Jonathan Bilyk Nov. 4, 2015, 11:44am

A divided Illinois Supreme Court has upheld its decision 10 years ago to toss out a $10 billion class action judgment against tobacco giant Philip Morris, saying more recent statements from the Federal Trade Commission concerning how the agency had regulated the marketing of so-called “light” cigarettes does not grant lower state courts the authority to reopen the case or reinstate the judgment.

On Nov. 4, the state Supreme Court ruled 4-2 to overturn a ruling by the Illinois Fifth District Appellate Court which, if allowed to stand, would have effectively negated all the rulings and proceedings in the case since a court had awarded a class of smokers the huge damages award from Philip Morris over claims the tobacco company had misled smokers into believing cigarettes marketed as “light” were actually safer to smoke than regular cigarettes.

Justice Anne M. Burke authored the opinion for the court’s majority. She was joined in the opinion by Chief Justice Rita B. Garman and justices Lloyd A. Karmeier and Mary Jane Theis.

Justices Charles E. Freeman and Thomas L. Kilbride dissented from the majority opinion.

Justice Robert R. Thomas had recused himself from proceedings on the case, as one of the attorneys for the plaintiffs in the case had once represented him in other legal proceedings.

The ruling comes as the latest decision in the continuing saga surrounding the high stakes litigation that began in 2000 when the smokers, through named plaintiff Sharon Price, first filed suit in Madison County Circuit Court against Philip Morris over the light cigarettes marketing claims. Rather than asserting the cigarettes caused adverse health effects, the smokers simply asserted Philip Morris’ alleged marketing claims violated the state’s consumer fraud laws, as the cigarettes did not deliver the benefits the smokers alleged were promised.

In 2003, the trial court awarded damages worth $7 billion to a class of more than 1 million people, plus $3 billion to the state of Illinois.

The judgment was appealed directly to the Illinois Supreme Court, which overturned the lower court’s finding in 2005, finding the FTC “had ‘specifically authorized’ defendant’s (Philip Morris’) use of the descriptors ‘light’ and ‘lowered tar and nicotine,’ thereby barring plaintiffs’ complaint.” In supporting this decision, the state high court pointed to a 1971 FTC consent order, reiterated in 1995, which appeared to authorize the use of such terms in marketing light cigarettes.

Justices also expressed concerns about the certification of the class in the case, and “’grave reservations’ about plaintiffs’ theory of damages in the case.”

Following the ruling, however, plaintiffs moved to reopen the case and reinstate the $10 billion judgment, centering their effort on a brief filed in 2008 by the FTC with the U.S. Supreme Court in a different case, in which the FTC appeared to indicate “it had not authorized cigarette companies to use” the descriptors at the heart of the case.

Plaintiffs argued the brief was “new evidence” that required the courts to take another look at the case under section 2-1401 of the Illinois Code of Civil Procedure.

A Madison County Circuit Court took up the matter, but ruled the “new evidence” wasn’t enough to find the Illinois Supreme Court would have ruled any differently.

On appeal, however, the Fifth District Appellate Court said the 2008 FTC brief contained enough “direct statements” concerning the FTC’s actual intentions to conclude “it was ‘easy to see’ how the (state Supreme) Court’s analysis ‘would have been changed.’”

The appeals court then used this rationale to “restore the parties to the status quo” before Philip Morris first appealed the 2003 judgment, effectively reinstating the $10 billion award.

Philip Morris appealed that decision to the state Supreme Court, and a majority of justices said the lower courts had overstepped their authority even in taking up the plaintiffs’ section 2-1401 petition, much less in determining the state Supreme Court had erred in 2005 and that its judgment should be changed.

Calling the petition “an impermissible attack” on the state high court’s 2005 judgment, the majority said the petition side-stepped the correct course of action to reopen the case, which they said was to petition the state Supreme Court to recall its mandate expressed in the 2005 decision.

While plaintiffs’ lawyers attempted different ways to argue the petition, and the appellate ruling, should stand, “the result is the same,” the majority said. “The circuit court was asked to do something it does not have the authority to do – vacate a judgment of a higher court. Accordingly, the circuit court erred in considering the merits of the plaintiffs’ section 2-1401 petition. As relief was unavailable under that provision, the petition should have been dismissed.”

In the dissent, Justice Freeman said this case’s “unique set of circumstances” require the high court to find differently in the cause of promoting “justice and fairness.”

He said the plaintiffs’ petition based on the new FTC brief represented “a new action that presented a factual and legal challenge” to the court’s dismissal of the case in 2005. As such, Freeman said, the plaintiffs should be entitled to further proceedings on the matter, as he argued lawmakers intended when they created the section 2-1401 rule to remedy such “great injustice” as a case decided on an incomplete set of facts.

“A party who receives a judgment in his or her favor should not have that judgment taken away based on a reviewing court’s misapprehension of the law or the facts,” Freeman wrote.

Further, Freeman criticized the majority for essentially staking out its constitutional turf in a “strained” and overly simplistic approach to a more complex matter.

“Admittedly, this case comes to us with an unusual procedural background,” Freeman wrote. “Unfortunately, instead of simply applying section 2-1401 as the legislature intended to achieve justice, the court needlessly muddies the waters with strained constitutional discussion to support its mistaken course.”

In response to the dissent, however, the majority said its decision doesn’t do anything to prevent the smoker plaintiffs from obtaining “justice and fairness” – it merely directs them to seek the correct remedy, which, they said, in this case would involve moving to ask the state Supreme Court to recall its mandate and reopen the case.

The justices said they would make no comment on the potential “merits of a motion to recall the mandate, should such a motion be filed in this court at a future date.”

“This remedy permits ‘justice and fairness’ to be achieved, and it does so in a way that does not require ceding the authority of our reviewing court to the circuit courts,” the majority said. “There is no need, therefore, to embrace an interpretation of section 2-1401, as the dissent does, that upends the judicial hierarchy and that flies in the face of common sense.”

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