A US federal judge yesterday dealt a blow to the tobacco industry when he ruled that a case involving the big cigarette makers and tens of millions of smokers of "light" cigarettes could proceed to trial as a national class action.

The Schwab claim, filed in 2004 under the federal Racketeer Influenced Corrupt Organizations Act (Rico), alleges that cigarette companies defrauded smokers into believing that "light" cigarettes were safer than regular cigarettes.

The class action includes anyone in the US who bought cigarettes that were labelled "light" or "lights" between 1971 and 2006. Lawyers are seeking as much as $200 billion (€156.7 billion) in damages, which would automatically be tripled under the Rico Act.

The ruling, by US district judge Jack Weinstein, sent tobacco shares lower in morning trade.

Altria Group, the parent company of Philip Morris USA, fell more than 4 per cent, while Reynolds American, owner of RJ Reynolds, was down nearly 3 per cent.

Altria has been closely watching the case as it is preparing to spin-off its 88.1 per cent stake in Kraft Foods.

"This ruling may moderately delay the timing of a Kraft spin-off by several months, but we do not believe that it sends the process 'off the tracks'," David Adelman, analyst at Morgan Stanley, told clients.

Judge Weinstein denied the industry's request for a pre-trial appeal of the class certification, which means that Schwab will proceed to trial as a national "lights" class action claim.

Jury selection is expected to begin in January.

PM USA and RJ Reynolds said that they would seek review of the class certification decision to the second circuit court of appeals - where the industry has a successful record of defending itself - and a stay of the trial court proceedings pending a decision by the appellate court