Monday, November 27, 2006

The Perils of Government Regulation

According to the AP:

The Supreme Court on Monday sided with Philip Morris USA, refusing to disturb a court ruling that threw out a $10.1 billion verdict over the company's "light" cigarettes.

The court issued its order without comment.

Last year, the Illinois Supreme Court threw out the massive fraud judgment against Philip Morris, a unit of the Altria Group Inc., in a class-action lawsuit involving "light" cigarettes. Because the Federal Trade Commission allowed companies to characterize their cigarettes as "light" and "low tar," Philip Morris could not be held liable under state law even if the terms it used could be found false or misleading, the state court said.

So basically, because they had the government's endorsement for the product, they are not liable for false or misleading advertising. Perhaps it would have been better if the government had stayed out of the matter entirely.

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