$2M left in Arkansas smoke suit cash

After paying out more than $20 million to over 20,000 former Marlboro Lights customers, a $45 million Arkansas settlement fund has $2.2 million left over, money that must be spent on public service.

The settlement was paid last year to end a 14-year-old lawsuit against the Marlboro Lights manufacturer over how the cigarettes were marketed in Arkansas.

Consumers who bought Lights and companion brand Ultra Lights in Arkansas over a 38-year period were eligible for refunds of 10 cents to 25 cents per pack purchased.

The only condition Philip Morris USA set on the settlement was that the money could not be used to disparage the company. The terms of the settlement leave the decision on where the rest of the money goes up to Pulaski County Circuit Judge Tim Fox.

A recent federal court decision establishes how that money can be used, requiring both that it be put to use in a manner benefiting the entire class of plaintiffs and that those 20,407 claimants get a chance to recommend to the judge how it should be spent.

There's money left in the fund because administrative costs make doling out more to the claimants economically unfeasible, the judge ruled.

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Last month, he raised the minimum payout per applicant from $100 to $400, at a cost of $2.1 million and affecting 9,374 claimaints, most of whom got only the $100 minimum.

There are expenses and fees yet to be paid from the settlement fund, but so far the lawyers have received $20.8 million while administrative costs have reached $427,157, court filings show.

Little Rock attorney Tom Thrash, who filed the lawsuit in 2003, said he will begin polling the claimants for the court once the judge approves the wording on the proposed notice to be mailed out. Thrash submitted the notice on Friday. The survey results are due to the judge around Thanksgiving.

The lawyers have recommended giving the money to Arkansas cancer and health charities.

But Fox, writing in a recent order, said that court precedent indicates to him that the most appropriate use of the money appears to be funding needs-based scholarships at Arkansas' two law schools, particularly for those who commit to pursuing public-interest litigation, like the Marlboro Lights suit.

Fox wrote that the Lights litigation appears to be unprecedented in Arkansas history, so he had to turn to the federal courts for guidance on how the leftover money must be spent.

Fox stated that he relied on a 2015 8th Circuit Court of Appeals ruling, Oetting v. Green Jacobson, P.C., that states such monies must be used for "indirect class benefit" and "for uses consistent with the nature of the underlying action and with the judicial function."

The Arkansas lawsuit was one of several nationwide that challenged the legality of Marlboro's marketing practices, claiming that Philip Morris had deceived customers by claiming the Lights brand introduced in 1970 was healthier than other brands.

Regulators forced cigarette makers to stop describing their products as "light" in 2010, a move many ascribed to the attention brought to tobacco manufacturers' advertising practices by the litigation.

Philip Morris denied wrongdoing and won almost all of the lawsuits. Arkansas' case was the last one when the company agreed to the settlement shortly before the suit was to go before a jury last summer.

Metro on 09/04/2017

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