November 22, 2008 - SANTA FE, N.M. - The New Mexico Court of Appeals has revived a class-action lawsuit against several cigarette makers for allegedly engaging in a price-fixing conspiracy.
The ruling Tuesday, November 18, 2008 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 appeals court said that was improper for the claims against some of the companies -- Philip Morris, Reynolds and Brown & Williamson Tobacco Corp.
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.
Reference: NM court revives case against cigarette makers Appeals court rules for NM consumers in price-fixing lawsuit against several cigarette makers, Associated Press - CNNMoney.com, 11/19/2008 and New Mexico appeals court revives smoking lawsuit, JOURNAL STAFF AND WIRE REPORT, Winston-Salem Journal, 11/21/2008.