A highly anticipated legal ruling went in favor of the tobacco industry Thursday, as the supreme court of Florida upheld a decision to disallow a massive punitive-damages award against cigarette makers.
Because of the ruling, companies like Altria (MO - Get Report), the parent of Philip Morris, Reynolds American (RAI - Get Report), Loews (LTR) and Vector Group (VGR - Get Report), won't have to pay $145 billion in punitive damages in a lawsuit known as the Engle case.
The Florida supreme court agreed with a lower-court ruling that the case shouldn't have been certified as a class action and said the award was excessive.
The case goes back to 1994, when a doctor named Howard Engle and a small group of other plaintiffs sued the tobacco companies. The case eventually went to trial, ending in 2000 with a jury saying cigarette manufacturers had lied about their products and deciding to assess the huge monetary penalty.An appellate court threw out the $145 billion award in 2003. Shares of Altria surged 7.3% to $78.71 when the decision became known. Reynolds American was up 4.8% to $119.85, Vector rose 4% to $17.04 and Loews advanced 2% to $36.22.