Second Circuit Hears Schwab Tobacco Oral Argument

Earlier this month, the Second Circuit Court of Appeals heard oral argument in the Schwab case.  Here's an excerpt from an article on Bloomberg.com describing the oral argument -- Cigarette Makers Ask Court to Block $200 Billion Suit, by Bob Van Voris:

Altria Group Inc.'s Philip Morris USA and other cigarette makers asked a federal appeals court to dissolve a $200 billion racketeering class-action lawsuit filed on behalf of smokers of ``light'' cigarettes in the U.S.

The companies argue that legal and factual differences between individual smokers make a trial of all the claims in a class-action, or group, lawsuit impossible. Lawyers for smokers said a class action is the only practical way for their clients to recover damages for an alleged decades-long fraud.

Smokers of ``65 brands with hundreds of advertising campaigns over 35 years'' couldn't have chosen to smoke light cigarettes for a single reason, Theodore Grossman, a lawyer for the companies, told a three-judge appeals panel today.

Class status gives plaintiffs more leverage, increasing potential damages at trial and enabling them to possibly force a better settlement. Filed in 2004 under the Racketeer Influenced and Corrupt Organizations Act, or RICO, the suit claims cigarette makers defrauded smokers of ``light'' and ``low-tar'' cigarettes by marketing them as safer than other brands.

If the appeals court permits the case to go forward, it would represent the biggest potential legal liability for the tobacco industry.

BGS