Illinois Supreme Court hears arguments in appeal of $10 billion verdict against Phillip Morris

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CHICAGO — The fate of a $10.1 billion class-action judgment against the nation's largest cigarette maker is in the hands of justices at the Illinois Supreme Court, who heard oral arguments Tuesday in Phillip Morris USA's appeal to have the on-again, off-again verdict struck down.

The more than decade-old lawsuit — one of the nation's first to accuse a tobacco company of consumer fraud — claimed that Phillip Morris deceptively marketed "light" and "low-tar" cigarettes as a healthier alternative.

The initial Madison County trial ended in 2003 with the multibillion dollar verdict against Phillip Morris, a subsidiary of Virginia-based Altria Group Inc. The state's high court threw it out in 2005 only to have Illinois' 5th District Appellate Court reinstate the verdict last year.

An attorney representing the hundreds of thousands of Illinois smokers asked the panel Tuesday to reject Phillip Morris' appeal and let the judgment stand. David Frederick said the cigarette giant had carried out a "massive fraud" that "light" cigarettes "were safer or healthier."

But former Illinois Gov. Jim Thompson, one of two lawyers representing Phillip Morris during the 50-minute hearing, argued that the Illinois Supreme Court got it right ten years ago when it decided to jettison the trial court's verdict.

"And that judgment is correct today," he said.

The core dispute has been whether the Federal Trade Commission allowed cigarette makers to label cigarettes "light" and "low-tar," effectively shielding Phillip Morris from such suits. Phillip Morris says the FTC did give it permission to label cigarettes that way. But plaintiffs argued FTC didn't give its OK and it alleges that an agency decision in recent years confirmed that interpretation.

Thompson, though, said plaintiffs shouldn't be allowed to offer up new evidence of federal regulators' intent so many years later.

"Surely this is not a game of musical chairs depending on who sits in the chair of the FTC at any time," he said at the hearing.

The lawsuit sought compensation, not for damage to a smoker's health, but for the money they paid for what they thought were safer cigarettes based on the Phillip Morris advertising.

The hearing was held in Springfield and also broadcast live online. A ruling is likely to take at least several weeks.

Lloyd Karmeier was among the justices on Tuesday's panel. The plaintiffs had asked him to recuse himself because they say there could be a perception of bias in favor of Phillip Morris, based on reports the company gave money to groups backing his election to the bench.

In a 16-page explanation last year for why he wouldn't take himself off the case, Karmeier said the plaintiffs' attorneys had offered no evidence to support a view he couldn't be even-handed.

"Rumor, speculation, belief, conclusion, suspicion, opinion or similar non-factual matter are not sufficient," he wrote.

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