- The Washington Times - Monday, September 25, 2006

NEW YORK (AP) — A federal judge today granted class-action status to tens of millions of “light cigarette” smokers for a potential $200 billion lawsuit against cigarette makers.

U.S. District Judge Jack Weinstein in Brooklyn made the ruling on a 2004 lawsuit that says Philip Morris, R.J. Reynolds Tobacco Co., Lorillard Tobacco Co. and other defendants duped smokers and responded to consumers’ mounting health concerns with a campaign of deception designed to preserve revenue.

The class is anyone who purchased cigarettes that were labeled “light” or “lights” after they were put on the market, beginning in the early 1970s. The judge set a trial date of Jan. 22, 2007.

The judge’s decision drove tobacco stock prices as much as 5 percent lower.

In arguing last week for the class certification, smokers’ attorney Michael D. Hausfeld said the manufacturers used a marketing strategy that promoted light cigarettes as a lower-risk alternative to regular cigarettes, even though their own internal documents showed they knew the risks were about the same.

“They understood that they were selling death,” he said. The question, he added, was “how to disguise it. They put on ‘lights.’”

Mr. Hausfeld told the judge that an analysis by plaintiffs’ expert witnesses concluded that more than 90 percent of the smokers in the potential class bought light cigarettes over the past three decades based on health concerns as opposed to taste or other factors.

A separate study found that smokers, had they known the truth about the health risks, would have expected discounts of 50 percent to 80 percent per pack, part of the basis for a demand for $120 billion to $200 billion in damages, he said.

Defense attorneys argued that the lawsuit relied on flawed data and should not be certified as a class action. They also said that without surveying each smoker in the suit, it would be impossible to determine their motives for buying light cigarettes.

In his 1,505-page ruling, Judge Weinstein wrote that class-action certification was “critical to plaintiffs’ case.”

“No other method of aggregation of tens of millions of smokers’ claims is practicable. The small amount of possible recovery for each smoker could not justify the expensive and time-consuming pretrial and trial procedures required,” he wrote.

Shares of Altria Group Inc., owner of the Marlboro maker Philip Morris USA Inc., sank $4.08, or 5 percent, to $78.24 in morning trading on the New York Stock Exchange. Shares of Reynolds American Inc., owner of R.J. Reynolds Tobacco Co. and the second-biggest U.S. cigarette company after Altria, fell $1.65, or 2.7 percent, to $60.37.

Shares of Carolina Group, which is the tracking stock for Loews Corp. and its Lorillard unit, fell $1.47, or 2.6 percent, to $54.41 on the New York Stock Exchange.

It was not immediately clear how the ruling would affect Altria Group’s plans to divest its controlling stake in Kraft Foods Inc., which had seemed to edge nearer after several recent legal rulings seen as favorable to tobacco companies.



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