About 9,500 claimants in a $45 million Arkansas cigarette settlement should expect a second check in the mail under a Friday ruling by Pulaski County Circuit Judge Tim Fox that quadrupled the minimum payout to $400.
The fund, set up last year by cigarette-maker Philip Morris USA to end a 2003 lawsuit about Marlboro Lights advertising, has already sent out $18 million tax-free to 20,521 claimants. The checks were mailed in April.
Of those applicants, 13,035 shared $17.3 million, at $1,325 per application, court filings show.
Fox's ruling Friday addresses the 7,372 claimants -- about 36 percent of the total -- whose applications were deemed faulty and received only the $100 minimum. They will now get an additional $300. Court filings show the procedure to determine the validity of the claims has drawn hundreds of inquiries.
Fox stated that if he held hearings on each questionable application to determine its worthiness, the process would take years and drain money from the fund that otherwise could have gone to the claimants.
"It is not feasible to establish a hearing procedure to adjudicate the more than 7,000 remaining claims," the judge wrote. "It is not in the best interests of the class nor in accordance with principles of judicial efficiency and economy."
If he held hearings, none of the 7,372 claimants could be paid until all of the questionable applications had been examined in court and compensation had been determined for each claimant, the judge wrote.
The necessary hearing process also would take three to 10 years, Fox wrote, citing a study by the settlement fund administrators who calculated the resources needed for the procedure.
Even figuring each proceeding lasted only 30 minutes, the process would take three to 10 years, considering a hearing schedule of one per week to four a week, while accommodating Fox's regular caseload of 1,500 to 1,600 new cases a year, the judge wrote. The costs would run from $1.4 million to $8.8 million.
The additional payments are expected to cost $2,684,313, with $2.1 million coming from the settlement fund and the remainder from unclaimed payments, the judge wrote.
Out of fairness, 2,002 claimants who were paid less than $400 now will be paid the difference to reach the minimum level, the judge ordered.
Applications that the judge deemed flawed were almost all for claims of cigarette purchases by claimants when they were younger than 18 or reports of purchases of more than five packs a day for sustained periods, court filings show.
About 13 percent of the applications that reported purchasing cigarettes by minors involved applicants who reported regularly buying cigarettes before age 12, the judge wrote. Honoring those applications would cost the fund $2 million.
One claimant reported buying cigarettes for 40 years before his birth, while another four reported making purchases for 39 years before they were born, court filings show. A "large number" of the claims alleged they purchased multiple dozens -- sometimes more than 100 packages of cigarettes every day for at least one of the 40-year claim period, the judge wrote.
Michael Woods of Gray filed an objection May 9, about a month after the checks were mailed out. He complained because his payment was reduced to the $100 minimum because his claim included a year of cigarette purchases he made when he was younger than 18 in the early 1970s.
Woods questioned whether those purchases were actually illegal, stating he was never denied cigarettes and that both the elementary and high schools he attended provided smoking areas for students. Woods complained he was being penalized unfairly for filling out the form honestly and that the proper remedy would be to just deduct that year from his total.
A second petitioner, Larry Reed, a 57-year-old prison inmate serving time for robbery convictions in Pulaski and Jefferson counties, also filed a complaint about receiving the $100 minimum.
He also stated it was not illegal in Arkansas for consumers younger than 18 to purchase cigarettes during the first four years of his claim, 1978 through 1981. Reed stated he should receive his full share because 35 years of smoking has left him disabled with cardiovascular disease, hypertension and high blood pressure.
Also submitting a petition for increased payment was Loretta Jane Martin of Jacksonville, who stated all of her cigarette purchases were legal.
Philip Morris paid the $45 million to end a 2003 class-action lawsuit filed in Little Rock about how Marlboro Lights had been marketed in Arkansas. Anyone who bought the brand and its sister brand Marlboro Ultra-Lights could apply for payment.
Applicants were eligible for 10 cents to 25 cents per pack purchased, based on an estimate of their annual purchases between 1971 when Lights went on the market until 2010 when regulators forced cigarette makers to drop the light designation.
Each potential claimant had to submit a sworn statement attesting to yearly cigarette purchases, a list of three retailers where they were purchased and contact information for a verifying witness.
The fund received 26,001 applications after a national advertising campaign last fall.
Metro on 08/26/2017