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'Light' cigarette case not preempted, First Circuit says.

The First Circuit recently allowed a case brought by "lights" smokers against cigarette manufacturers to move forward, reversing a district court's decision. The lower court had granted the defendants' motion for summary judgment, ruling that the plaintiffs' claims were preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA). The plaintiffs sued Philip Morris USA, Inc., and its parent company, Altria Group, Inc., under the Maine Unfair Trade Practices Act (MUTPA). The manufacturers' claims that light cigarettes were lower in tar and nicotine than regular, "full-flavor" cigarettes--when they actually delivered the same amount of tar and nicotine--constituted unfair and deceptive trade practices, the plaintiffs argued. They sought the return of sums they had paid to buy lights, as well as punitive damages and attorney fees.

The First Circuit held that the plaintiffs' claims were neither expressly nor implicitly preempted by the FCLAA, nor implicitly preempted by Federal Trade Commission (FTC) oversight of cigarette advertising, nor barred by exemptions in the MUTPA. (Good v. Altria Group, Inc., 2007 WL 2460039 (1st Cir. Aug. 31, 2007).)

The decision revitalizes light cigarette litigation and "protects the legitimate claims of consumers deceived by a scam that goes back to the early 1970s," said Edward Sweda, senior attorney with the Boston-based Tobacco Products Liability Project.

Light cigarettes yield lower nicotine and tar levels than full-flavor cigarettes in a machine test known as the Cambridge Filter Method, but actual smokers unconsciously compensate for the holes that lights have in their filters--by puffing harder, covering the holes, or smoking more--which exposes them to just as much tar and nicotine as smoking regular cigarettes would, the plaintiffs argued.

The district court concluded that the plaintiffs' claims were expressly preempted by the FCLAA because they were grounded in the company's advertising or promotion.

But the plaintiffs argued that that ruling conflicted with the U.S. Supreme Court's decision in Cipollone v. Liggett Group, Inc., which held that the FCLAA expressly preempted only some actions under state law. (505 U.S. 504 (1992).) The First Circuit sided with the plaintiffs, holding that "the FCLAA preempts only those claims based on a' requirement or prohibition based on smoking and health under state law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in accordance with' the FCLAA. It does not preempt claims because they are 'based on smoking and health.'"

Circuit Judge Jeffrey Howard wrote for the three-judge panel that the plain tiffs' "asserted rule of law--that the statements 'light' and 'lower tar and nicotine' constitute fraud---does not interfere with the goals of the FCLAA."

Sweda said the court was "very careful in adhering to precedent in Cipollone."

The defendants argued the lawsuit challenged the FTC's regulatory scheme, and the district court agreed. But the First Circuit held, "[E]ven if we were to agree that FTC action short of formal rulemaking--including consent orders--can implicitly preempt state law in some cases, we do not think that this is one of them, because the plaintiffs' state law claims do not pose a threat to any federal regulatory objectives apparent in the FTC's approach to tar and nicotine claims in cigarette advertising."

The court said it disagreed "with those courts holding that the FTC has 'authorized' Philip Morris's 'light' and 'lower tar and nicotine' claims so as to put them beyond the reach of state consumer protection statutes with exceptions similar to Maine's."

Samuel Lanham of Bangor, Maine, who represents the plaintiffs, said it was significant that although the district court ruled only on express preemption, the First Circuit also addressed implied preemption.

Howard wrote, "As the Supreme Court has cautioned, to 'infer preemption whenever an agency deals with a problem comprehensively is virtually tantamount to saying that whenever a federal agency decides to step into a field, its regulations will be exclusive. Such a rule, of course, would be inconsistent with the federal-state [balance] embodied in our Supremacy Clause jurisprudence.'"

William Ohlemeyer, Philip Morris's vice president and associate general counsel, said in a statement that the company would seek Supreme Court review. "Attempts by plaintiffs' lawyers to use state laws to regulate the marketing and sale of cigarettes are at odds with the nationwide regulations established by the Congress," he said.

But Sweda noted that the cigarette manufacturers were trying to get "a special immunity that Congress never intended."

Good creates a split in the circuits; the Fifth Circuit held last February that fraudulent-misrepresentation claims regarding light cigarettes were preempted by the FCLAA. (Brown v. Brown & Williamson Tobacco Corp., 479 F.3d 383 (5th Cir. 2007).)

The Good decision is likely to affect lights cases pending in other states, Sweda said, especially Aspinall v. Philip Morris Cos. (No. SJC-9981 (Mass.)), set for argument in November, and Dahl v. R.J. Reynolds Tobacco Co. (No. A05-1359 (Minn. App. argued Sept. 18, 2007)). Sweda noted that similar cases have been filed in more than 20 states.

In June, the Supreme Court considered another lights case. The plaintiffs argued that Philip Morris manipulated the design of its light cigarettes, using techniques to make them register lower levels of tar and nicotine on the Cambridge Filter Method than they actually delivered to consumers--and that these amounts of tar and nicotine were greater than the adjective "light," as used in the company's advertising, indicated. The plaintiffs argued that the company's behavior was deceptive and misleading under Arkansas law.

Philip Morris removed the case from state court by invoking the Federal Officer Removal Statute, arguing that it was acting under a federal officer or agency--the FTC. The district court agreed, holding that the plaintiffs attacked the company's use of the government's cigarette-testing method, and the Eighth Circuit also found in the company's favor.

A unanimous Supreme Court disagreed and reversed the Eighth Circuit's decision. "A private firm's compliance (or noncompliance) with federal laws, rules, and regulations does not by itself fall within the scope of the statutory phrase 'acting under' a federal 'official,'" the Court held. (Watson v. Philip Morris Cos., 127 S. Ct. 2301 (2007).)

A recent study found that more than 100 cigarette additives enhance or maintain nicotine delivery, mask smoke odor, mask illnesses, and could increase cigarettes' addictiveness. (Michael David Rabinoff et al., Pharmacological and Chemical Effects of Cigarette Additives, Am. J. Pub. Health (July 31, 2007).) Lanham said more information on how manufacturers manipulate cigarette design "would make a strong case even stronger on the merits," but "the challenge is getting to the merits."

Lanham noted, "In Maine, we are thrilled for the opportunity to get to the real merits of the case."
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Title Annotation:news & trends
Author:Burtka, Allison Torres
Date:Nov 1, 2007
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