U.S. Supreme Court Declines Review Of Scott Case

Philip Morris USA said today that the United States Supreme Court has declined review of the Scott case, a Louisiana class-action judgment which ordered the nation’s major cigarette companies to fund a statewide 10-year smoking cigarettes cessation program. The decision by the Court today followed a stay of the judgment by the United States Supreme Court in September 2010.

“Philip Morris USA is disappointed that the Court declined to hear our arguments because we believe the decision in this case rests on a series of constitutional violations and is fundamentally unfair,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of PM USA. “It's important to note that Philip Morris USA prevailed on the largest claim, medical monitoring, and that the original verdict has been subject to appeals for seven years. The judgment today is less than a quarter of what the court originally awarded, but still has been calculated without regard to the likely number of class members who will be interested in participating in the program.”

Today’s decision lets stand 2010 and 2007 decisions by the Louisiana Fourth Circuit Court of Appeals ordering defendants to fund a statewide 10-year smoking cigarettes cessation program at the cost of $241 million, plus approximately $37 million in interest (calculated from July 21, 2008). The lawsuit was filed in 1996.

Philip Morris USA, as one of four defendant cigarettes companies, is responsible for 25 percent of the judgment, which will be deposited into court. A third party administrator will be appointed by the court to administer the cessation program.

As of March 2011, Philip Morris USA has recorded $26 million in connection with the case and has recorded additional provisions of approximately $3.7 million related to accrued interest.