Approximately 50 court cases are pending, wherein plaintiffs are seeking damages from leading United States cigarette manufacturers. The litigation involves alleged cancer and other health maladies directly resulting from cigarette smoking. Philip Morris was a defendant in 23 actions pending as of March 1, 1991, compared with 24 at the same point in 1990 and with 32 in 1989.
The number of court cases appears to have stabilized. Philip Morris's primary defense tactic has been based on seeking a preemption of liability based on the Federal Cigarette Labeling and Advertising Act. Five federal courts have naled that the cigarette labeling act does protect cigarette manufacturers from some liability claims. Conversely, the Supreme Court of New Jersey and one of the Texas appellate courts ruled that the cigarette labeling act does not limit the liability of the cigarette manufacturers.
As with any court case the outcome is uncertain. Afindingin favor of the plaintiff would have the effect of denying preemption of liability on the basis of the existence of he ciga- rette warning labels. This could entice additional litigation against cigarette manufacturers Philip Morris remains confident that, even in this worst-case scenario,the lawsuits will not pose a substantive threat to its overall financial health.