A three-judge panel of the 3rd District Court of Appeal ruled hours after hearing oral arguments from lawyers on both sides.
Tobacco attorneys argued for damages on a smoker-by-smoker basis. The companies could more easily defend against individual lawsuits than one large suit carrying a potentially huge verdict.
In July, jurors found the nation's five largest cigarette makers and industry groups had produced a defective and deadly product. The same jury is to determine damages in the second phase of the trial, to begin Nov. 1.
The appeals court had ruled Sept. 3 that damage claims in the landmark smoking case must be considered one smoker at a time, rather than for the class estimated at half-a-million people. The decision raised the prospect of multimillion-dollar individual awards rather than a multibillion-dollar lump sum for the class.
The appeals court vacated its decision in September and called for oral arguments.
Lead tobacco attorney Dan Webb told the panel Wednesday that a single award would cause an "enormous amount of irreparable harm to the industry."
U.S. juries have awarded damages in smoking liability cases only five times twice in Florida and once in New Jersey, Oregon and California. Both Florida verdicts and the New Jersey verdict were overturned on appeal.
The $206 billion national settlement reached with the tobacco industry in November bars states from suing to recoup the costs of treating sick smokers, but doesn't stop lawsuits by individuals.
The Florida defendants are Philip Morris, R.J. Reynolds Tobacco, Brown & Williamson Tobacco, Lorillard Tobacco, the Liggett Group and the industry's Council for Tobacco Research-U.S.A and Tobacco Institute Inc.