Altria Group Inc (MO)

[EZ2]

Sector Snap: Big Tobacco
Tuesday February 20, 12:19 pm ET
Tobacco Stocks Sag As Supreme Court Stops Short of Ruling Damages Were Excessive

NEW YORK (AP) -- Shares of tobacco companies slumped Tuesday after the Supreme Court tossed out a $79.5 million ruling against Altria Group Inc., but stopped short of limiting how much money juries can award plaintiffs.
Altria's Philip Morris business, which makes cigarette brands including Marlboro, Parliment and Benson & Hedges cigarettes, challenged $79.5 million awarded by an Oregon jury to the widow of a smoker who died of lung cancer.

The punitive damages, or the damages punishing the company, were 97 times the damages awarded to the widow for her suffering. At issue in the case was how closely punitive damages must resemble the actual harm suffered by the plaintiff.

In a 5-4 decision, the Supreme Court overturned the verdict. However, the court didn't rule that the award was excessive, which was what Big Tobacco hoped for. Instead, the court ruled the jury wasn't instructed properly and didn't realize it couldn't consider damage caused to smokers other than the plaintiff's husband.

"They answered one question, but not the big question," said Standard & Poor's analyst Raymond Mathis. "It's a big win for tobacco, but not as decisive a win as the industry might have hoped."

Shares of Altria fell 20 cents to $86.

Shares of Reynolds American Inc., Winston-Salem, N.C.-based maker of Camel, Kool and other brands, slipped 27 cents to $63.67.

New York-based Loews Corp.-Carolina Group, which makes Newport, Kent and other brands, gave up 59 cents to $72.34.

Vector Group Ltd., which makes Liggett Select and a variety of private label brands, fell 2 cents to $18.82 on the New York Stock Exchange. American depositary shares of London-based British American Tobacco PLC, which makes Lucky Strikes and Pall Mall fell 32 cents to $61.56 on the Big Board.