Illinois $10.1B ‘Lights' Judgment Shelved for Now

Class Action Litigation Report® is a one-stop resource for tracking the most important class-action and multi-party litigation across the nation, and across all subjects with particular focus on...

By Martina Barash

Nov. 4 — A $10.1 billion fraud judgment in a class action against Philip Morris Inc. over “light” cigarettes is on hold after the Illinois Supreme Court said a state appeals court was wrong to reinstate it.

Only the state supreme court could revisit its 2005 ruling setting aside the award, the justices said in a 4–2 decision Nov. 4.

The majority opinion, by Justice Anne M. Burke, leaves the door open to the plaintiffs to directly ask the Illinois high court to reconsider its prior ruling in light of later statements by the Federal Trade Commission about the terms “light” or “low tar” in cigarette advertising.

“The court held that the plaintiffs filed the wrong motion in the wrong court,” Murray Garnick, Altria Client Services senior vice president and associate general counsel, said in a statement sent to Bloomberg BNA on behalf of Philip Morris USA, an Altria subsidiary.

“Now to succeed, plaintiffs would have to file a new motion in the Illinois Supreme Court and convince at least four justices to recall their own order,” Garnick said.

“PM USA has been very successful in defending these cases on a variety of legal grounds. In fact, most of these cases have been dismissed prior to trial,” he said.

Attempts to reach attorneys for the plaintiffs weren't successful.

But Edward L. Sweda of the Tobacco Products Liability Project of Northeastern University School of Law's Public Health Advocacy Institute, which supports tobacco control efforts, stressed the procedural nature of the ruling in an e-mail to Bloomberg BNA Nov. 4.

“Today's ruling by the Illinois Supreme Court is procedural rather than substantive,” Sweda said. “While it adds many more months of delay to this case, there still remains an avenue for the plaintiffs to achieve ultimate justice regarding Philip Morris’ ‘light' cigarettes fraud on the public.”

Justice Charles E. Freeman, in dissent, argued that the Illinois Code of Civil Procedure permitted the petition and the appellate-court result.

FTC Role

The Illinois Supreme Court in 2005 threw out the massive judgment from the Madison County Circuit Court stemming from claims that Philip Morris misled consumers about the safety of “light” or “low tar” cigarettes. The high court said federal regulators allowed the use of the terms “light” and “low tar” in advertising.

But in 2008, after that review, the FTC filed a friend-of-the-court brief in Altria Group, Inc. v. Good, 555 U.S. 70 (2008) . The FTC denied it had authorized cigarette makers to use the terms, the plaintiffs here argued in a petition for relief from the Illinois Supreme Court's judgment.

They filed that petition in 2008 in the Madison County trial court.

The trial court considered the merits and decided against the plaintiffs, Sharon Price and Michael Fruth, and the certified class.

The Illinois Appeals Court, Fifth District, ruled in April 2014 that the FTC statements constituted grounds to reinstate the $10.1 billion judgment and it did so (15 CLASS 505, 5/9/14).

Philip Morris appealed to the state supreme court.

But here the Illinois Supreme Court said the intermediate court didn't have the authority to reinstate the judgment thrown out by the top court. Only the top court could reinstate the ruling, it said.

“Section 2 -1401 does not permit an on-the-merits challenge to a dismissal order entered at the direction of a reviewing court because such a challenge is necessarily directed to the judgment rendered by the reviewing court,” the court said.

The relevant section of the civil procedure code “gives authority to the circuit court to grant relief from a judgment, i.e., to vacate it and render it without legal effect,” the supreme court majority said.

“Under our constitutional scheme, the circuit court cannot possess that power over a reviewing court's judgment,” the high court said.

Korein Tillery LLC represented the plaintiffs.

Mayer Brown LLP, Winston Strawn LLP, Arnold & Porter LLP and HeplerBroom LLC represented Philip Morris.

To contact the reporter on this story: Martina S. Barash in Washington at mbarash@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

For More Information 
The opinion is available at http://src.bna.com/U9.