States File Brief To Lower Philip Morris’ Appeals Bond in Illinois Decision

Attorneys general from 37 states yesterday filed a friend-of-the-court brief urging an Illinois court to reduce a $12 billion bond needed for Philip Morris USA to appeal a recent decision, the AP/Long Island Newsday reports (Skiles Luke, AP/Long Island Newsday, 4/8). Last month, Madison County, Ill., Judge Nicholas Byron ruled in a class-action case that Philip Morris misled consumers about the health risks of "light" cigarettes and ordered the company to pay $10.1 billion in damages. Philip Morris officials plan to appeal the case, but state law requires the company to post a $12 billion bond before it can file an appeal. Officials for Philip Morris said that unless the $12 billion bond was lowered to no more than $1.5 billion, it would force the company into bankruptcy. The state attorneys general called the bond excessive and said they are filing the brief because the payment could threaten Philip Morris' $2.6 billion tobacco settlement payment due to the states on April 15. The state attorneys general also told Philip Morris that they would sue the company if it missed the payment (California Healthline, 4/7). In the brief, the state attorneys general said the appeal bond could threaten the "vital interests" of the states and "interfere with government functions" (Cheddar Berk, Dow Jones/Wall Street Journal, 4/8). According to Oklahoma Attorney General Drew Edmondson (D), who is president of the National Association of Attorneys General, the brief also seeks to protect "the interests of innocent third parties ... who are the beneficiaries of the state programs supported by the payments," AP/Newsday reports. Several states, including California, Florida, Illinois, New York and Texas, did not sign the brief. Melissa Merz, a spokesperson for Illinois Attorney General Lisa Madigan (D), said Madigan will not take a stance on the situation until Philip Morris' financial condition is clear (AP/Long Island Newsday, 4/8).