Tobacco Stocks Fall on Class Ruling

A federal judge certified a punitive damage class-action lawsuit against tobacco companies, in a decision that could broaden the number of plaintiffs and compensation paid by the industry.

On Thursday, U.S. District Court Judge Jack Weinstein said the class would include of all smokers who have been diagnosed with a variety of illnesses, including lung cancer, emphysema and some forms of heart disease between Apr. 9, 1993 and a time when the class is to be notified of the certification.

The class excludes smokers who have already gotten judgments or settlements against the industry.

The case will be appealed to the Second Circuit Court of Appeals for a ruling. Philip Morris (MO Quote) said it would ask the appeals court to reject the judge's decision, which it believes has ignored past rulings.

"It's important to understand that every element of Judge Weinstein's rationale for this decision has been considered -- and rejected -- by higher federal courts across the country," said William Ohlemeyer, vice president and associate general counsel of Philip Morris.

Tobacco stocks fell on the news. Philip Morris lost $2.01, or 4.5%, to $42.69, R.J. Reynolds (RJR Quote) dropped $3.23, or 6.4%, at $47.22; Loews Group (LTR Quote) sunk $1.58, or 3.3%, to $45.97, and British American Tobacco (BTI Quote) shed 28 cents, or 1.3%, to $21.87.