The decision in favour of Altria's Philip Morris USA division was a major victory for the tobacco industry, which has been successful in overturning a number of the massive judgments imposed in recent years.
In a 109-page decision, the court dismissed the case on the grounds that the US Federal Trade Commission had specifically authorized tobacco companies to characterize their products as "light" or "low tar and nicotine."
The class-action suit representing 1.4 million smokers was unusual in that
it did not seek damages for physical harm.
Instead, it argued the smokers had been defrauded by the false claim that
the "light" or "low tar" cigarettes promoted at that time were no safer than regular cigarettes and, in fact, could be more harmful.
In March 2003, Madison County Circuit Judge Nicholas Byron ruled against
Philip Morris, fining the company US$7.1 billion in compensatory damages and three billion dollars in punitive damages and fees.
The company argued that it would go bankrupt if it was required to post a
full 12-billion-dollar bond while it appealed the case.
In an unusual move, a number of US states intervened on the tobacco
company's behalf in order to ensure that it continued to make payments to them under the terms of a previous lawsuit settlement.
The state high court agreed to review the case without waiting for appellate courts to weigh in; It heard oral arguments late last year, and its
ruling had been eagerly awaited by Altria investors and detractors alike.
(!--janeb--)