Class-Action Status Granted in ‘Light’ Cigarettes Suit
U.S. District Judge Jack Weinstein ruled on Monday that a lawsuit filed over allegations that tobacco companies misled consumers about the health risks of "light" cigarettes can move forward as a class-action case, a decision that opens the suit to tens of millions of potential plaintiffs, the AP/Philadelphia Inquirer reports. The lawsuit, filed in 2004, alleges that R.J. Reynolds Tobacco, Lorillard Tobacco, Philip Morris and other tobacco companies misled consumers for more than 30 years with claims that light cigarettes had fewer health risks than regular cigarettes.
Weinstein set a trial date of Jan. 22, 2007 (Hays, AP/Philadelphia Inquirer, 9/26). Weinstein said the issue "is not whether a fraud case can be proven, but whether damages can be" calculated in the case.
Plaintiff attorney Michael Hausfeld said he plans to seek damages of $26 billion to $200 billion based on statistical models showing how much consumers allegedly were overcharged for light cigarettes and how much sooner they allegedly would have quit smoking if the cigarettes were not marketed as healthier than regular cigarettes (Smith, USA Today, 9/26).
Weinstein denied the defendants the right to have him seek an immediate appellate review. The companies said they would appeal the ruling to the Second U.S. Circuit Court of Appeals in New York (O'Connell, Wall Street Journal, 9/26).
In a 540-page ruling, Weinstein compared the case to a "pointillist painting," saying that when "a juror stands back from the canvas and looks at the big picture, he or she may well discern clearly enough an industry based on fraud and coverup that has taken more than half a century to begin to admit its subtle lies to the public designed to sell its product" (Marzulli/Siemaszko, New York Daily News, 9/26). He added that plaintiff attorneys had presented "substantial evidence" demonstrating that the eight tobacco companies named in the suit defrauded consumers (USA Today, 9/26).
Weinstein said class-action certification is necessary in the case because "no individual plaintiff can afford to prosecute the case alone," adding that any flaws in the case are outweighed by the need to put it before a jury (AP/Philadelphia Inquirer, 9/26). He wrote, "The small amount of possible recovery for each smoker could not justify the expensive and time-consuming pretrial and trial procedures required" for individual cases (Wall Street Journal, 9/26).
Hausfeld said as many as 60 million consumers could qualify for the class, which could include anyone who purchased cigarettes labeled as "light" or "lights" after they were put on the market in the early 1970s (AP/Philadelphia Inquirer, 9/26).
Because the suit is being brought under the Racketeer Influenced and Corrupt Organizations Act, the damages could be tripled (AP/Philadelphia Inquirer, 9/26). In addition, according to the Washington Times, the "number of plaintiffs could jump if the scope of the lawsuit is expanded to include" manufacturers of all "low-tar" cigarettes (Lopes, Washington Times, 9/26).
Several broadcast programs reported on the ruling:
- APM's "Marketplace": The segment includes comments from Jonathan Turley, a professor at George Washington University Law School; Thomas Russo, a portfolio manager; and Victor Schwartz, general counsel for the American Tort Reform Association (Dornhelm, "Marketplace," APM, 9/25). The complete transcript and audio in RealPlayer of the segment are available online.
- NPR's "All Things Considered": The segment includes comments from Hausfeld, Ohlemeyer and Rabin (Hochberg, "All Things Considered," NPR, 9/25). The complete segment is available online in RealPlayer.
- NPR's "All Things Considered": The segment includes comments from Tom Perrotta, staff reporter for the New York Law Journal (Block, "All Things Considered," NPR, 9/25). The complete segment is available online in RealPlayer.
- PBS' "Nightly Business Report": The segment includes comments from Fred Burke, president of Johnston Lemon Asset Management; Hausfeld; Ohlemeyer; and Turley (Dhue, "Nightly Business Report," PBS, 9/25). The complete transcript is available online.