Suit on Tobacco Ads Sparks Feisty Debate
Tuesday, October 7, 2008
The Supreme Court waded yesterday into a complicated legal debate over whether tobacco companies can be sued in state courts for deceptive advertising of "light" cigarettes, a dispute that has divided government regulators and the business community.
As the justices began their new term, they engaged in a spirited oral argument over a lawsuit filed in Maine by three smokers against Philip Morris USA and its parent company, Altria Group. Using internal company documents and supported in part by the Bush administration, which helped them argue their case, the smokers accused Philip Morris of falsely marketing low-tar and low-nicotine cigarettes as less harmful than regular brands.
The tobacco company said it should be shielded from such state law claims by federal law, a position that drew skepticism from several members of the court's liberal wing. Conservative justices seemed generally more receptive to Philip Morris's argument, with Justices Samuel A. Alito Jr. and Antonin Scalia suggesting that if consumers were misled into thinking that light cigarettes are safer, the fault is more the government's.
"The FTC's position seems to me incomprehensible," Alito told a Justice Department lawyer, referring to the Federal Trade Commission's regulation of the industry through a controversial test that measures tar and nicotine yields. Alito added: "You've created this whole problem by, I think, passively approving the placement of these figures . . . in the advertisements. And if they are misleading, then you have misled everybody who's bought those cigarettes for a long time."
Justice Anthony M. Kennedy, often the deciding vote when the court divides along ideological lines, told an attorney for the smokers that he is probably "going to have difficulty in accepting your position in this entire case."
The argument in Altria Group v. Good was the latest in a growing national debate over "preemption," a doctrine under which state product liability lawsuits against companies can be thrown out under federal law. Courts are filled with such cases, and the Supreme Court decided several last term in favor of corporations. The justices will hear another major preemption case, involving the pharmaceutical industry, in November.
That has raised concerns among state regulators that their role in defending consumers from tobacco and other harmful products could be threatened. "We're worried that this is a grand conspiracy by the Supreme Court to prevent states from having any role in enforcing rules against big companies," said Linda J. Conti, assistant attorney general for Maine, which filed legal arguments on behalf of 47 states and the District of Columbia.
Business groups just as passionately favor preemption, saying a cascade of product liability lawsuits is raising their costs and harming the economy. "If you allow states to change federal labeling laws, you'll have to have different labels on your products for all 50 states. It's sort of nuts," said Robin S. Conrad, a lawyer with the U.S. Chamber of Commerce.
Product labeling lies at the heart of the Altria case. The company says that it met federal requirements for warning labels about the health hazards of cigarettes and that the lawsuit should be thrown out under a federal labeling law that prohibits states from regulating cigarette advertising "based on smoking and health." Additionally, Altria argues that the case should be tossed because the FTC authorized the use of terms such as "light."
The smokers say the company is liable because its advertising was fraudulent. Even if light cigarettes have less tar and nicotine, smokers compensate by taking longer puffs or smoking more cigarettes, they argue.
They contend that Philip Morris has known about such "compensatory" techniques for decades, citing internal documents unearthed during the government's massive racketeering case against the industry and other legal battles. In 2006, a federal judge concluded that cigarette companies conspired to deceive the public, including by falsely marketing low-tar brands as less harmful.
The lawsuit was filed in federal court in Maine but is based on a Maine law that regulates deceptive trade practices. A lower court judge sided with Altria, but the decision was reversed by an appellate court. The Bush administration is supporting the smokers in the part of their case that challenges the idea that FTC approval of "light" cigarettes constitutes "implied preemption."
Justice Stephen G. Breyer yesterday questioned Altria's argument, saying it would shield companies from liability for blatantly false statements. Drawing laughter in the courtroom, he said: "Somebody could advertise smoking 42 cigarettes a day will grow back your hair. That's totally false, and in your view, that would be preempted."
Although the argument only peripherally touched on the health hazards of cigarettes, public health and anti-smoking groups urged the court in a brief not to forget them. "The last people you'd ever want to have immunity are people who cause 400,000 deaths a year, with knowledge," said Gerson H. Smoger, an attorney for the groups. "Light cigarettes are an absolute fraud."