Louisiana Court Enters Judgment In Scott Case; Philip Morris USA Plans Further Appeal

Philip Morris USA said today it will seek further review in the Scott case after a Louisiana trial judge ordered the nation's major cigarette companies to pay some $263.5 million to fund a statewide 10-year smoking cessation program.

The state's appellate court, in a 2007 opinion, found that individuals whose claims arose after Sept. 1, 1988 could not participate in the smoking cessation program. The company contends a trial is necessary to determine what smokers, if any, are eligible for the program and its costs if the case is to proceed.

"The company believes the trial court has disregarded the state appellate court's mandate to conduct further trial proceedings to determine how many persons may participate in the cessation program and the total cost of the program," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of PM USA.

The amount awarded today is less than a quarter of the amount awarded for the program's funding in the 2004 trial because the appellate court deemed much of the earlier award legally improper. Philip Morris USA is one of four tobacco companies responsible for the judgment, plus interest since June 30, 2004.

In its order, the trial court acknowledged the multimillion-dollar award "may be too large" for the number of persons who will qualify for smoking cessation services, but insisted that eligibility could be determined administratively rather than by conducting further trials.

The court also suggested that the award "may be satisfied with something less than a full cash payment now." The court noted that an "arrangement of guaranteed funds available on the anniversary dates of the program's commencement may satisfy the judgment," with the possibility of any unused funds being returned to the defendants on a yearly basis.

Based on the appellate court's earlier review, those plaintiffs eligible to participate may seek reimbursement of smoking-cessation related medication. Additionally, the program would involve telephone "quit lines," health system intervention and intensive cessation programs for eligible smokers.

The class-action plaintiffs had additionally sought a multi-billion dollar medical monitoring program, but the jury rejected that claim at the conclusion of the trial's first phase in July 2003.

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