Judge Approves Tobacco Class-Action Suit

NEW YORK, Sept. 25 -- In a blow to the tobacco industry, a federal judge ruled Monday that a jury should decide whether tobacco companies must pay tens of millions of smokers up to $200 billion for allegedly duping them into buying light cigarettes over the past three decades.

The cigarette makers said they would appeal.

Shares of tobacco firms fell on Wall Street as the ruling, granting class-action status to the case, clouded what had appeared to be an improving legal environment for the industry.

Altria Group Inc., the parent of the nation's largest cigarette maker, Philip Morris USA Inc., said the ruling will delay its long-awaited restructuring plan, which includes a divestiture of its controlling stake in Kraft Foods Inc.

In a conference call Monday, a top Altria lawyer, William S. Ohlemeyer, said that a prerequisite to pursuing the company's restructuring plan is clarity in the overall litigation environment.

"Today's decision is not a step toward clarity. It is a step back of sorts," he said.

His comments came hours after U.S. District Judge Jack B. Weinstein granted class-action status to a lawsuit against Marlboro maker Philip Morris USA, its biggest U.S. rival R.J. Reynolds Tobacco Co. and other cigarette manufacturers.

"The plaintiffs are entitled to the chance to prove their allegations," Weinstein said. The tobacco companies prefer trying each case on its own, saying circumstances vary widely from one person to another.

"We obviously disagree with the ruling -- strongly," said Theodore Grossman, an attorney for Reynolds American Inc.'s R.J. Reynolds Tobacco division. "The law doesn't support class certification."

The suit, filed in 2004, alleges the tobacco companies responded to consumers' mounting health concerns with a marketing scheme to promote light cigarettes as a lower-risk alternative to regular cigarettes, even though their own internal documents showed they knew the risks were about the same.

Smokers' attorney Michael D. Hausfeld said the decision could clear the way for one of the largest class-action cases ever, both in number of plaintiffs and amount of damages. He estimated the class -- consisting of anyone who purchased cigarettes that were labeled "light" or "lights" after they were put on the market in the early 1970s -- could number up to 60 million.