A federal judge granted class-action status to a lawsuit that could result in up to $200 billion in damages against the major tobacco companies, wire services reported Monday.
The Associated Press and Reuters reported that Judge Jack Weinstein of the U.S. District Court in Brooklyn approved class-action status in the Schwab case. Plaintiffs in the lawsuit say tobacco companies misled smokers into believing so-called light cigarettes are safer than others.
Among the defendants in the case are Winston-Salem-based R.J. Reynolds Tobacco Co., a subsidiary of Reynolds American Inc. (NYSE: RAI), and Greensboro-based Lorillard Tobacco Co. (NYSE: CG).
David Howard, a spokesman for R.J. Reynolds Tobacco, said his company would appeal the decision and ask the 2nd Circuit Court of Appeals to stop proceedings in the case until it had ruled on the appeal.
“We disagree with the judge’s decision to grant class certificatino in this matter,” Howard said. He said that “virtually every smoker of light cigarettes chose their cigarettes for a different reason,” therefore there’s no legal basis to group all lights smokers together.
Other courts around the country, Howard said, have also ruled that lights smokers can’t be grouped together in one class. Weinstein also has a history of certifying class-action claims against the tobacco industry that are reversed on appeal, Howard said.
A spokesman for Lorillard didn’t have a comment.
The class would include potentially anyone who bought cigarettes labeled “light” or “lights,” beginning in the early 1970s, The Associated Press reported.
Attorneys for plaintiffs had argued for class-action status in Weinstein’s court Sept. 13. They have said the plaintiffs could seek the money they had spent over the years on light cigarettes, an amount that could total up to $200 billion.
Cigarette stocks took a dive in early trading Monday when news of the Weinstein’s decision hit the wires. Reynolds American was trading at $60.90 before 10 a.m., down $1.12, or 1.8 percent, from its Friday close of $62.02. The Carolina Group tracking stock that represents Lorillard Tobacco also fell more than a dollar to $54.76, down 2 percent from its $55.88 close on Friday.