Illinois Judge Denies Class-Action Request in Tobacco Case

A federal judge in Illinois rejected a request to grant class-action certification to a lawsuit against a group of tobacco companies, Philip Morris (MO) said Tuesday.

U.S. District Court Judge Ronald Guzman said the definition of the proposed class, as well as its demands, weren't feasible. The plaintiffs are suing several tobacco companies, including Phillip Morris and R.J. Reynolds (RJR), as well as their public relations firms.

The proposed class included former and current smokers who are Illinois residents who began smoking as minors. The proposed members of the class wanted to participate in smoking cessation or medical monitoring programs, and have them paid for by the defendants.

Since potential class members would have smoked or had been smoking for different periods of time and would be in various states of health, the class would be too diverse to prove its own claims, the judge found.

"In order to prove each of their claims, the plaintiff must demonstrate a causal connection between the alleged misconduct and the damages -- namely that the defendants' deceptive advertising caused each class member to smoke. On a class-wide basis, this will be impossible to prove," Guzman wrote in his opinion.

Phillip Morris, a component of the Dow Jones Industrial Average, was naturally pleased with the ruling. "Judge Guzman, like all other federal judges to consider this issue, realized that the facts and law simply do not warrant class-action lawsuits by smokers," the company said in a statement.

Court victories mean a lot to the tobaco industry, said Ann Gurkin, an analyst with Davenport. "It's a positive ruling for the tobacco companies," she said. "This is the fifteenth class-action case that has not been certified. Typically, the stocks have reacted favorably."

The tobacco sector got another boost Tuesday, when a U.S. District Court in Connecticut found that third-party payers, such as union health and welfare funds, are too far removed from injuries to be able to sue. Seven U.S. appeals courts have rejected these third-party suits.

At the close of New York Stock Exchange trading, Phillip Morris gained $1.98, or 4.4%, to $47.23. R.J. Reynolds was up $1.13, or 2.1%, to $55.98.

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