By Robert Barnes
Washington Post Staff Writer
Tuesday, December 16, 2008
The Supreme Court said yesterday that consumers may sue over what they allege to be deceptive marketing of "light" cigarettes, a decision that opens tobacco companies to what could be billions of dollars in liability in court cases nationwide.
The justices voted 5-4 in saying that a group of Maine smokers may proceed with their suit against Philip Morris USA, now owned by Altria. The marketing of what the tobacco companies had once called a more "healthy" cigarette is perhaps the biggest legal liability facing the industry, experts say.
The court said federal laws regarding the labeling of cigarettes for health dangers do not stand in the way of suits under state laws that regulate fraudulent marketing practices.
Such suits, wrote Justice John Paul Stevens, are "predicated on the duty not to deceive" and are separate from federal oversight of cigarette testing or the warnings printed on cigarette packs.
Tobacco companies and business groups had hoped the court would rule that the federal laws "preempt" state consumer laws. Anti-smoking groups said the ruling gave a "green light" to court action to hold cigarette-makers liable for the harm they cause.
"It is a historic day for tobacco litigation," said Edward L. Sweda Jr., senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law. He added that the industry had wanted an "absolute shield of immunity for decades of wrongdoing."
In addition to the Maine case, he said there were about 40 similar suits filed in more than 20 states against tobacco companies that sell the "light" and "low-tar" cigarettes.
An Altria lawyer said the company was disappointed by the ruling but pointed to Stevens's comments that smokers have only won the right to try to prove that the company was deceptive. The Maine case was dismissed by a judge before the smokers had even presented their allegations to a jury.
"We continue to view these cases as manageable, and the company will assert many of the strong defenses used successfully in the past to defend against this very type of case," said Murray Garnick, Altria Client Services senior vice president and associate general counsel.
The decision in the case, Altria Group v. Good, is the latest in a growing national debate over "preemption," a doctrine under which liability lawsuits filed in state courts are being challenged as being the province of federal law.
Courts are filled with such cases, and the Supreme Court recently decided several in favor of industries. Robin Conrad, who represents the U.S. Chamber of Commerce, said yesterday's decision came "just when we thought the court was finally introducing some clarity" to the issue. "We're all baffled," she said.
The justices have heard arguments this term in another preemption case, involving the pharmaceutical industry, which may provide more guidance about when federal law trumps state consumer protection statutes.
In the cigarette case, the court split along familiar ideological grounds, with Justice Anthony M. Kennedy, often the deciding vote in such cases, siding with his more liberal colleagues: Stevens and Justices David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.
Justice Clarence Thomas wrote a dissent that was joined by Chief Justice John G. Roberts Jr. and Justices Antonin Scalia and Samuel A. Alito Jr.
The companies that make "light" and "low-tar" cigarettes say they rely on a test, approved by the Federal Trade Commission, that is conducted by a smoking machine and shows that the "light" and "low-tar" cigarettes contain smaller amounts of tar and nicotine than regular cigarettes.
But the smokers in this case, who used Philip Morris's Marlboro Lights and Cambridge Lights for more than 15 years, alleged that "human smokers unconsciously engage in compensatory behaviors" that negate any benefit. Those who smoke such cigarettes, amounting to about 80 percent of smokers, take deeper drags, hold the smoke longer in their lungs or smoke more of the cigarettes to compensate for the lower nicotine levels.
They have cited internal company documents to accuse Philip Morris of knowing just that but still marketing low-tar and low-nicotine cigarettes as less harmful.
Philip Morris contended that the Maine suit was barred by federal laws enacted in the 1960s that set a standard for the warning of health risks from smoking and that barred states from enacting any additional regulation "based on smoking and health."
Stevens relied on the court's 1992 ruling in Cipollone v. Liggett Group Inc. for yesterday's result. That decision, which produced three opinions but none in which a majority agreed, held that the federal label law did not ban all suits filed under state laws.
And Stevens said the Maine law concerned deceptive practices, not "smoking and health."
Thomas dissented, saying that Cipollone created "an unworkable test" and that the Maine case "is premised on the effect of smoking on health." That is just what federal law forbids states from regulating, he said.
Thomas also noted the court's more recent decisions on the issue of preemption and said, "This court has altered its doctrinal approach."
One difference in this case is that the FTC and the federal government supported the smokers' suit. Commissioner Jon Leibowitz issued a statement calling the decision "vindication for the Federal Trade Commission, which never meant to preempt state laws against deceptive advertising."
Staff writer Jerry Markon contributed to this report.