A $45 million settlement submitted to Pulaski County Circuit Judge Tim Fox on Friday will go to pay smokers who bought Marlboro Lights cigarettes in Arkansas over a 31-year period, while also ending 13 years of litigation against tobacco manufacturer Philip Morris USA.
The deal comes three days before a six-week trial would have started in a class-action lawsuit over whether the company violated the Arkansas Deceptive Trade Practices Act in its marketing of the Lights brands: Lights and Ultralights. They are now sold as the Silver and Gold.
Those eligible to apply to be part of the class are smokers who bought the brands in Arkansas between Nov. 1, 1971, when the Lights brand was introduced, and May 29, 2003, the effective date of the lawsuit.
Plaintiffs in the suit had accused the cigarette company of running a misleading advertising campaign that deliberately duped consumers.
Arkansas is the only state where Philip Morris has agreed to settle such litigation, Little Rock attorney Tom Thrash said.
The tobacco company has prevailed in similar litigation in other states, he said.
The litigation does not involve health claims or injuries that could be attributed to smoking. The lawsuit sought to force the cigarette-maker to refund the cost of every pack of its Lights brands sold in Arkansas for the 31½-year period.
The settlement between the cigarette company and plaintiffs was broadly outlined in a one-page memo signed by Thrash for the smokers and John Massaro, the Washington, D.C., lawyer for the tobacco company. Attorney Megan Hargraves with the Mitchell Williams firm of Little Rock represents Philip Morris in Arkansas.
The lawyers now will begin establishing the process for how potential claimants can apply for a share of the funds, how their claims of tobacco use will be validated and the time frame for paying out the money. The $45 million also will pay the costs of that process and attorneys fees, which will be decided by the judge.
The arrangement, which Thrash said will be delivered to Fox by Aug. 15, also must be approved by the judge.
Questioned by Fox, Thrash said he expected that it would take a month -- once the judge has approved the process for establishing claims -- for an advertising campaign to notify consumers they can apply for payment, then 90 days to accept payment applications.
Some more time will then be required to evaluate the validity of the claims, he told the judge, promising that assessing claims applications would be a "very transparent process."
He said he did not expect any payments to go out until early next year.
Thrash said Friday that he was excited to be closing out the case.
He said does not know how many smokers could make a claim on the money, but the parties have estimated there could be more than 1 million eligible consumers.
Philip Morris spokesman Brian May in Virginia said the company also was glad to resolve the case after so many years.
"After over a decade of litigation in this case, we're pleased to put it behind us and believe the agreement is in the best interest of the company," he said.
Trial courts in Arizona, Hawaii, Kansas, New Jersey, New Mexico, Ohio, Oregon, Tennessee, Washington and Wisconsin have refused to grant class certification or have dismissed similar class-action allegations.
Most recently, a Massachusetts judge ordered Philip Morris to pay $15 million -- $4.9 million in damages, $10.2 million in interest -- after ruling for plaintiffs in a similar lawsuit in that state. That litigation was 17 years old.
The ruling was seen as a defeat, as plaintiffs were seeking $600 million.
That money will go to all residents of Massachusetts, Connecticut, Maine, New Hampshire, New York, Rhode Island and Vermont who purchased Marlboro Lights regularly in Massachusetts between Nov. 25, 1994 and Nov. 25, 1998.
That's about 197,000 plaintiffs, who will get $25 each plus interest.
In April, a Missouri jury ruled in favor of Philip Morris in a 16-year-old suit that questioned whether its marketing of the Lights brand was honest.
Jurors deliberated for less than an hour before rejecting the lawsuit, which involved a $1.8 billion claim of damages that would have gone to about 400,000 state residents who bought the cigarettes between 1995 and 2003.
Last year, the Illinois Supreme Court overturned a $10.1 billion verdict against Philip Morris by 1.4 million Illinois smokers who said they'd been deceived into believing light cigarettes were safer.
The case was the first of the lawsuits to go to trial; a jury sided with the plaintiffs in 2003. That verdict was overturned by the Illinois high court, but an unrelated 2008 U.S. Supreme Court ruling gave the plaintiffs new grounds for an appeal, which saw the verdict reinstated until the November decision by the Illinois Supreme Court.
The Arkansas suit was filed in April 2003, but the proceedings were delayed while jurisdiction questions raised by the tobacco company were settled, including the four years it took for an issue to be resolved by the U.S. Supreme Court.
The high court returned the lawsuit to the circuit court in 2007, but the proceedings were delayed another year after the company failed in a bid to have the case transferred to federal court under a different law.
Fox granted the suit class-action status in 2013, but the resulting appeal to the Arkansas Supreme Court took about a year to be resolved in favor of the smokers in March 2015.
The smokers accused the company, a subsidiary of Virginia-based Altria Group, of misleading consumers about the safety of the cigarettes, by leading smokers to believe the brands had lower levels of tar and nicotine, which made them less perilous than regular cigarettes.
Plaintiffs argued that smokers who bought the Lights brands chose to purchase them believing them to be safer.
According to the suit, lead plaintiffs Wayne Miner of Franklin County and James Easley of Miller County smoked about two packs of Lights a day until learning about the marketing allegations in early 2000. The first two plaintiffs, Lisa Watson and Loretta Lawson, withdrew from the case.
Company officials disputed claims of deliberate deception and wrongdoing, arguing that Lights did what they were advertised to do -- deliver less tar and nicotine -- if they were smoked correctly.
The Lights filters were specially ventilated to reduce tar and nicotine, but smokers could get more by inhaling more deeply or more often, the company stated.
Smokers who used the cigarettes as they were designed got the promised benefit of reduced tar and nicotine, it said.
A Section on 07/30/2016