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    Illinois Panel Calls for Reconsideration of Philip Morris Decision

    Judge Lacked Authority to Reduce $12 Billion Bond, Says Court of Appeals.

    MOUNT VERNON, Ill. -- An Illinois appeals court ruled Monday a state judge must reconsider his decision to reduce the size of a bond Philip Morris USA must post for its appeal of a $10.1 billion lawsuit over light cigarettes.

    The three-judge panel of the 5th District Court of Appeals in Mount Vernon said Judge Nicholas Byron didn't have the authority to reduce the appeal bond from $12 billion to $6 billion. The appeals court will not enforce its ruling for 30 days while Byron reconsiders the case, according to Reuters.

    "The opinion is clear, straightforward and speaks for itself," said Joy Howell, a spokeswoman for Carr Korein Tillery, the Belleville, Ill., law firm representing the 1.1 million Illinois smokers in the lawsuit. Philip Morris, a division of New York-based Altria Group Inc., plans to appeal Monday's decision to the Illinois Supreme Court, said William Ohlemeyer, associate general counsel and vice president for Philip Morris USA.

    "We continue to believe that Judge Byron clearly had the authority to set a bond in an amount that protects the company's right to appeal," Ohlemeyer said, adding that the company could not afford to pay the $12 billion bond. In March, Byron ordered Philip Morris to pay $10.1 billion to smokers for misleading them into believing light cigarettes are less harmful than regular brands.

    Byron also ordered the company to pay $12 billion for the appeal bond, the report said. The amount includes the settlement, plus interest. It's meant to ensure the judgment is paid if the plaintiffs prevail. But Philip Morris said paying the bond would force the company into bankruptcy. Byron reduced the amount to $6 billion, plus $420 million a year for interest and an additional $800 million in cash, payable in quarterly installments.

    But an Illinois Supreme Court rule is clear that Byron had no power to change the bond amount, the appeals court said.

    "The bond requirement is unambiguous," the panel wrote. "The bond shall be in an amount sufficient to cover the amount of the judgment, interest and costs."

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