April 8, 2008 - NY: No Class Action for Tobacco Case

Tobacco companies have won a legal round over smokers who claim they were misled about the health effects of light cigarettes.

The 2nd U.S. Circuit Court of Appeals in Manhattan overturned class-action status on Thursday for a lawsuit seeking at least $200 billion on behalf of tens of millions of smokers.

The damages theoretically could go as high as $800 billion. If that were the case, it could become the largest class action in American history and more than has been spent on the Iraq war, said a lawyer for the tobacco companies.

The defendants, including Marlboro maker Philip Morris USA, its biggest U.S. rival, R.J. Reynolds Tobacco Co., and other manufacturers, prefer trying each case on its own, saying circumstances for each smoker vary widely.

Grossman said the ruling has "tremendous significance," in part because there were similar class action lawsuits pending in various states which make the same claims.

The lawsuit says tobacco companies promoted light cigarettes as a lower-risk alternative to regular cigarettes, even though their internal documents allegedly showed they knew the risks were about the same. The class may consist of as many as 60 million people, lawyers say.

Plaintiffs' attorneys said the ruling was upsetting but no decision has been made about whether to appeal.

"Not only was a lot of money spent on a product that wasn't what it was represented to be, but a lot of lives were lost and diseases contracted unnecessarily," they said.

A lawyer for the tobacco companies did not immediately return a telephone message for comment.

The case has been in the court for years. The three-judge appellate panel knocked down a 2006 ruling by a U.S. District Judge in Brooklyn that granted the class action status. But the lawsuit against cigarette makers had been filed in 2004.

The appeals court did say that some smokers may have relied on misrepresentations by tobacco companies to varying degrees.

The plaintiffs' lawyers argued that they could prove on a class-wide basis that smokers would not have favored light cigarettes had the truth been known.

The appeals court said each individual would have to prove whether they relied completely, in part, or not at all on marketing misrepresentations in purchasing light cigarettes.

A lawyer for the companies said it will be difficult for plaintiffs to proceed individually because each will have to show why they purchased light cigarettes and what they would have done in the absence of light cigarettes.

"Because factors other than defendants' misrepresentation may have intervened and affected the demand and price of lights, and because determining the portion of plaintiffs' injury attributable to defendants' wrongdoing would require an individualized inquiry, plaintiffs cannot establish loss causation on a class-wide basis," the court said.

But plaintiffs' attornies, advocating for the class action status, said there are core issues common to all purchasers, such as the mass marketing of light cigarettes.

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