Judge Reinstates $12-Billion Appeal Bond for Philip Morris

A state court judge in Illinois on Friday reinstated the $12-billion appeal bond that Philip Morris USA must pay to prevent seizure of its assets while it appeals a $10.1-billion judgment in a class-action case. However, Circuit Judge Nicholas Byron also granted a 60-day stay to allow the tobacco giant to appeal the bond to the Illinois Supreme Court.

Byron initially set the bond at $12 billion at the time of the March verdict in which he found Philip Morris guilty of fraud for concealing the risks of “light” cigarettes. He later lowered the bond to $6.8 billion based on concerns that the higher amount might bankrupt the company.

But an Illinois appeals court last month forced Byron to reinstate the original amount, finding that he lacked discretion to set the bond below the total of the judgment plus interest. Now Philip Morris will try to convince the state’s highest court that Byron did have authority to order the lower bond.

There were two other developments Friday in the legal wars over smoking:

A Philadelphia jury exonerated Brown & Williamson Tobacco Corp., the No. 3 U.S. cigarette maker, of responsibility for the death of a longtime smoker of one of the company’s low-tar brands.

And in Los Angeles, Superior Court Judge Victoria Gerrard Chaney refused to grant Philip Morris a directed verdict and set Sept. 22 for retrial of a fraud claim against the firm.

A Superior Court jury last month exonerated Philip Morris on five of six claims filed by lung cancer victim Fredric Reller. But the jury deadlocked 6 to 6 on a sixth count of fraudulent concealment, setting the stage for another trial on that count.

-- Myron Levin