New York, March 24 (Bloomberg) -- Shares of Altria Group Inc., parent of tobacco maker Philip Morris USA, fell as much as 8.1 percent after the company was ordered to pay $10.1 billion for deceiving customers by advertising ``light'' cigarettes as less ha

Illinois state Judge Nicholas Byron on Friday told the world's largest cigarette maker to pay $7.1 billion in compensatory damages and $3 billion in punitive damages. Byron also ordered Philip Morris to post a $12 billion bond. The lawsuit, filed on behalf of 1.1 million smokers in Illinois, is the first class-action light cigarette case to reach trial. With similar suits pending against Philip Morris, R.J. Reynolds Tobacco Holdings Inc. and British American Tobacco Plc's Brown & Williamson in other states, investors have expressed concern that a loss may lead to a series of expensive judgments. ``There's at least a half dozen other states where similar cases are being attempted,'' said Keith Patriquin, an analyst at Loomis Sayles, which holds about 104,000 Altria shares and some R.J. Reynolds stock. Shares of New York-based Altria shares fell $1.85, or 5.3 percent, to $33.19 at 10:36 a.m. in New York Stock Exchange composite trading, after earlier dropping to $32.21. R.J. Reynolds, the second-biggest U.S. cigarette maker, fell $1.64 to $34.86, after falling to $34.35. Posting Bond Philip Morris said on Friday it would ask an appellate court to block the decision, and would also appeal the verdict and the ruling that certified the case as a class action. ``Certainly they want to appeal it,'' Patriquin said. ``The question is how they do it without putting up that much money.'' Philip Morris USA probably won't be able to post a bond of more than $2 billion or $3 billion, Merrill Lynch analyst Martin Feldman wrote in a report. Posting the bond will likely hurt Altria's earnings this year, analysts said. Illinois legislators are working on a bill that would cap the bonds put up by tobacco companies at $100 million. The judgment is the second largest pending against Philip Morris. In July 2000, a Miami jury told the company to pay $74 billion to a class of Florida smokers. That case is under appeal. A Los Angeles jury told Philip Morris to pay $28 billion to a smoker in October, though the judgment was cut to $28 million by the trial court. Marlboro Share Philip Morris and R.J. Reynolds have increased promotions on premium-price brands in the past year to maintain sales amid competition from cheap imports and counterfeits. Discounts on Philip Morris's Marlboro haven't stemmed declining market share for the world's best-selling cigarette brand. During the trial, Philip Morris told Byron that it never claimed that light cigarettes were healthier. In addition, company lawyers argued that light cigarette smokers never proved how much tar and nicotine they ingested, compared with smokers of regular- strength cigarettes. Documents presented as evidence in lawsuits during the 1990s show the tobacco industry knew smokers using lower-nicotine brands compensated by covering ventilation holes and inhaling more deeply. That meant they were breathing more tar and nicotine than government tests estimated, according to the documents. Byron awarded the $3 billion in punitive damages to the state of Illinois, rather than to the plaintiffs. Inserts With light cigarette trials on the horizon, Philip Morris said in November it would insert notices into about 130 million packs of light, medium, mild and ultra-light cigarettes saying they aren't safer than full-strength brands. The company has said the inserts were a response to a U.S. National Cancer Institute report in November 2001 that said low- tar or light cigarettes didn't reduce the chances of getting smoking-related diseases, rather than an attempt to protect the company from litigation. The Illinois lawsuit was brought by Susan Miles of Granite City, Illinois, and certified as a class action on behalf of people who bought Marlboro Lights or Cambridge Lights. Byron heard the case without a jury.

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