McLaughlin v. American Tobacco Co.

522 F.3d 215 (2008)

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McLaughlin v. American Tobacco Co.

United States Court of Appeals for the Second Circuit
522 F.3d 215 (2008)

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Facts

Thousands of smokers (smokers) (plaintiffs) filed an action against American Tobacco Company (ATC) (defendant) under the auspices of the Racketeer Influenced and Corrupt Organizations Act (RICO) for deceptive marketing and branding of light cigarettes as a healthier alternative to nonlight cigarettes. The smokers claimed that the deception caused them to buy and smoke more cigarettes at inflated prices. Seeking $800 billion in trebled damages, the smokers successfully moved the district court to certify a class of light-cigarette smokers. The court approved a plan for calculating damages by roughly estimating the percentage of class-member smokers with valid claims and multiplying that number by the estimated average loss of each smoker to reach an aggregated amount of damages for the entire class, which would be deposited into a class fund. Then individual claims would be processed through a proof-of-claim procedure, and any leftover amounts would be distributed to a cy pres fund. Upon ATC’s motion, the circuit court stayed the district court’s proceedings and granted leave for interlocutory appeal under Federal Rule of Civil Procedure 23(f).

Rule of Law

Issue

Holding and Reasoning (Walker, J.)

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