Jump to full article: New York Times, 2010-06-28
Author: DUFF WILSON
Intro: The Supreme Court announced Monday it would not take up either government or industry appeals of a landmark racketeering verdict against cigarette companies for what a judge had termed a half century of lying over the health effects of smoking.
The court's action surprised analysts on both sides of the issue and pushed tobacco stocks sharply higher.
"What a relief," CreditSuisse titled a note to investors. . . .
Thilo Wrede, industry analyst for CreditSuisse, said in an interview, "If the decision would have been the other way, you would have seen a headline saying a $280 billion case is open again. The stocks would have seen a comparable downward move if not more."
Edward L. Sweda, chairman of the Tobacco Products Liability Project at the Northeastern University School of Law in Boston, said the decision was mixed.
"Obviously we're disappointed because we would have liked to force the companies to disgorge their ill-gotten gains," he said. "But we're delighted with upholding the judge's basic finding that the major tobacco companies are in fact adjudicated racketeers. Now that is established as historical fact." . . .
David J. Adelman, tobacco analyst for Morgan Stanley, had expected the court to accept the case but not to force disgorgement because that could have ruined the companies. "The ultimate prospect of a large-scale disgorgement award has been eliminated," Mr. Adelman wrote on Monday.
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