Summary
A win in the U.S. Supreme Court would bring at least temporary relief to cigarette makers. But the odds are against the Court taking the case, and even if Philip Morris did win in Court, the FDA might use its newly expanded powers to regulate them anyway.
Analysis
Cigarette manufacturers have engaged in legal "attrition" since the first lawsuits against them were brought in the 1950s. The federal court that found members of the industry liable for RICO violations unearthed documents showing that advisors recommended litigation to the nth degree, sometimes only in order to drain the opposing side of their resources (United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1 (D.D.C. 2006).
The litigate-to-the-end strategy kept the cigarette industry healthy for many years, but there is evidence to suggest that this strategy is not as successful a bulwark as it once was. The U.S. Supreme Court handed Philip Morris a blow several months ago when it upheld a punitive damages verdict against the company (See Philip Morris v. Williams). And Congress just passed Public Law 111-31 June 22, 2009, which gives the Federal Drug Administration new power to regulate cigarette manufacturers.
In any case, the chances of the U.S. Supreme Court hearing Philip Morris' case are against them. The Court reviews thousands of petitions for certiorari each year, and only grants about one percent of them. While it is true that cigarette manufacturers have a better history of getting their cert petitions granted than most, the odds still seem stacked against them.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
