Instant Analysis: Altria Group Inc. Wins Another Big "Lights" Lawsuit

By Markets Fool.com

Altria no longer markets its cigarettes as "lights," and the FDA has regulated when and how such terms can be used. Image source:Bo ("call me Daniel") Gao.

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What happened?
In a class action lawsuit against Altria's Philip Morris USA division last week, a Missouri jury sided with the tobacco company's defense that it didn't violate state laws over how it marketed its Marlboro Lights brand of cigarettes. The plaintiffs sought damages of $1.8 billion from the cigarette maker.

Does it matter?
The plaintiffs alleged Philip Morris had deceived smokers into falsely believing light cigarettes were safer than regular cigarettes. The lead plaintiff, Deborah Larsen, said she smoked about a pack and a half of Marlboro Lights a day between 1979 and 2002, when she quit. Although the packaging promised lower tar and nicotine, they were purportedly made from the same tobacco as regular cigarettes, and her attorney argued light cigarette smokers were actually more at risk because they might inhale longer and deeper.

The case was first filed in 2000, and in 2011 a mistrial was declared when a jury deadlocked 8-4 in favor of the plaintiffs. Nine jurors were needed to rule for the plaintiff. With the retrial, the case lasted about a month, but the jury needed just onehour to find in favor of Philip Morris. In 2009, the FDA began regulating cigarettes and prohibited the use of words like "lights" unless the tobacco company got prior approval. The Altria unit stopped marketing the cigarettes as "lights" in 2003.

It's an important decision because it marks yet another big ruling in Philip Morris's favor, which last year had the Illinois Supreme Court reject a $10 billion judgment against the tobacco company. Last month, it asked the U.S. Supreme Court to not hear an appeal. In February, a jury rejected an attempt by smokers to have Philip Morris pay for annual cancer screenings.

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Also this month, jurors rejected claims against Reynolds-American and its R.J. Reynolds division for the death by cancer of a Florida plaintiff. In that case, the ruling hinged on whether it could be proved it was Reynolds' Winston brand of cigarettes that caused the cancer, because for the first 15 years the plaintiff smoked, he used a different brand. They heard testimony that had he quit smoking at that point and never touched a Reynolds product, he still couldhave developed cancer.

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There have been thousands of lawsuits filed in Florida as a result of the original Engle v. Liggett class action case in 1994 that found tobacco companies knowingly produced a harmful product. While the case was decertified on appeal, allowing plaintiffs to pursue their cases individually, they're still allowed to rely upon the verdict in the original case.

The article Instant Analysis: Altria Group Inc. Wins Another Big "Lights" Lawsuit originally appeared on Fool.com.

Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.