The Illinois Supreme Court on Thursday reversed a US$ 1 billion judgement against State Farm Insurance in a class-action lawsuit alleging the company bought substandard parts to repair damaged cars. The case is considered an indicator of how the 'lights' case against Philip Morris will develop.

The ruling could restrict consumers' power to band together for class-action lawsuits.
State Farm customers accused the company of defrauding them by refusing to pay for top-of-the-line replacement parts — including hoods, bumpers and doors — on damaged cars. They argued the parts that State Farm insisted on using were not as durable or safe as the ones made to factory specifications.
That violated the company's duty to restore cars to their condition before the accidents, the lawsuit argued on behalf of roughly 4.7 million policyholders.
But the court held that the lawsuit should never have been given class-action status. Differences in customers' insurance policies meant they did not share the same conditions necessary to sue as a group, justices found.
The case has been watched closely as an indicator of how the court will rule on an even larger class-action case — a US$ 10 billion verdict against cigarette-maker Philip Morris.
Legal experts and business analysts interpreted the State Farm ruling as evidence that Philip Morris may win that decision. Even the dissenting justices in Thursday's ruling said the majority showed "a new hostility" to class-action cases.
In the Altria case, customers argue they were misled by Philip Morris advertising into believing that ‘light’ cigarettes were healthier than regular cigarettes. One of Altria's arguments is that the customers should not have been given class-action status. (pi)