A $270 million tobacco verdict in Lousiana might be in trouble, as U.S. Supreme Court Justice Antonin Scalia has ordered the action stayed while the high court mulls adding it to its schedule. In a 5-page opinion issued late Friday, Scalia said the Louisiana courts may have erred by refusing to allow Philip Morris and other cigarette companies to question individual plaintiffs about whether they relied on false statements to continue smoking. Since it is “significantly possible that the judgment below will be reversed,” Scalia said, he would exercise his seldom-used power to stay the action until the court takes it under review.
The class action was cleverly constructed to consist only of Louisiana smokers, and sought money for smoking-cessation programs instead of individual cash payments. That relieved the lawyers of proving that individual smokers actually believed cigarette marketing materials more than the U.S. Surgeon General’s explicit warning on every pack of cigarettes that the products could kill them. Apparently I’m not the only one who finds this question interesting; Scalia, in his opinion, noted that “the court eliminated any need for plaintiffs to prove, and denied any opportunity for applicants to contest, that any particular plaintiff who benefits from the judgment (much less all of them) believed applicants’ distortions and continued to smoke as a result.”
Scalia also appears to be itching for a fight over class actions in general. He discusses how Congress has passed laws to rein in class actions, including the Class Action Fairness Act of 2005 that granted federal courts jurisdiction over all class actions seeking more than $5 million unless two-thirds of the plaintiffs resided in one state. Evidencing a concern for due process that he doesn’t always show — including when it comes to punitive damages — Scalia said the court can’t ignore the federal rights implicated when state courts deny defendants their rights in class actions. He used his power as a circuit judge on the Fifth Circuit in New Orleans to sweep in on behalf of Philip Morris to halt enforcement of the judgment.
Making the tobacco companies pay $270 million would cause immediate damage, he said, because they might not recover all their money if they win on appeal, especially the $11 million in administrative fees to set up the smoking-cessation plans. The plaintiffs and lawyers seeking tens of millions of dollars in fees, meanwhile, can wait to see what happens at the Supreme Court.
Refusing a stay may visit an irreversible harm on applicants, but granting it will apparently do no permanent injury to respondents. Applicants allege that similar smoking-cessation measures are freely and readily available from other sources in Louisiana, and respondents have not disputed that. Under those circumstances, the equitable balance favors issuance of the stay.
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