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Tuesday, November 18, 2008
NM Court Revives Case Against Cigarette Makers
Associated Press
SANTA FE — The state Court of Appeals has revived a class-action lawsuit against several cigarette makers for allegedly engaging in a price-fixing conspiracy.
The ruling on Tuesday overturned a 2006 decision by a Santa Fe County district court against New Mexico consumers who brought the damage lawsuit against tobacco companies, including Philip Morris Inc. and R.J. Reynolds Tobacco Co.
Before the class action lawsuit went to trial, District Judge James Hall granted summary judgment in favor of the tobacco companies.
However, the Court of Appeals said that was improper for the claims against some of the companies — Philip Morris, R. J. Reynolds and Brown & Williamson Tobacco Corp.
The court upheld a portion of Hall's decision in favor two other cigarette manufacturers, Lorillard Tobacco Co. and the Liggett Group.
The lawsuit alleged a conspiracy by the tobacco companies to fix prices to wholesale distributors through a series of increases starting in 1993, when manufacturers of premium cigarettes — such as Philip Morris and its Marlboro brand — were losing market share to generic and other discount cigarettes.
The Court of Appeal ruled that economic testimony from the consumers' expert witness provided an adequate legal foundation for the lawsuit to move ahead against the companies other than Lorillard and Liggett. The witness testified that it was "highly unlikely that independent competitive behavior explained" the cigarette price changes.
Copyright ©2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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