WASHINGTON -- Philip Morris recently got the Illinois Supreme Court to overturn a gigantic judgment against it in a suit that had originated in a place -- Madison County, Ill. -- few could locate on a map. The court's ruling resulted in this Wall Street Journal headline: ``Tobacco-Revenue Munis Get a Lift.'' This episode illuminates American governance today.
Philip Morris is America's largest maker of cigarettes, a product legal to use but problematic to merchandize legally. Cigarettes are stigmatized by common sense and all state governments. But because those governments are increasingly addicted to cigarette tax revenues, the governments must be careful not to make cigarettes so expensive they do not sell well.
Madison County, located along a bend in the Mississippi River near St. Louis, elects its judges, some of them very friendly to plaintiffs' lawyers who prosper from class-action lawsuits. In 2003, a county court held that Philip Morris deceived 1.14 million current and former Illinois smokers into believing that cigarettes labeled ``light'' and ``low tar'' are safer than regular cigarettes. Without blaming Philip Morris for any illnesses, the purchasers of these products accused the company of fraud. A Madison County judge exuberantly awarded them $10.1 billion in compensation. The 0.1 was a nice touch, suggesting -- speaking of fraud -- scientific precision.
But the Federal Trade Commission has ratified the use of the light and low-tar labels, and Illinois law sensibly says that companies cannot be penalized for conduct authorized by a regulatory body. So the Illinois Supreme Court, in a 4-2 ruling, vacated the $10.1 billion judgment. Two of the four justices in the majority also argued that the judgment should be overturned because the plaintiffs had not demonstrated that they had been harmed by Philip Morris' actions. That principle could spoil the fun of the asbestos litigation racket, in which some plaintiffs collect even though they have no symptoms of any ailments associated with exposure to asbestos.
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