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Thursday, September 14, 2006

Just When Big Tobacco Thought It Was Safe To Go Back In The Water (MO)

So-called "light" cigarettes were supposed to be safer for smokers that unfiltered "coffin nails" like Lucky Strike.

A suit in federal court says that the light cigarette marketing was just a come-on to get more people to smoke and fewer smokers to stop.

The New York Times says that the class action suit is seeking between $20 billion and $200 billion in damages. That's a pretty wide range. You have to wonder how they came up with it. Perhaps it is because the numbers sound so fightening. The reason the plantiffs can go after a number like this is that they are suing under the RICO statute.

Light cigarettes are now about 45% of the total market in the US.

The legal road ahead for the plantiffs may be difficult. Cases that accuse the tobacco companies of liability in smoking related health issues and deaths have been largely unsuccessful. A great deal of the rise in stocks like Altria has been based on the fact that these suits are going away.

However, the "light" cigarette approach may be novel. And, as such, it means that big tobacco still has a way to go before its is out from under the overhang of smoker liability cases.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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