California tobacco class-action suit reinstated

LOS ANGELES, May 18 (Reuters) - California's Supreme Court ruled on Monday that a long-running class-action lawsuit against major cigarette makers can go ahead, after being effectively halted by a lower court.

The suit, originally brought in 1997, alleges that major tobacco companies, industry groups and a public relations firm engaged in a "decades-long campaign of deceptive advertising and misleading statements" about cigarettes, addiction and disease.

The defendants include Altria Group Inc's (MO.N) Philip Morris USA unit; Reynolds American Inc's (RAI.N) R.J. Reynolds Tobacco Co; rival cigarette maker Lorillard Inc (LO.N); and public relations firm Hill and Knowlton Inc, owned by WPP Plc (WPP.L).

Under a change in California law in 2004, designed to curb excessive class-action lawsuits against corporations, California made it more difficult to form a class-action suit, by demanding that each member of the suit demonstrate personal damage or loss of money caused by the alleged fraud.

In light of the new law, California's Court of Appeal backed the defendants' demand to decertify the class-action lawsuit, meaning each plaintiff would have to file suit separately, greatly diminishing the impact of the legal action.

On Monday, the state's Supreme Court reversed that decision on a majority 4-3 verdict, meaning that the class action suit can proceed.

"We conclude that standing requirements are applicable only to the class representatives, and not all absent class members," the court's ruling said, meaning that only a handful of plaintiffs leading the suit must show proof of damage and deception, not all plaintiffs in the suit. (Reporting by Bill Rigby; Editing by Richard Chang)