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Scalia stays Louisiana class action ruling against tobacco companies

By Dwyer Arce

[JURIST] US Supreme Court Justice Antonin Scalia [Oyez profile] on Friday stayed [order, PDF] a Louisiana appeals court ruling awarding $241.5 million to the plaintiffs in a class action suit against several tobacco companies. The ruling, issued by Scalia in his role as Circuit Justice [28 USC § 2101(f)] for the US Court of Appeals for the Fifth Circuit, prevents the tobacco companies from having to carry out the decision, which ordered them to pay $241.5 million to a fund meant to help Louisianans quit smoking. The companies, which include Brown & Williamson Tobacco Corporation, Lorillard Tobacco Company, Philip Morris USA, Inc. and Tobacco Institute, Inc., were also ordered to pay $29 million in interest and $11 million for the administrative costs related to the fund. The ruling came after the Louisiana court found that the tobacco companies had "distort[ed] the entire body of public knowledge about the addictive effects of nicotine." Scalia held that the case met the stay criteria, finding that it was likely the Supreme Court would grant certiorari, that there was a "significant possibility" of reversal and that there was the likelihood of irreparable harm without the stay. He also held that the case raises due process concerns because, under the Louisiana ruling, the individual plaintiffs are not required to establish that they were harmed by the companies' actions, violating the companies' due process right to present every available defense:

The extent to which class treatment may constitutionally reduce the normal requirements of due process is an important question. National concern over abuse of the class-action device induced Congress to permit removal of most major class actions to federal court, where they will be subject to the significant limitations of the Federal Rules. Federal removal jurisdiction has not been accorded, however, over many class actions in which more than two-thirds of the plaintiff class are citizens of the forum State. Because the class here was drawn to include only residents of Louisiana, this suit typifies the sort of major class action that often will not be removable, and in which the constraints of the Due Process Clause will be the only federal protection.

The companies are expected to file their appeal to the Supreme Court in the coming year.

The companies requested the stay after the Supreme Court of Louisiana refused to hear their appeal from the ruling [text] of the Louisiana Court of Appeals for the Fourth Circuit. Phillip Morris has faced other class action litigation related to its sales practices. In 2008, the US Court of Appeals for the Second Circuit overturned class action certification [JURIST report] for a lawsuit brought by "light" cigarette smokers against Philip Morris and other light cigarette makers. The class action, which included anyone who has ever bought light cigarettes since they hit the market in the 1970s, had alleged that tobacco companies used deceptive advertising tactics to mislead smokers in response to growing health concerns over the risks of smoking cigarettes. In September 2006, a judge for the US District Court for the Southern District of New York certified the class of 50 million plaintiffs [JURIST report] for the class-action suit. Lawyers estimated that sales of light cigarettes brought tobacco companies between $120 billion and $200 billion in extra sales since 1971.

Full post as published by JURIST - The Paper Chase on September 26, 2010 (boomark / email).