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An Illinois trial judge has slapped Philip Morris Inc. with $10.1 billion in compensatory and punitive damages in a consumer fraud class action suit that Philadelphia litigator Stephen Sheller helped pioneer against the tobacco giant. Plaintiffs in the case succeeded in showing that Philip Morris was fraudulent in marketing “light” cigarettes as posing less health risk than other cigarettes. Illinois Circuit Court Judge Nicholas G. Byron handed down the 11-figure award after determining that Philip Morris violated the Illinois Consumer Fraud Act and the Uniform Deceptive Trade Practices Act by touting its Marlboro Lights and Cambridge Lights cigarettes as safer and lower in tar and nicotine than regular cigarettes when evidence demonstrated that, in reality, light cigarettes are more harmful than their regular counterparts. “The Court recognizes that punitive damages are not favored in the law and this Court is careful not to award such damages improperly or unwisely,” Byron wrote in his opinion in the case, captioned as Price v. Philip Morris Inc. “However, the course of conduct by Philip Morris related to its fraud in this case is outrageous, both because Philip Morris’ motive was evil and [because] the acts showed a reckless disregard for consumers’ rights.” Byron said Philip Morris intentionally designed its light cigarettes to provide for lower machine measurements of tar and nicotine, knowing that smokers would unconsciously compensate and extract the same levels of tar and nicotine that they would get from regular cigarettes by inhaling more deeply, taking more frequent or larger puffs and holding the smoke in for longer periods of time than they otherwise would. “Philip Morris internal documents and the testimony offered at trial demonstrate that Philip Morris, prior to the launch of Marlboro Lights and Cambridge Lights, knew that smokers adjusted their smoking behavior through largely unconscious means so as to receive the same dose of nicotine and tar from a light cigarette as from a regular cigarette,” Byron wrote in a 51-page opinion. “In fact, the testimony and evidence clearly establish that Marlboro Lights and Cambridge Lights were specifically designed in such a way as to reduce the machine-measured tar and nicotine delivery while at the same time allowing consumers to extract the same levels of tar and nicotine from these products as they would extract from their regular Marlboro and Cambridge counterparts.” Byron further said the light cigarettes’ design, even without “complete compensation” by smokers, increases the degree to which the cigarette smoke causes mutations. The opinion further indicates that the tar in light cigarettes contains more toxic substances than the tar in regular cigarettes, a conclusion Byron reached after hearing evidence and testimony he characterized as “particularly persuasive and disturbing.” After a trial spanning approximately six weeks, the Madison County, Ill., judge awarded $7.1 billion in compensatory damages to the million plus class members, and an additional $3 billion in punitive damages to the state of Illinois. News reports indicate that attorney fees will approach $1.8 million, or 25 percent of the compensatory damage award. Sheller, who is the founder and managing partner of Philadelphia-based plaintiffs’ firm Sheller, Ludwig & Badey, said the distribution of fees among the participating legal teams has not yet been determined. Sheller co-argued for class certification in the case before turning the remaining courtroom activity over to Illinois attorney Stephen Tillery of Carr Korein Tillery. Sheller Ludwig & Badey continued to provide assistance to during the trial, partner George Badey told The Legal Intelligencer. Sheller said in an interview earlier this month that he decided to pursue light cigarette fraud claims several years ago while working on other tobacco suits. A tobacco company insider, he said, told him that light cigarettes essentially do not offer consumers less tar or nicotine or bode better for consumer health. Indeed, in July 1998, Sheller wrote to the Senate Budget Committee in Washington, D.C., urging Congress to permit suits by smokers in state court systems. In the letter, the attorney asserted that light and ultra light cigarettes were intended to keep consumers smoking by convincing them that lighter cigarettes were safer cigarettes. Byron said that at trial, the Miles plaintiffs argued that use of the descriptor “lights,” and explicit statements on each package of Marlboro Lights that the cigarettes contained “lowered tar and nicotine,” constituted material and false representations in violation of the Illinois Consumer Fraud Act. In addition, class members contended that the representations were false and misleading because the plaintiffs did not receive lower tar or nicotine, and that even if some class members did receive reduced tar, the representations were fraudulent and misleading because matters materially qualifying the representations were not stated. “The matters not stated,” the opinion states, “are that the ‘tar’ from Marlboro Lights and Cambridge Lights cigarettes is higher in toxic substances and more mutagenic than the tar from regular Marlboro and Cambridge cigarettes. Therefore, even if it were possible that for some Class members the representation of ‘lowered tar’ were true, the representation — without the material qualification that the delivered tar is more harmful — is fraudulent.” Philip Morris countered by offering expert testimony that people may smoke and choose light cigarettes for a variety of reasons, Byron said. The expert, the opinion states, testified that the belief that the light cigarettes were safer did not factor into the cigarette choices of all class members because the health hazards of smoking are irrelevant to some smokers and in fact, some young smokers are attracted to the dangers of smoking. The judge disagreed. “As a threshold matter,” Byron wrote, “the mere existence of potential other reasons for a consumer to prefer the products at issue � does not vitiate or eliminate the fraud associated with the health representation as a causative influence on all Class members’ purchase decisions. � The Court finds it altogether implausible that any smokers who have no concerns about the hazards of smoking or who actually want to defy death by smoking � would choose � to smoke a low tar cigarette like Marlboro Lights and Cambridge Lights.” Philip Morris also asserted at trial that in addition to its own representations about its cigarettes, consumers were influenced by the public health community at large, and specifically by reports from the Surgeon General and the American Cancer Society. Byron rejected that argument as well, stating that public health authorities did not possess the same knowledge that the manufacturer did. “The Court finds that Philip Morris took advantage of the message of the public health community [that lower delivery of toxic substances may reduce harm] in selling their cigarettes,” the judge wrote, “which delivered neither lower tar and nicotine, nor less harm to the Class members in this case.” Later in the opinion, the judge described “Philip Morris’ contention that the public health community should somehow be blamed for the fraud associated” with light cigarettes as “morally abhorrent.” Sheller said the verdict bodes well for cases pending in other states. The attorney will serve as class counsel for a similar case in Florida, where an appeal of class certification is still pending. A class has been certified in Massachusetts as well, and Sheller said that in Missouri, class certification has been briefed and argued. Additionally, class certification has been requested in seven other states and individual claims are moving forward in New Jersey, Sheller told The Legal Intelligencer. “I think what is important here,” Sheller said, “is that [the verdict] shows that plaintiffs’ lawyers are critical for discovering fraud.” Byron granted Philip Morris’ request for a stay of execution for a period of 30 days. Thereafter, the judge said, judgment would only be stayed if a $12 billion appeal bond is presented and approved. However, a bill that would limit the amount of money tobacco manufacturers must post before pursuing appeals after billion-dollar verdicts has already passed in Illinois’ House and is currently pending before the Senate. The cap would limit bond requirements to $100 million. Philip Morris has said it will appeal the ruling.

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