SPRINGFIELD, Ill. (Legal Newsline) - Smokers who won a $10 billion class action judgment against Philip Morris in Madison County 12 years ago suffered no economic damage, the cigarette maker is arguing at the Illinois Supreme Court.
“Illinois law is clear that disappointed expectations are not enough,” Michelle Odorizzi of Chicago wrote in an April 13 reply to a plaintiff brief.
“Plaintiffs must also show pecuniary loss,” she wrote.
The Supreme Court reversed the judgment in 2005, but Fifth District appellate judges reinstated it last year.
Fifth District judges ruled that smokers brought forth new evidence that would have caused the Supreme Court to affirm the judgment.
Supreme Court Justices chose to decide the case themselves, rather than let the Fifth District tell them how they would decide it.
The Justices have not set a date for oral argument.
St. Louis lawyer Stephen Tillery sued against Philip Morris in 2000, alleging it violated Illinois consumer fraud law.
He claimed that for 30 years, Philip Morris deceived millions of smokers into expecting health benefits from light and low tar cigarettes.
He sought to recover the difference between the cost of light and low tar cigarettes and what smokers would have paid if they had not expected health benefits.
Former Madison County circuit judge Nicholas Byron held a bench trial in 2003, and ruled that Philip Morris violated the law.
He awarded more than $7 billion in compensatory damages, relying on a “contingent valuation survey” that Tillery conducted.
Byron ordered distribution of any unclaimed funds to groups he deemed worthy.
He allocated a fourth of the compensatory fund to Tillery’s legal team.
He awarded $3 billion in punitive damages to the state of Illinois.
He estimated the net worth of Philip Morris at $25 to $50 billion. With his ruling he in effect wiped out 20 to 40 percent of the company.
Philip Morris petitioned the Supreme Court for direct review, which the Justices first denied but later granted.
Philip Morris pleaded to the Justices that Byron shouldn’t have certified a class action, that plaintiffs suffered no economic loss, and that federal law preempted state law because the Federal Trade Commission authorized light and low tar labels.
The Supreme Court reversed Byron in 2005, on the grounds of federal preemption, without deciding the merits of class certification or damages.
In 2008, the Federal Trade Commission issued an opinion that it had not authorized light and low tar labels.
Tillery tried to reopen the suit in Madison County, claiming the commission’s opinion counted as new evidence.
Byron’s successor, circuit judge Dennis Ruth, declined to reopen it.
Tillery appealed to the Fifth District, and succeeded in restoring Byron’s judgment.
Now, at the Supreme Court, Odorizzi advances two arguments.
First, she disputes that the trade commission’s opinion counts as new evidence.
“Plaintiffs do not claim that the FTC’s statements revealed any previously unknown facts about what the FTC said or did over the 30 year class period,” she wrote.
“On the contrary, it is undisputed that the historical record remains the same today as it was in 2005.”
Second, if the opinion does count as new evidence, she asks the Justices to reject the certification of a class and the calculation of damages.
On class certification, she wrote that deception and causation depend on individual knowledge, perceptions, preferences and motivations.
“Plaintiffs point to the fact that all 23 of the class members whose testimony was presented at trial said they had been deceived,” she wrote.
“But there is no basis for concluding that this tiny hand picked fraction of the class reflected the entire class’s knowledge or beliefs.”
She wrote that 17 of them continued buying light cigarettes after they no longer believed them to be safer.
She wrote that Byron violated due process by denying Philip Morris discovery of any class member other than the 23.
On damages, she wrote that no other court has accepted a survey that asked participants to subjectively value an allegedly misrepresented product.
“This case illustrates why: the survey results bore no resemblance to reality,” she wrote.
She wrote that the survey was not designed to yield a reasonable estimate of the actual value of Lights.
She wrote that, “it was formulated to maximize damages by pushing the value of Lights as close to zero as possible.”
She wrote that, “more than half of the class members who provided testimony at trial kept buying Lights at the same price.”
Former Gov. Jim Thompson, of Winston and Strawn in Chicago, worked on the brief. So did Larry Hepler and Beth Bauer, both of HeplerBroom in Edwardsville