Please ensure Javascript is enabled for purposes of website accessibility

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

By Rich Duprey - Apr 14, 2016 at 8:03AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Cigarette maker found to have not violated Missouri marketing laws.

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.

What happened?
In a class action lawsuit against Altria's (MO 1.13%) 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 one hour 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.

Also this month, jurors rejected claims against Reynolds-American (RAI) 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 could have developed cancer.

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Altria Group, Inc. Stock Quote
Altria Group, Inc.
$54.50 (1.13%) $0.61
Reynolds American Inc. Stock Quote
Reynolds American Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.