Appeal Bond Could Bankrupt Philip Morris
Altria, which is the new name for the company that owns Kraft Foods and cigarette maker Philip Morris, faces bankruptcy because it recently lost a case in Illinois and may not be able to afford an appeal. While sympathy for the firm would be misplaced, this sort of tort case makes for bad public policy.
The Illinois law in question requires any party that loses a case to post a bond in order to appeal a decision of the court. In theory, this prevents pointless appeals arranged solely to avoid paying up. In practice, it makes sure that only those with the deepest pockets get a shot at overturning their case.
If Altria/Philip Morris have the truth on their side regarding the firm's financial position, it is hard to see how driving the company out of business will serve the interests of those who have settled their suits with the tobacco makers. That includes many state governments, including Illinois, which plan to use the funds to pay for programs in lieu of using taxes.
The Johns Manville company provides a model to follow. The asbestos firm did not liquidate, but rather remained a profit-making business devoted to paying off the people its prodcut damaged. Imperfect though it is, this is a clear attempt at justice for all. The Philip Morris case would benefit from such a solution, but it is hard to see that through the forest of dollar signs.