last week by a state appeals court, which said the smoker plaintiffs were too diverse to be grouped together.

"This certification clearly runs counter to recent court actions maintaining that the differences in the plaintiffs predominate over the similarities in these cases and thus they are not appropriate for class-action" status, said R.J. Reynolds spokeswoman Ellen Matthews.

Attorneys for the Missouri smokers couldn't immediately be reached for comment.

Shares of New York-based Altria fell 41 cents to $53.83 on the New York Stock Exchange. Shares of Winston-Salem, N.C.-based R.J. Reynolds, the No. 2 U.S. cigarette maker after Philip Morris, fell 91 cents to $57.79.

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