The stock was down 20 pence or 4.3 percent at 450p by 0720 GMT -- the biggest early decliner in the UK's FTSE 100 index. American depositary shares of British American Tobacco Plc, parent of Brown & Williamson Tobacco Corp., had fallen $1/4 to $15-1/8 on the move while other U.S. cigarette companies also declined. Philip Morris Cos Inc (NYSE:MO - news) fell $3-15/16 or about 13 percent to $27, a 52-week low. A state appeals court in Florida refused to shelter U.S. tobacco companies from punitive damages in a follow-up trial to last July's sweeping liability verdict for as many as one million sick smokers. The unanimous three-judge ruling knocked down arguments by Philip Morris and other defendants in the Engle vs RJ Reynolds class-action that potentially hundreds of billions of dollars in punitive damages be fixed through thousands of individual trials. It also sets the stage for what could be a massive award against beleaguered U.S. tobacco companies by the year's end, analysts said. The prospect of decades of individual trials was a much milder threat to the financial health of cigarette makers than the possibility of a single massive judgment. A spokesman for BAT said the company could not comment because of legal constraints.

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