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BREAKING: Illinois Supreme Court reverses $10.1 billion judgment

The Illinois Supreme Court sent Price v. Philip Morris back to the lower court with instructions to dismiss the case. Michael Greve criticized the trial court decision in his monograph "Harm-Less Lawsuits?"

The Illinois Supreme Court, in a 4-2 vote, held that the Federal Trade Commission, through the use of two consent orders, had specifically authorized tobacco companies to characterize their products as "light" or "low tar and nicotine." It was thus improper to hold that manufacturers' labeling of their products per FTC regulatory requirements was "consumer fraud." Whether this decision will affect similar litigation in Massachusetts and Missouri is unclear.

The Court expressed "grave reservations" about the appropriateness of the class certification and the calculation of damages, but withheld decision on those issues as extraneous given the decision on the threshhold question that there was no consumer fraud. Justice Karmeier's concurrence (joined by Justice Fitzgerald) is devastating on the issue of actual damages and damages calculations, however, and leaves no doubt how a reasonable court would decide the question.

The Court based its decision on an interpretation of Illinois state law; thus, contrary to early Wall Street Journal coverage, there are no legitimate grounds for appeal to the U.S. Supreme Court, and the decision is final.

Earlier coverage: Feb. 10; Aug. 16, 2004; Jul. 20, 2004. And on Overlawyered Oct. 11, 2004; Apr. 30, 2003; Apr. 6, 2003; Mar. 24, 2003.

Update: Madison County's profit from the appeal bond Philip Morris posted for the privilege of defending itself in front of the Illinois Supreme Court is $9,963,008.58, according to the Madison County Record's analysis of the books. Philip Morris doesn't get that money back, nor the millions of dollars spent defending itself against the absurd Price litigation.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.