Philip Morris/Altria (MO – $70.29) suffered a small blow in the Supreme Court yesterday when it was ruled that it could not moved a tobacco litigation case from the more hostile state courts to more business-friendly federal courts.

Some think the ruling is a good sign for consumers because it shows the U.S. Supreme Court may actually be trying to conform to the law instead of being strictly pro-business, as some had feared.  In general, it seems to me that the Supreme Court simply interpreted the law.  And this is neither positive nor negative for business or consumers.

As for Big MO, the stock didn't really react to the ruling because the company has reserved so much cash for lawsuits and defending themselves against them.  Meanwhile they continue to pay out their fat and increasing dividend.  Though at under 4% now, it is not the bargain it once was back in Clintonian times when it seemed the public was going to get their money back from Tobacco.  I remember Phillip Morris yielding nearly 10% during the dotcom mania.   

At $70 a share, I wouldn't buy Altria here even if my conscience would let me.  At a P/E of 13, the tobacco giant trades at a discount to the S&P500 but not enough to justify the risks from further litigation.  Tobacco litigation is not just occurring in the U.S., other coutnries in Latin America and Europe are getting into the game as well.

Disclosure:  I do not own Atria (MO).  I have not traded it in the last two years.  Although I do not begrudge those who do, I cannot go to sleep at night hoping more kids start smoking.  I have never been a regular smoker.

Confession: Okay, here I am smoking. I found one photo of this.  I look like an idiot.  I think most people look like idiots while smoking.  I know I feel like an idiot when I do stuff like this.  And yes, that is tobacco I'm smoking.