The tobacco industry won a big victory after an appeals court in New York rejected the class-action status of a potentially costly lawsuit.
The lawsuit, known as the “Schwab Case,” for the lead plaintiff, Barbara Schwab, sought $280 billion damages on behalf of up to 50 million Americans. The plaintiffs claimed they were misled into thinking “light” cigarettes are safer than regular ones.
For tobacco bondholders, the ruling yesterday eliminates another legal hurdle for the tobacco companies.
The case was certified in 2006 by federal Judge Jack B. Weinstein and sought to combine the claims of all smokers of “light” cigarettes, nationwide. The defendant tobacco companies included Altria’s Philip Morris USA, Reynolds American, Lorillard, and British American Tobacco.
The trial was originally scheduled to begin early last year but was stayed by an appellate court pending the defendant’s challenge to the original plaintiff class certification. In its decision, the federal appeals court found the overall class too broad, and its members claims too individualized, to meet criteria for class certification.
This rejection reinforces the pattern in recent years of the failure of class-action suits to represent the claims of smokers against America’s largest tobacco companies.