Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contingencies

The changes in our accrued liability for tobacco and health and certain other litigation items, including related interest costs, for the periods specified below are as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2022		2021		2022		2021
Accrued liability for tobacco and health and certain other litigation items at beginning of period	$	91	$	9	$	25	$	—
Pre-tax charges for:
Tobacco and health and certain other litigation (1)	98		142		41		99
Related interest costs	3		6		2		6
Payments	(137)		(60)		(13)		(8)
Accrued liability for tobacco and health and certain other litigation items at end of period	$	55	$	97	$	55	$	97

(1) Includes judgments, settlements and fee disputes associated with tobacco and health and certain other litigation. See Shareholder Class Action and Shareholder Derivative Lawsuits below for discussions of the shareholder class action case and related settlement and the proposed settlement of the federal and state shareholder derivative lawsuits.

The table below lists the number of certain tobacco-related cases pending in the United States against us as of:

	October 24, 2022	October 25, 2021
Individual Smoking and Health Cases (1)	161	179
Health Care Cost Recovery Actions (2)	1	1
E-vapor Cases (3)	4,351	2,951
Other Tobacco-Related Cases (4)	3	3

(1) Includes as of October 24, 2022, 18 cases filed in Illinois, 18 cases filed in New Mexico, 35 cases filed in Massachusetts and 54 non-Engle cases filed in Florida. Does not include individual smoking and health cases brought by or on behalf of plaintiffs in Florida state and federal courts following the decertification of the Engle case (these Engle progeny cases are discussed below in Smoking and Health Litigation - Engle Class Action). Also does not include 1,395 cases brought by flight attendants seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”). The flight attendants allege that they are members of an ETS smoking and health class action in Florida, which was settled in 1997 (Broin). The terms of the court-approved settlement in that case allowed class members to file individual lawsuits seeking compensatory damages, but prohibited them from seeking punitive damages. Class members were prohibited from filing individual lawsuits after 2000 under the court-approved settlement.

(2) See Health Care Cost Recovery Litigation - Federal Government’s Lawsuit below.

(3) Includes as of October 24, 2022, 58 class action lawsuits, 3,119 individual lawsuits and 1,174 “third party” lawsuits relating to JUUL e-vapor products, which include school districts, state and local government, tribal and healthcare organization lawsuits. JUUL is an additional named defendant in each of these lawsuits. The 58 class action lawsuits include 32 cases in the Northern District of California (“Multidistrict Litigation” or “MDL”) involving plaintiffs whose claims were previously included in other class action complaints but were refiled as separate stand-alone class actions for procedural and other reasons.

(4) Includes as of October 24, 2022, one inactive smoking and health case alleging personal injury and purporting to be brought on behalf of a class of individual plaintiffs and two inactive class action lawsuits alleging that use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment, breach of warranty or violations of RICO.

Currently Pending Engle Cases with Accrued Liabilities

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status	Accrual (1)
Miller	September 2022	PM USA and R.J. Reynolds	Miami-Dade	$2 million (<$1 million PM USA)	$0	Defendants’ post-trial motions pending.	<$1 million in the third quarter of 2022

(1) Accrual amounts include interest and associated costs, if applicable. For any case with multiple defendants, if any, accrual amounts reflect the portion of compensatory damages PM USA believes it will have to pay if the case is ultimately decided in plaintiff’s favor after taking into account any portion potentially payable by the other defendant.

Currently Pending Engle Cases with Verdicts Against PM USA

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Levine	September 2022	PM USA and R.J. Reynolds	Miami-Dade	$1 million ($1 million PM USA)	$0	Defendants’ post-trial motions pending.
Schertzer	April 2022	PM USA and R.J. Reynolds	Miami-Dade	$3 million	$0	Appeal by defendants to the Third District Court of Appeal pending.
Lipp	September 2021	PM USA	Miami-Dade	$15 million	$28 million	Appeal by defendant to Third District Court of Appeal pending.

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Garcia	May 2021	PM USA	Miami-Dade	$6 million	Mistrial	Appeals by plaintiff and defendant to Third District Court of Appeal pending.
Duignan	February 2020 (2)	PM USA and R.J. Reynolds	Pinellas	$3 million	$12 million	Appeal by defendants to Third District Court of Appeal pending.
McCall	March 2019	PM USA	Broward	<$1 million (<$1 million PM USA)	$0	Awaiting new trial date on punitive damages.
Holliman	February 2019	PM USA	Miami-Dade	$3 million	$0	Appeal by defendant to Third District Court of Appeal pending.
Chadwell	September 2018	PM USA	Miami-Dade	$2 million	$0	Defendant’s petition for review to the Florida Supreme Court pending.
Kaplan (McLaughlin)	July 2018	PM USA and R.J. Reynolds	Broward	$2 million	$0	Florida Supreme Court vacated the punitive damages award in accordance with the decision in Sheffield (3). The Fourth District Court of Appeals affirmed the compensatory damages award and granted a new trial on punitive damages.
Cooper (Blackwood)	September 2015	PM USA and R.J. Reynolds	Broward	$5 million (<$1 million PM USA)	$0	Fourth District Court of Appeal affirmed the compensatory damages award and granted a new trial on punitive damages.
D. Brown	January 2015	PM USA	Federal Court - Middle District of Florida	$8 million ($5 million PM USA)	$0	U.S. Court of Appeals for the Eleventh Circuit vacated the punitive damages award and reduced the compensatory damages award based on plaintiff’s comparative fault to $5 million, which was accrued and paid in August 2022. Awaiting new trial date on punitive damages.

(1) PM USA’s portion of the compensatory damages award is noted parenthetically where the court has ruled that comparative fault applies.

(2) Plaintiff’s verdict following a retrial of an initial verdict in favor of plaintiff.

(3) PM USA is not a defendant in Sheffield, which is discussed below in Engle Progeny Appellate Issues.

Engle Cases Concluded Within Past 12 Months

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Accrual Date	Payment Amount (if any)	Payment Date
Tuttle	August 2022	PM USA	Duval	Third quarter of 2022	<$1 million	October 2022
Cuddihee	January 2020	PM USA	Duval	Second quarter of 2022	$2 million	June 2022