Altria: Smoke Gets In Your Eyes (MO)
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 planiffs can show that the tobacco companies planned the whole thing, the suit might take on racketeering status, which could triple damages.
Altria, the parent of Philip Morris, watched its stock drop almost 5% on the news, down to $78.65. 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 on-coming train.
While all large suits represent some exposure, Wall St. is clearly not gambling the there will be a full reversal of the way the judicial system views the liablilites involved in cigarette smoking. Tobacco may be a dirty business, but, so far, the actions of cigarette companies are not viewed as criminal.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies that he writes about.
The suit seeks up to $200 billion in damages. If the planiffs can show that the tobacco companies planned the whole thing, the suit might take on racketeering status, which could triple damages.
Altria, the parent of Philip Morris, watched its stock drop almost 5% on the news, down to $78.65. 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 on-coming train.
While all large suits represent some exposure, Wall St. is clearly not gambling the there will be a full reversal of the way the judicial system views the liablilites involved in cigarette smoking. Tobacco may be a dirty business, but, so far, the actions of cigarette companies are not viewed as criminal.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies that he writes about.
posted by douglas mcintyre at 11:37 AM
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