Philip Morris says it will strip claims of "lowered tar and nicotine" from packages of its Marlboro Lights, just weeks after a judge ordered it to pay $10.1 billion (6.4 billion pounds) for deceiving people into thinking these cigarettes were safer than regular ones.
Philip Morris USA, the U.S. cigarette unit of Altria Group, revealed the move on Tuesday, but said it had made the decision before the Illinois class-action judgment.
The company said its decision was in response to a 2001 National Cancer Institute report, which found no health benefit from smoking low-tar cigarettes instead of regular ones.
Philip Morris USA will remove the words "lowered tar and nicotine" from packages of its popular Marlboro Lights and delete references to low tar on other cigarettes, spokesman Brendan McCormick said. The company hopes to complete the change by the end of the year.During the trial, plaintiffs' lawyers argued that smokers chose light cigarettes with the idea that they pose fewer health risks.
Lawyers for the plaintiffs said on Tuesday that Philip Morris USA had revealed during a closed-door court hearing that it would take "lowered tar and nicotine" off packages of Marlboro Lights.Shares of Altria climbed as much as 4.5 percent on Tuesday after the judge in the case slashed the bond Philip Morris USA must post before appealing the ruling, removing any immediate fears the unit would have to file for bankruptcy protection.
Late on Monday, Madison County Circuit Court Judge Nicholas Byron cut the appeal bond to a $6 billion term note that Altria owes Philip Morris USA, plus hundreds of millions in other deposits. The original bond, to protect the company's assets from being depleted by plaintiffs during the appeals process, had been set at $12 billion.
On March 21, Byron found Philip Morris USA deceived smokers into thinking Marlboro Lights and Cambridge Lights cigarettes were safer than regular cigarettes and ordered the top U.S. cigarette maker to pay $10.1 billion in damages.
With the lowered bond in place, Philip Morris USA can now go ahead with its appeal of the decision and the certification of the class in the case.
Stephen Tillery, a lead lawyer for the plaintiffs in the Illinois case, said Philip Morris USA's decision to remove the controversial words from some packages "validates the landmark consumer fraud judgment against the company."Altria shares were up $1.06 at $32.54 in midday New York Stock Exchange trade after climbing to $32.90 earlier in the session. The stock sank to a 2 1/2-year low of $27.75 late last month due to credit concerns surrounding the highly-watched "lights" class-action case.