US Court Rejects $270M Tobacco Lawsuit Appeal

The Supreme Court rejected an appeal by the major tobacco companies of a $270 million award for a Louisiana smoking cessation program.

Altria Group Inc's Philip Morris USA Inc, a Reynolds American Inc unit, a Lorillard Inc unit and British American Tobacco Plc's Brown & Williamson unit said Louisiana courts improperly allowed the case to go forward as a class action on behalf of more than 500,000 smokers.

A 2004 jury verdict in the case was the first to require tobacco companies to pay for a program to help smokers quit. The original $591 million award was reduced on appeal to $270 million, consisting of $242 million, plus interest.

The companies said in the appeal the state courts in allowing the class-action lawsuit deprived then of their constitutional due process rights and protections that would have applied in deciding individual smoker claims.

They said the Louisiana courts denied them an opportunity to contest whether any smokers in the class actually relied on the claimed distortions by the companies of the health hazards of smoking through nicotine addiction.

In September, Supreme Court Justice Antonin Scalia ruled the companies would not have to start paying for the 10-year program while the justices considered the case.

The companies said the case presented issues of "national importance" as class actions play "an increasingly prominent role in the modern legal landscape" and encompass larger groups with disparate claims.

Attorneys for the smokers, who filed the lawsuit in 1996, disagreed and said the case presented no issue of great national importance. They urged the Supreme Court to reject the appeal.

The Supreme Court rejected the appeal Monday in a brief order without comment.

The justices rejected the tobacco appeal after last week's ruling that threw out a massive class-action sex-discrimination lawsuit against Wal-Mart Stores Inc (NYSE:WMT), the biggest such case in U.S. history. The Wal-Mart ruling will make it harder for similar class-action lawsuits to proceed in the future.

The Supreme Court case is Philip Morris USA Inc v. Deania Jackson, No. 10-735.