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New Judge Adds Uncertainty to Philip Morris Suit

CHICAGO -- The election of a new judge to the Illinois state Supreme Court added another element of uncertainty to a widely watched lawsuit that weighs heavily on the future of Altria Group Inc., parent company to Philip Morris USA, reported the Chicago Tribune.

The high court will hear oral arguments Wednesday on the company's attempt to overturn a $10.1 billion verdict last year that concluded the company misled smokers by suggesting that "light" cigarettes were safer than regular varieties.

Newly elected Lloyd Karmeier, a Washington County Circuit judge, will not be on the bench for the hearing because he will not be sworn in until Dec. 6. But the case likely will not be decided before he joins the bench. That leaves open the question of whether Karmeier will weigh in on the matter.

If Karmeier decides to opt out of the case, Philip Morris would have the burden of convincing four of the five remaining judges to reverse the lower court's ruling. If the company cannot garner four votes, court precedent suggests that the verdict would stand.

"The new makeup of the court complicates this case," said Tim Ghriskey, chief investment officer of Solaris Asset Management, which owns Altria shares. "It makes a judicial decision, which is always fraught with uncertainty, much more uncertain."

Court rules allow sitting justices to participate in all pending cases, said court spokesman Joseph Tybor. A spokesman for Karmeier said the judge has not determined if he will participate in the case, which involves Altria's U.S. tobacco unit, Philip Morris USA. After joining the bench, he plans to discuss pending cases with the other justices and then make up his mind, the spokesman said.

In this case, a judge in Downstate Madison County ordered Philip Morris to pay $7.1 billion in compensatory damages to 1.1 million Illinois consumers who purchased Marlboro Lights and Cambridge Lights in recent decades. He also ordered the company to pay $3 billion in punitive damages to Illinois and earmarked $1.75 billion for attorneys' fees.

The verdict was so controversial that the state Supreme Court fast-tracked the case on appeal, allowing Philip Morris to bypass the intermediate appellate court. One of Philip Morris's key arguments in its appeal is that the judge erred in allowing the case to go to trial as a class action -- a type of lawsuit used when a large number of people suffer from the same problem.

The company contends that there are too many individual questions of fact to treat the smokers as a class. For example, whether each class member was deceived because he or she believed that lights would deliver less tar and nicotine is an individual issue, Philip Morris said in court papers. The company also argues that federal regulations preempt fraud claims brought under Illinois law.
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