March 20, 2003

Chamber Criticizes Class Action in Madison County, IL

WASHINGTON, D.C., March 21, 2003 – The United States Chamber of Commerce derided a Madison County, Illinois, court for certifying a class action case that resulted in a multi-billion dollar award against the Philip Morris tobacco company.

“Madison County is the epicenter of class action filings in America,” said Thomas J. Donohue, President and CEO of the U.S. Chamber. “This case should go down in the history books as the poster child for venue abuse.”

Madison County has a reputation for being a jurisdiction of choice for filing class actions and more are filed in that county on a per capita basis than virtually anywhere else in the United States. While nearly all companies named in class action cases in Madison County have eventually settled, the Philip Morris case is the first to be tried to verdict.

At issue is a case before the Illinois Third Circuit Court in which five named plaintiffs, representing an estimated 1.1 million smokers, allege they were misled into thinking low-tar cigarettes were more healthful than regular cigarettes. The plaintiffs should not have received class certification, according to the Chamber.

Over a century of legal precedent makes clear that the Due Process Clause, the Commerce Clause, the Full Faith and Credit Clause, and principles of state sovereignty embodied in the U.S. Constitution prohibit the courts of a single state from applying their own law to regulate conduct and transactions that take place in other states.

Since Illinois law does not require a jury in consumer fraud proceedings, Judge Nicholas Byron ruled to grant the class $7.1 billion in compensatory damages and $3 billion in punitive damages. Trial lawyers representing the class are seeking 25 percent of the compensatory award – or almost $2 billion for their services.

“This is a case that should have never been certified as a class action in the first place,” Donohue added. “Trial lawyers can drag any company with perceived deep pockets into the plaintiff-friendly district of Madison County and come out instant billionaires. It’s an obscene and disgraceful travesty of justice.”

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