Tobacco: Butting Out a Lawsuit

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A legal cloud that has hung over U.S. tobacco companies for years lifted slightly last week. In Philadelphia, a federal appeals court ruled that Philip Morris, the Liggett Group, the Loews Corp. and Loews Theatres did not have to compensate Antonio Cipollone for the death of his wife Rose, a pack-a-day smoker who died of lung cancer in 1984. The court's reason: cigarette-package health warnings that are mandatory under federal law protect the tobacco giants from claims that they fail to provide adequate notice of smoking's hazards. The decision in the liability lawsuit may affect almost 100 pending civil actions against the tobacco companies. On Wall Street, shares of tobacco's Big Three, which had been depressed by the imminent litigation, shot up by $3.50 to $9 after the decision was announced.