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From Antitrust Law Daily, November 4, 2015

$10B deceptive marketing judgment against Philip Morris vacated

By Greg Hammond, J.D.

An Illinois appellate court decision reinstating a $10.1 billion verdict against Philip Morris, Inc.—a verdict that was previously reversed by the Illinois Supreme Court—was vacated in a suit alleging that Philip Morris violated Illinois law by deceptively marketing its “light” and “low tar” cigarettes. The Illinois Supreme Court determined that the appellate court could not decide the merits of the case because the plaintiffs incorrectly filed a petition for relief from judgment in an Illinois circuit court, when they should have filed the petition in the state supreme court (Price v. Philip Morris, Inc., November 4, 2015, Burke, A.).

Consumers filed a class action against Philip Morris in 2000, alleging that the company’s advertising of its cigarettes as “light” or “low tar” violated the Illinois Consumer Fraud and Deceptive Business Practices Act and Uniform Deceptive Trade Practices Act. The trial court entered a $10.1 billion judgment in favor of the consumers, but the Illinois Supreme Court reversed that judgment, finding that the FTC specifically authorized use of the terms “light” and “low tar” and holding that the consumers’ claims were consequently barred by section 10b(1) of the Illinois Consumer Fraud Act. The trial court consequently entered an order of dismissal, pursuant to the Supreme Court’s decision.

The consumers later filed a Section 2-1401 petition for relief from judgment in an Illinois circuit court, alleging that they were originally unable to present evidence of the FTC’s position with regard to the use of descriptors such as “light” or “low tar.” The circuit court denied the petition on the merits. The appellate court, however, reversed the circuit court’s decision and reinstated the original $10.1 billion judgment. Philip Morris appealed to the Illinois Supreme Court.

Section 2-1401. The Court determined that Section 2-1401 does not authorize a circuit court to vacate the judgment of a reviewing court. Nor does it allow an on-the-merits challenge to a dismissal order entered at the direction of a reviewing court, because such a challenge is necessarily directed to the judgment rendered by the reviewing court. Rather, the consumers’ appropriate form of relief in this action would be to file a motion to recall the mandate in the Illinois Supreme Court, which was the reviewing court. As such, neither the circuit court nor the appellate court on review had the authority to vacate the trial court’s order dismissing the consumers’ complaint with prejudice. The Supreme Court therefore vacated the judgment of both the circuit and appellate courts and dismissed the cause of action without prejudice, allowing the consumers to file a motion to recall the Supreme Court’s earlier mandate.

Dissent. Justices Charles E. Freeman and Thomas L. Kilbride dissented, claiming that the appellate court applied Section 2-1401 exactly as the legislature intended—“to promote justice and fairness.” Justice Freeman wrote, “[R]ather than doing justice under the law as the legislature intended through section 2-1401, this court views [its earlier decision] as immunizing the circuit court’s dismissal order, which this court directed, from section 2-1401 relief. To reach this result, my colleagues strain to read exceptions, limitations or conditions into the unconditional language of section 2-1401.”

The case number is 2015 IL 117687.

Attorneys: Stephen Tillery (Korein Tillery LLC) for Sharon Price. Michelle Odorizzi (Mayer Brown LLP) for Philip Morris, Inc.

Companies: Philip Morris, Inc.

MainStory: TopStory Advertising StateUnfairTradePractices IllinoisNews

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