United States: Supreme Court Reaffirms That Federal Law Allows State Fraud Claims Against Tobacco Companies
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(Dec 22, 2008) On December 15, 2008, the U.S. Supreme Court held that federal law does not preempt a state court lawsuit claiming that cigarette manufacturers violated state unfair trade practices law by fraudulently conveying the message in their advertisements that "light" cigarettes are less harmful than regular cigarettes.
The Federal Cigarette Labeling and Advertising Act preempts state "requirement[s] or prohibition[s] based on smoking and health . . . with respect to the advertising or promotion" of cigarettes that comply with federal labeling regulations. The plaintiffs, smokers of Marlboro Lights and Cambridge Lights cigarettes, filed a lawsuit in federal court in Maine alleging that these brands' manufacturers violated the Maine Unfair Trade Practices Act (MUTPA) by marketing "light" cigarettes in a manner that conveyed the message that they actually delivered lower tar and nicotine, despite the manufacturers' knowledge that this was false. The manufacturers moved for summary judgment on the grounds that the federal statute preempts the MUTPA claim, and the district court granted this motion. The U.S. Court of Appeals for the First Circuit reversed, ruling that the MUTPA claim is in the nature of a fraud claim not preempted by the federal law.
The Supreme Court agreed with the First Circuit that the smokers' MUTPA claim is not preempted. Observing the principle that federal preemption statutes should be interpreted narrowly, the Court applied the controlling plurality opinion in a 1992 case, Cipollone v. Liggett Group, Inc., which held that the Labeling Act's preemption provision covers only state law claims predicated on a legal duty "based on smoking and health . . . with respect to . . . advertising and promotion," but not claims predicated on the general obligation not to deceive. The Court noted that the MUTPA is a general statute addressing the duty not to deceive, rather than a law addressing smoking and health, and found that Good's MUTPA claim was premised on the general duty to avoid fraudulent marketing. The Court declined the manufacturers' request that it revisit its precedent in Cipollone.
The Court also rejected the manufacturers' argument that the MUTPA claim is impliedly preempted because it would be contrary to a Federal Trade Commission (FTC) policy permitting manufacturers to test for tar and nicotine and use the results in their advertising. The Court said that while the FTC permitted factual assertions of tar and nicotine yields, it did not authorize collateral representations concerning the reduction or elimination of health hazards or the use of "light" or "low tar" descriptors. Because the MUTPA claim would not be inconsistent with FTC policy, it is not impliedly preempted, the Court ruled. (Altria Group, Inc. v. Good, No. 07-562 (Dec. 15, 2008), available at http://www.supremecourtus.gov/opinions/08pdf/07-562.pdf).
- Author: Luis Acosta More by this author
- Topic: Civil liability More on this topic
- Jurisdiction: United States More about this jurisdiction
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Last updated: 12/22/2008