The Illinois Supreme Court has ordered that $2.15 billion in cash that was securing the appeal bond in the Price "lights" case be returned to Philip Morris.
The Price "lights" case is a class action suit filed against Philip Morris in Madison County, Illinois in 2000. The plaintiffs alleged that the descriptors -"lowered tar and nicotine" on every pack of Marlboro Lights cigarettes, misled "Lights" smokers to believe that the Marlboro Lights cigarettes were actually less hazardous than the full-flavor brands.
The smokers claimed that though the Marlboro Lights cigarettes did not pose any health risks to them, they suffered economic damages and asked the Court for reimbursement.
In 2003, Madison County Circuit Court ordered Philip Morris to pay a total of $10.1 billion in compensatory and punitive damages including attorney fees in the amount of $1.775 billion. Philip Morris appealed the decision.
Pending the appeal, Philip Morris was ordered to deposit an appeal bond secured by $800 million in cash and a pre-existing $6 billion long-term note to be placed in escrow pending the resolution of the case.
The $6 billion term note bears an interest rate of 7%. The interest amount of $210 million received every six months was to be deposited in the county account beginning October 1, 2003.
In 2004, Philip Morris appealed to the Illinois Supreme Court to overturn the $10.1 billion judgment and decertify the Price class.
The Supreme Court concluded that Philip Morris was specifically authorized to use descriptors such as "light" and "low tar" by the Federal Trade Commission. The trial court's judgment was reversed in favor of the company. The plaintiffs' motion for rehearing was denied.
With the Supreme Court's verdict favoring Philip Morris, the total amount of $2.15 billion cash including the interest accrued on all cash deposited into the county account, the $800 million paid in quarterly installments and the interest generated from the $6 billion note, will be returned to the company. The Supreme Court's order will also terminate the company's obligations to deposit payments on the note and to pay administrative fees to the Madison County clerk.
If the U.S. Supreme Court declines to hear the plaintiffs' appeal, the $6 billion note, which also secured the 2003 judgment, will be returned to Philip Morris.
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