Philip Morris USA Inc. v. Scott

Background

The dispute began when a group of Louisiana smokers sued several tobacco companies, saying the companies had misled the public about nicotine's addictiveness. A Louisiana Court of Appeal ordered the companies to pay $241,540,488 plus about $29 million in interest to create a ten-year smoking-cessation fund for class members. The state high court declined review. The tobacco companies asked Justice Scalia, acting as the circuit justice, to pause enforcement of that judgment while they seek review from the Supreme Court.

Reasoning

Justice Scalia evaluated whether the case raises a serious constitutional question about class actions and due process. The key issue was that the appellate court treated the alleged fraud as affecting the entire public knowledge, eliminating the usual requirement that each person prove they relied on the companies' misrepresentations. Scalia explained that this could let people who could not win on their own recover simply because their claims were bundled together. Applying the three-part test for a temporary pause, he found it reasonably likely the Court would take the case, that reversal was a significant possibility, and that the companies would suffer irreparable harm if the fund were spent before review. He also found the balance of harms favored a pause because the smoking programs could be obtained elsewhere in Louisiana and some administrative fees would otherwise be spent irretrievably.

Real world impact

The stay blocks enforcement of the multi-hundred-million dollar award and pauses immediate payments and program spending while the Supreme Court considers review. This protects the companies from having irreversible expenditures made before their claims are heard, but it also delays delivery of smoking-cessation services to the class. The ruling is temporary: it preserves the status quo while the Court decides whether to take and then resolve the constitutional question.