Cigarette maker Philip Morris USA said Monday that it has filed a lawsuit against 17 retailers in the Miami area, claiming they sold counterfeit Marlboro cigarettes. The lawsuit, filed in U.S. District Court for Southern Florida, is the latest in an ongoing series of legal actions by the Henrico County-based company aimed at fighting counterfeit sales of its top-selling cigarette brand.

In recent years, the company has sued retailers and importers in New York and California for selling counterfeit versions of its cigarette brands. In February, the company filed a lawsuit in California against seven Chinese online retailers, alleging that they sold counterfeit versions of Marlboro to U.S. customers.

Philip Morris USA says many of the counterfeit cigarettes are made in China and illegally imported into the United States.

The company monitors its markets for counterfeit versions of its brands, said David Sutton, a company spokesman. “We have seen that Miami, based on our monitoring, is one of the top three markets in the U.S. for counterfeit cigarette sales, along with Los Angeles and New York,” he said.

Counterfeit cigarettes often are smuggled and sold into states with relatively high cigarette taxes. Florida’s state tax on cigarettes is $1.34 per pack, the 26th highest state tax in the nation.

But Miami also shares other characteristics with Los Angeles and New York that make it a hotbed for counterfeits, Sutton said. All three areas have high-volume ports and established criminal elements that know how to smuggle products.

Based on its own monitoring, Philip Morris USA estimated that there could be more than 1 million packs of counterfeit Marlboro cigarettes available annually in the Miami area.

The U.S. Food and Drug Administration will not remove four members of its tobacco advisory panel despite a request from Philip Morris USA, the Wall Street Journal reports. The tobacco company had asked for the change because of what it deemed the panelists’ conflicts of interest.

Altria, parent company of Philip Morris, revealed the application in its quarterly financial report. In its request, Philip Morris pointed out that four members had financial or other conflicts, such as serving as a paid expert witness for plaintiffs in lawsuits against tobacco companies. The agency formed the Tobacco Products Scientific Advisory Committee in early March.

In denying the request, the “FDA followed existing law and procedure to recruit the best scientific experts and to ensure that [the panel] has a balanced composition of expertise to handle the many complex tobacco-related issues it will face,” its letter read.

Philip Morris and U.S. Smokeless Tobacco Co., also owned by Altria, asked that Neal Benowitz, Gregory Connolly, Jack Henningfield and Jonathan Samet be removed from the panel. The two companies indicated in its letter to the FDA that those panelists had financial conflicts and “irreconcilable biases” that would prevent them from fairly reviewing tobacco products and writing recommendations of those products. These “appointees have pronounced and disqualifying conflicts and biases arising from their active and zealous participation as paid expert witnesses for plaintiffs in lawsuits” that would try to harm the tobacco industry.

However, Altria said that the agency told it all advisory panel members would be looked at for any potential conflicts of interest on panel topics, which might mean some members would be excluded from certain discussions.

The nation’s two largest cigarette companies said yesterday that they made their annual payments as part of a legal settlement with states over smoking-related health costs.

However, both companies say they do not owe a portion of the payments and will attempt to recover the money through arbitration.

The nation’s largest cigarette maker, Henrico County-based Philip Morris USA, said it made its full payment of about $3.6 billion, which will be distributed among states that were part of the national tobacco settlement, including Virginia. The payment includes a disputed amount that the company would not disclose.

Separately, Winston-Salem, N.C.-based R.J. Reynolds Tobacco Co., which is owned by Reynolds-American Inc., said it made a payment of $2 billion, including $448 million that was deposited into a disputed payments account.

The disputed payments concern a provision in the 1998 legal settlement between the companies and the states. Under the settlement, the cigarette makers that agreed to the deal may reduce their payments if they lose market share to competitors that did not sign the settlement.

Philip Morris USA said it has paid more than $51 billion since 1997 to the states as part of the settlement. A spokesman for Reynolds said the company has paid about $24 billion into the settlement, including about $1.65 billion that the company disputes it owes.

A Florida judge reduced an almost $300 million verdict against Altria Group Inc.’s Philip Morris USA unit to $38.9 million in a lawsuit brought by a former smoker who suffers from emphysema.
“The court found that the jury’s verdict was grossly excessive and unsupported by the evidence presented at trial,” the cigarette maker said yesterday in an e-mailed statement.

A Fort Lauderdale jury last year awarded Cindy Naugle $56.6 million in compensatory damages and $244 million in punitive damages. The jury found Naugle was 10 percent responsible for her injuries and reduced the compensatory damages by that amount.

Naugle started smoking in 1968 when she was 20 years old. Bob Kelley, a lawyer for Naugle, said in a phone interview that he will appeal the judge’s decision.

Philip Morris also said it will appeal, saying that no damages were warranted.

The suit was one of about 4,000 filed after a 2006 Florida Supreme Court decision decertifying a statewide class action. The court allowed smokers to sue individually and extended the time for them to do so. The $300 million award was the largest tobacco verdict in Florida since the Supreme Court decision.

By Edvard Pettersson, Businessweek

Richmond Metropolitan Habitat for Humanity got the go-ahead yesterday from Richmond — and a commitment of $225,000 from the city, the largest to date — for its first mixed-income community.

The Pillars of Oakmont is a 15-home community that will be built at T and 33rd streets in Richmond’s East End near Armstrong High School. The units will be energy-efficient row houses sold at different price points based on the income of the buyer.

It is the first mixed-income Habitat-built community for the region and possibly the country.

“After waiting, hoping, dreaming and fundraising, we just got the green light,” said Leisha G. LaRiviere, president and chief executive officer of Richmond Habitat.

The city is contributing funding through the Department of Housing and Urban Development’s Home Program and the city’s Capital Improvement Plan.

Altria Group Inc., The Altria Foundation, Philip Morris USA and the Altria Companies Employee Community Fund are major partners, contributing a combined $120,000 to the $4 million project.

An investment pool of national banks is providing a $1 million loan through Habitat for Humanity International.

Fulton Bank is extending a $750,000 line of credit. “We’re happy to be part of the vision — a bold project for Habitat for Humanity,” said Oliver Way, president of the Central Virginia region for the Lancaster, Pa.-based bank.

Williams Mullen law firm is providing free legal service on the project.

Twelve units will be sold to lowand middle-income Habitat clients at discounts, starting in the $90,000 range. Three others will be sold at market value, ranging most likely from $175,000 to $190,000.

Buyers of the homes sold at market value will need to obtain their own funding.

However, Habitat is offering $10,000 to be applied to the mortgage, down payment or closing costs to buyers who make 60 percent to 80 percent of area median income. The median income, with half earning less and half more, is $73,200 in Richmond. A family of four could make as much as $58,550 to qualify.

The city inspector is supposed to meet Habitat officials at the site this morning to begin work on the project. “Everyone is rolling,” LaRiviere said.

The development is expected to be completed in July. “We’re looking for thousands of volunteers,” LaRiviere said. The first volunteer workday is March 31.

By Carol Hazard, Timesdispatch