Light Cigarettes Not So Light On Altria's Pocketbook

By Sam Bakken in News on Nov 10, 2004 9:20PM

Today Altria, makers of kid-friendly boxed cigarettes (via Philip Morris USA), dinners (via KRAFT), cereal, crackers and cookies (via Nabisco), tried, through oral arguments, to convince the Illinois State Supreme Court to overturn a $10.1 ruling against them handed down by a judge last year.

The crux of the case is whether or not Philip Morris USA misled smokers by saying their Marlboro Light and Cambridge Light cigarettes were safer than "regular" strength cigarettes. Last year, Madison County Judge Nicholas Byron, the aforementioned, ruled that indeed they did. His ruling ordered Phillip Morris to pay $7.1 billion to 1.1 million Illinoisan smokers of Philip Morris' light brands and $3 billion in punitive damages to the state. That's the most expensive ruling in state history. Because it was such a controversial case Philip Morris skipped the immediate appellate court and went straight to the state Supreme Court.

Plaintiffs in the class-action suit claimed that Philip has misled smokers since 1970 with their introduction of light cigarettes as a safer alternative to regular cigarettes. The basis of Philip's appeal is that the suit shouldn't have been tried as a class-action because each individual case is different and some of the individuals could have actually received less tar and nicotine through light cigarettes. The lawyer for Philip, former governor of Illinois James Thompson, also said in court that many of the smokers may have received more tar and nicotine from smoking more light cigarettes than they would have had they smoked regulars. He said the company could not be blamed for this and that if they were, it would "turn the law on its head in this state and leave no manufacturer safe." Philip has said the word "light" refers to the flavor of the cigarettes.

The Illinois Supreme Court is not expected to rule on the suit for several months. If they do uphold the lower court's ruling it really could spell trouble for Altria. They're currently involved in two other expensive suits, including one in Florida ordering them to pay $145 billion. Altria said the rulings in these appeals will have a lot to do with whether or not they follow through on a plan to get rid of their KRAFT shares.