Tobacco firms dodge massive payout
A US supreme court has refused to reinstate a USD145bn punitive award granted by a jury six years ago for the damage caused to smokers' health by America's five biggest cigarette makers.
Tobacco firms had claimed it would drive them out of business; the supreme court's ruling sent their share prices up sharply.
The 79-page ruling said the size of the award would "result in an unlawful crippling of the defendant companies", adding: "We unanimously conclude that the punitive damages award is excessive as a matter of law."
The judgment said Florida's smokers, estimated at 300,000 to 700,000, should not have been allowed to bring a class action but should have sued on a case-by-case basis.
This upheld a decision by the state's appeal court three years ago.
Shares in Altria, which makes Marlboro cigarettes, jumped 5.1pc to USD77.05 on the news, the biggest climb in the Dow Jones index. Altria is planning to demerge its tobacco and food businesses, and its chief executive, Louis Camilleri, had said the transaction depended on the Florida case. Brown and Williamson rose by 5pc.
In London, BAT rose by 36p to ?14.16, and Gallaher rose 14.5p to 863p.
