GM Kills $10 Million Facebook Ad Campaign Because It Didn't Work
JCPenney's Ron Johnson: 'Customers Don't Get Our Pricing Strategy'
A federal judge today granted a group "class action" status in a suit that claims the cigarette companies fooled customers by calling some of their products "light." The argument is simple: The big tobacco companies were trying to sell "light" as safer. Smokers figured that it was OK to have a coffin nail if it was manufactured with less poison in it.
The suit seeks up to $200 billion in damages. If the plaintiffs can show that the tobacco companies planned the whole thing, the suit might take on racketeering status, which could triple damages.
Altria Group (NYSE: MO), the parent of Philip Morris, watched its stock drop almost 5% on the news, down to $78.64 as of 1:55 PM. The company has been trading near its 52-week high of $85.00.
With such a big suit, what isn't Altria's stock down more? Because suits filed in the past seeking damages for heath issues arising from smoking have not won big damages from the tobacco companies. Courts and juries have been reluctant to blame the cigarette manufacturers for people's bad habits, especially when each cigarette package says that smoking will kill you faster than stepping in front of an oncoming train.
While all large suits represent some risk, Wall Street is clearly not betting that there will be a full reversal of the way the judicial system views the liabilities involved in cigarette smoking. Tobacco may be a dirty business, but so far, the actions of cigarette companies are not viewed as criminal.
Douglas McIntyre is a partner at 24/7 Wall St.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 1 of 1)
9-25-2006 @ 2:42PM
adele roberson said...
As long as the lawyers make millions of dollars attacking the tobacco companies, these law suits will go on and on.
You would be appalled if you knew how little money the cancer victims actually get.
When the lawyers get enough money, maybe in fifty years or so, someone will have the guts to come out and say that many other things can give you lung cancer, and after a hundred years no one seems to know what gives you kidney cancer, prostate cancer,etc,
No one seems to question the fact that if you get kidney cancer snd have never smoked, what caused the cancer.
I know a nun with skin cancer. She is sixty-three years old and has worn a complete habit since she was 16.
I do not smoke, if you decide to think that way. However, here in Texas the lawyers contribute very heavily to Judge's campaigns. I distrust these people. They just take advantage of the general public.
9-25-2006 @ 5:40PM
Ruth Worthington said...
In cleaning out a cabinet recently, I
found an OD colored plastic bag of C-
rations given to the soldiers during
World War II courtesy of Uncle Sam. On the label was a list of the contents. Included in the rations were
several cigarettes. The bag was unopened and the recepient never
smoked, but I wonder how many soldiers began smoking as a result of
the US government's generosity!