Top US Court Won't Revive $10 Billion Altria Award [Bloomberg]
Summary: The U.S. Supreme court upheld a previous Illinois court decision and declined to award $10 billion to light cigarette smokers who sued the Altria Group for misleading them about the relative safety of the product. The Illinois decision had declared that consumers could not invoke a state consumer protection law against products already authorized by the Federal Trade Commission. This decision has protected R.J. Reynolds Tobacco and other cigarette
makers from similar lawsuits. Analysts predict that this outcome will aid the company in other lights lawsuits currently pending in addition to smoothing the way for the Kraft spinoff announced earlier in the month. Altria shares rose 1 cent to $83.76 on Monday morning. The company will seek to recoup $6 billion it had placed in an escrow during the appeal
Related links: Media coverage: MarketWatch , CNN , Houston Chronicle. Commentary: Altria Stock Jumps on Judge's Ruling Against Smokers • Kraft Divestiture News Eases Investor Concerns • The Tobacco Empire Strikes Back • Light Cigarette Suit Could Exact a Heavy Price on Tobacco Companies . Conference call transcripts: Altria Group Q3 2006 .
Potentially impacted stocks and ETFs: Altria (MO) Competitors: Kraft Foods (KFT), Reynolds American (RAI), Carolina Group (CG), Loews Corporation (LTR) • ETFs: WISDOMTREE H-Y EQ TR (DHS), MORNINGSTAR DV (FDL), ISHARES DOW SEL DIV (DVY).
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