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Philip Morris USA Reaches Agreement to Resolve Federal Engle Progeny Litigation

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Philip Morris USA (PM USA) announced today that it and other cigarette manufacturers have reached a tentative agreement to resolve Engle progeny lawsuits pending against them in federal court. Under the agreement, there will be no new trials of Engle progeny cases brought by plaintiffs represented by the law firms of Motley Rice LLC or Lieff Cabraser Heimann & Bernstein LLP in federal court. Federal cases that are in trial and those that have already gone to verdict are not included in the agreement. Engle progeny lawsuits pending in Florida state courts are also not part of the agreement.

Under the agreement’s terms, PM USA will pay $42.5 million, and it will record a corresponding charge against its reported pre-tax earnings in the first quarter of 2015.

“We are pleased that we were able to work with Motley Rice and Lieff Cabraser to put the federal Engle progeny trials behind us. Today’s agreement is in the best interest of the company,” said Murray Garnick, senior vice president and associate general counsel, Altria Client Services, speaking on behalf of PM USA. “As for the Engle progeny cases in state court, we will continue to defend ourselves vigorously, including appealing adverse verdicts.”

The Engle case was originally filed in 1994 and attempted to certify a national class action of smokers. The class was subsequently limited to Florida residents and ultimately decertified in 2006 by the Florida Supreme Court. In doing so, the Florida Supreme Court also ruled that former class members could file their own lawsuits and use certain general findings from the class action trial. The court gave former class members until January 2008 to file their lawsuits, which are commonly referred to as Engle progeny cases. Plaintiffs filed their suits in U.S. District Court and various state courts throughout Florida.

The agreement is subject to final approval. In particular, because the agreement contemplates participation by substantially all remaining federal-court plaintiffs, the agreement will not become final unless there is full participation or the parties otherwise agree. In the interim, the court that administers the federal Engle progeny cases has ordered that the upcoming trials against PM USA and the other manufacturers are stayed pending final approval of the agreement.

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