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By Bob Van Voris

Feb. 2 (Bloomberg) -- The judge overseeing a $200 billion lawsuit by smokers of ``light'' cigarettes against Altria Group's Philip Morris unit said the case won't go forward until an appeals court rules on whether it may proceed as a class action.

The decision, made public today, means it is unlikely that U.S. District Judge Jack B. Weinstein in Brooklyn, New York, will be asked to block Altria's planned spinoff of its Kraft Foods unit, which is scheduled for March 30.

Michael Hausfeld, who represents the nationwide class of light cigarette smokers suing tobacco companies in the Brooklyn case, said today he's considering a legal move to block the Kraft deal, to help ensure that Altria can pay if he wins the case.

``No matters related to this case'' will go forward before the appeal is decided, Weinstein said, according to court records.

Analysts following the class action, called the Schwab case after lead plaintiff Barbara Schwab, said Weinstein has issued rulings favorable to the smokers and would be more likely than a New York-based appeals court to order a delay of the spinoff.

In a note to investors yesterday, Citigroup Inc. tobacco analyst Bonnie Herzog estimated there was a 70 percent chance that Hausfeld or another lawyer for smokers suing Altria will try to get an injunction blocking the spinoff. An injunction, which would likely be overturned on appeal, could delay the spinoff and lead to ``as much as 10 percent downside'' in Altria stock, Herzog said.

Weinstein's ruling came as he agreed with lawyers for both sides that an appeals court order delaying proceedings in the case required him to cancel a hearing he scheduled for Feb. 14.

In September, Weinstein allowed the Schwab suit to proceed as a class action, or group lawsuit. A ruling on the appeal of that decision could take months.

Plaintiffs can obtain a larger verdict or settlement when allowed to sue together in a class action, which allows lawyers to pool their resources. Without class status, individual plaintiffs each must pursue their own lawsuit against the defendants.

Altria announced on Jan. 31 the timing of the Kraft spinoff, which had been delayed due to litigation concerns. In a conference call that day, Altria Chief Executive Officer Louis Camilleri said an injunction claim would have ``no merit.''

Altria spokeswoman Lisa Gonzalez declined to comment on Weinstein's decision today.

In addition to Altria and Philip Morris, defendants in the Schwab case include Reynolds American Inc., Brown & Williamson Tobacco Corp., Loews Corp.'s Lorillard Tobacco Co., BAT Industries Plc, British American Tobacco (Investments) Ltd. and Vector Group Ltd.'s Liggett Group Inc.

The case is Schwab v. Philip Morris USA, 04-1945, U.S. District Court, Eastern District of New York (Brooklyn).