Court Tosses Judgment vs. Philip Morris

Illinois Supreme Court Says Cigarette Company Did Not Defraud Customers

Wayne Taff , former plaintiffs attorney and former chair of the Product Liability Committee of DRI (Defense Research Institute), will be online Friday, Dec. 16, at 11 a.m. ET to discuss the Illinois Supreme Court decision to throw out a $10 billion class-action lawsuit against Philip Morris USA, ruling the company did not defraud customers in its marketing for "light" cigarettes.

Read the story: Court Overturns $10 Billion Verdict Against Philip Morris (Post, Dec. 16)

Taff is senior partner in Sherman, Taff & Bangert PC of Kansas City, Mo. He has tried high profile jury trials in product liability cases throughout the U.S. and has served as national, regional and trail counsel for numerous Fortune 500 companies.

A transcript follows.

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Wayne Taff: Welcome from the Heart of America. I welcome your questions on the ruling from the Illinois Supreme Court in the tobacco case, Price v. Philip Morris.

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washingtonpost.com: Wayne Taff, welcome to washingtonpost.com.

Will the ruling by the Illinois Supreme Court in this Philip Morris case affect other pending cases? In essence, did the court decide that the tobacco company was not misleading the public by its advertising and marketing of "light" brand cigarettes?

Wayne Taff: In theory, the ruling applies only to cases in the State of Illinois that are based on claimed deceptive advertising, since the decision was based on language of an Illinois statute. However, the logic of the opinion is sound if applied to suits in other states that prohibit claims based on advertising where the advertising was approved by the FTC.

The Court did not decide the companies were not misleading, one way or the other. Instead, it decided that whatever was said was authorized by the FTC and that the Illinois statute prohibited suits for misleading advertising in light of the FTC authorization.

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Los Angeles, Calif.: How long is it likely to take the appeals process?

Wayne Taff: The Illinois decision was the actual appeals process. The next step, if any, would be to seek a writ of certioria from the Supreme Court of the US and the time length is anyone's guess.

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Waynesburg, Pa.: Have tobacco companies done enough to disprove the "light cigarette" myth?

Wayne Taff: From a "technical" viewpoint, I cannot really answer. However, the Illinois decision correctly noted that it did not matter, since the FTC had authorized use of the word "light" after decades of telling the companies they were going to be sued by the FTC if they did not use light, low tar, etc.

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New York, N.Y.: Does this ruling completely stymie future plaintiffs suits? Do you see this as a victory for defense attorneys around the nation?

Wayne Taff: In theory, the decision simply forecloses suits in Illinois based on claimed deceptive advertising, since the decision was based solely on the Illinois statute. However, the logic of the opinion would apply in other states that have statutes that prohibit claims based on advertising approved by federal agencies. I see it as a victory for logic and law.

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Washington, D.C.: How will this reversal affect current tobacco litigation, such as Engel vs. Philip Morris class action, the Oregon appeals court consideration of a $100 mil. punitive damages award and a similar lawsuit in New York?

Wayne Taff: Please look at the answer to #6. The question regarding punitive damages might be an entirely separate one, addressing whether the $100 million award meets the standards set out by the U S Supreme Court in various cases, including Campbell v. State Farm

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Cleveland, Ohio: What's the current state of tobacco litigation related to basic product liability for cigarettes in general? Have there been victories for plaintiffs?

Wayne Taff: While suits continue to brought, with a class action in Florida that is similar to the Illinois case, the results have been mixed. Plaintiffs have won some of the cases, although some of those successes have been reversed on appeal. The defendants have also won some major successes. First hand smoke cases seem to be filed less frequently, with second hand smoke cases increasing. Overall, however, the number of cases seem to be going down. There have been recent wins for both sides.

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Chicago, Ill.: As we know, Altria has been planning a breakup of the company in order to make it more valuable. This reversal removed one of three lawsuits blocking this planned breakup. What must Altria and Philip Morris do to remove the remaining two "roadblocks"?

Wayne Taff: Better to ask them, but my gut is simple: win those suits as well

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Harrisburg, Pa.: There are talks that some tobacco manufacturers believe that state governments are in violation of the Tobacco Fund since product share may dip below a certain point which, in the agreement, means they would be permitted to stop making payments to the states. Yet, some of the smaller independent cigarette manufacturers that are not bound by the Fund agreement and whose product share has increased are believed to be subsidized by tobacco manufacturers contained in the agreement. My question: would the tobacco industry consider suing to stop making payments into states' Tobacco Fund, and didn't the industry really create this option in advance as a means to get out of the agreement? Or am I just cynical?

Wayne Taff: I would assume they would consider suing. As to why they created the option, I can't tell you, but it is not unusual for any contract to provide that if X occurs then you no longer have to do Y

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Richmond, Va.: I know this may be far fetched, but do you feel that this decision will discourage plaintiffs attorneys from filing similar lawsuits?

Wayne Taff: It is not at all far fetched. Tobacco suits are quite expensive to bring and take to trial. If any attorney is considering suing in a state that has a statute similar to the Illinois statute, he or she would need to think long and hard before bringing suit, at least on the theory of deceptive advertising.

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Providence, R.I.: Do the plaintiffs involved in the suit retain any of the damages they were awarded by the lower court?

Wayne Taff: No

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Baltimore, Md.: Do you feel that other appellate courts and trial courts will follow suit with regards to products liability lawsuits? As I see it, Altria, and many other manufacturers, have simply been following the law and abiding to all of the mandates of government agencies. Will these courts use this case as a template?

Wayne Taff: Bear in mind that the decision is based solely on an Illinois statute that prohibits suits in the state court if the action or conduct was specifically authorized by laws administered by a regulatory agency or body.

Thus, in theory, the case is narrow. However, the logic is broad and could be used in many circumstances if a manufacturer is sued in a state that has a statute that prohibits suit if one complies with state or federal regulation in the design, sale or advertising of the product.

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Fairfax, Va.: Are people who sue tobacco companies because they have illnesses really just trying to blame them for their own wrongdoing?

Wayne Taff: That's a pure matter of opinion. Some juries have said no, others have said yes. What does your common sense tell you? Such suits certainly would not have been brought in the 40s 0r 50s

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Washington, D.C.: How many similar cases are pending in the U.S?

Wayne Taff: To be honest, I don't know. If by similar, you mean class actions involving claimed deceptive advertising, I know of at least two others, but there may be more

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Bethesda, Md.: I have been a smoker of Philip Morris products for over 20 years. What affect will this reversal and ruling have on me, the consumer?

Wayne Taff: Don't know. Were you planning on suing? If you were, and were planning on suing for deceptive advertising in Maryland, see some of the other answers. Depends on what Maryland law is.

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Phoenix, Ariz.: Do you think that this reversal will expedite Altrias's breakup?

Wayne Taff: I can't really comment. Business commentators are all over the board.

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Madison, W.Va.: Does this tobacco litigation create precedence for smokeless tobacco?

Wayne Taff: Yes. See the answers to some of the other questions. If a user of smokeless tobacco is contemplating suing for deceptive advertising, and the advertising was approved by the FTC, state law might bar the claim if the state has a statute like the one in Illinois

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Washington, D.C.: The court said they were ruling on purely state law, but they interpret what the FTC, a federal agency, was authorizing. Do you predict that the Supreme Court will see this issue as worthy of cert?

Wayne Taff: I quit predicting the US Supreme Court a long time ago, but it certainly wouldn't surprise me. However, note that in theory, there is no reason for the SC to take the case. As you noted, the case was decided on state law, and even if they were wrong about whether the FTC did or did not authorize the language, it is up to Illinois to decide what is meant by "authorized" within the meaning of its statute.

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Annandale, Va.: Has there ever been a lawsuit brought against our Armed Forces for supplying soldiers with cigarettes as part of their rations (Vietnam era and before). My father-in-law never smoked a day in his life, went into the Army, was supplied smokes and became addicted. He brings up a good argument that they were standard rations, and plus the environment encouraged their use (i.e., every hour they were told to stop walking, take a break and "smoke 'em if you got 'em").

Wayne Taff: Neat question. As Marine veteran of Vietnam, I remember getting my daily dose of Lucky's from the SP packs.

I don't know of such suits. Generally speaking, however, likely cannot be brought since the "sovereign" is generally immune from suit under the Federal Tort Claims Act.

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Washington, D.C.: So, for health reasons, should the FTC's policies be changed?

Wayne Taff: Wow, you will have to address that one to a doctor. I really don't know.

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Washington, D.C.: Can you please explain the details of the case? Who filed the case and what were the circumstances?

Wayne Taff: Suit was brought as a class action on behalf of a little over 1 million residents of Illinois, claiming that use of the words "low tar," "lower tar", or "light" in connection with Marlboro lights was deceptive advertising, based on the claim that those words implied there was no health hazard or reduced health hazard in smoking "lights," with the plaintiffs claiming that was false, since people who switched to lights simply started smoking more of the lights.

The claim was based on two sections of Illinois law that prohibit false, deceptive or misleading advertising. The Judge certified the class action (which the Illinois Supreme Court called into question), and at a trial by the court, found for the plaintiff.

PM claimed it could not be sued under Illinois law because the advertising was specifically authorized by the Federal Trade Commission.

See some of the other answers for the explanation of how the court ruled and why when it reversed the judgment for the plaintiffs.

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Arlington, Va.: This is more of a comment. I am an attorney involved in "light" litigation. This ruling will not, for example, impact the nationwide RICO "lights" class action pending in front of Judge Weinstein in the Eastern District of New York -- he has already ruled that the FTC issues are subject to reasonable inferences either way and denied summary judgment on this issue. Additionally, several other "lights" cases have similarly held that the FTC never authorized the use of the "lights" descriptor. There are certified "lights" class actions pending in Missouri, Minnesota, Ohio and Massachusetts (already up for Mass. Sup. Ct. review -- they upheld class certification).

Wayne Taff: Thanks! Far better answer than mine as to how many cases are pending, and explains why I have commented that whether it restricts suits has a lot to do with state law.

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Alexandria, Va.: Do you think there is a rise in product liability cases in this country? If so, are there any specific industry or industries that such suits seem to be focused towards?

Wayne Taff: The statistics say that the number of product liability cases seem to be about the same over the last couple of years - but they also show that there are an incredible number of product liability suits.

There now seems to be a "focus" by the plaintiffs' trial lawyers on claimed "toxic" substances, ranging from asbestos to benzene in cleaners, gasoline and the like, to welding rods and playground equipment that used CC wood.

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College Park, Md.: Was this case comprised of one individual or a group of individuals?

Wayne Taff: Two "representative" plaintiffs who represented the claims of 1 million+ class members.

By the way, they testified they bought lights because they thought they were not as bad for your health as regular smokes, but after suit was brought claiming that was untrue, they continued smoking the lights.

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Washington, D.C.: What does this ruling say in terms of consumer protection?

Wayne Taff: In the literal and logical sense, it does not address consumer protection. It addresses the issue of whether a company can be held liable, under Illinois law, for what it says in advertising authorized by a federal agency.

The Court does explain at length that if folks disagree (or disagreed) with what the FTC approved, the political process was designed for them to go to the Congress and tell them to get it right.

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washingtonpost.com: That concludes our discussion. Thank you for logging on.

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