Big Win for Big Tobacco in Florida

A $145 billion jury verdict is reversed as an appeals court rules it shouldn't have been a class.
By Paula Lacê ,

Updated from 12:31 p.m. EDT

A Florida appeals court threw out a $145 billion judgment against five big tobacco companies, saying the so-called Engle case should never been a class-action suit.

A panel of three judges decertified a 700,000-smoker class, saying they could not be grouped together in a class action, according to media reports. The ruling cancels a 2000 verdict that held the companies were guilty of misleading smokers about the risks of tobacco and were responsible for their illnesses and deaths.

The claims must now be decided on an individual basis, the court said.

Along with

Altria's

(MO) - Get Report

Philip Morris were cigarette makers

R.J Reynolds

( RJR), Lorillard Tobacco, a unit of

Loews

( LTR), Liggett Group, a division of

Vector Group

(VGR) - Get Report

, and Brown & Williamson, a unit of

British American Tobacco

(BTI) - Get Report

.

The appeals court described the proceedings leading to the billion-dollar award as "tainted by class counsel's misconduct" and unconstitutional. The panel agreed with the tobacco companies' arguments that the award would bankrupt the entire industry.

Shares of Altria were trading 9% higher at $38.19; Loews shares were gaining 5% at $44.28; R.J. Reynolds was up 6% at $33.75; Vector shares rose 7% to %15.24; and British American Tobacco was up 8% at $21.34.

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