Altria Group v. Good

The Supreme Court has agreed to decide whether tobacco companies are vulnerable to state law suits arising from claims that their labels make misleading health claims.

The case, Altria Group v. Good, No. 07-562, arose when a class of smokers in Maine sued the makers of Marlboro Lights and Cambridge Lights, Philip Morris USA, under Maine's Unfair Trade Practices Act. The smokers alleged that Philip Morris's marketing, describing the cigarettes as "light" and having "lowered tar and nicotine," was deceptive because smokers might compensate for the reduced tar and nicotine by altering their smoking habits, making the products equally unhealthy as non-light cigarettes at the end of the day.

The Good case will play out against the backdrop of a successful government racketeering suit against Philip Morris and other cigarette makers claiming that they had misled smokers about the nicotine and tar intake associated with light cigarettes. United States v. Philip Morris, USA, Inc., 449 F. Supp. 2d 1 (D.D.C. 2006). The cigarette makers are appealing the district court's decision to the D.C. Circuit Court of Appeals; if the government prevails, cigarette makers may no longer be allowed to use any "low tar" descriptions.

In the Good case, the federal district court found that the class's claims were preempted by federal law because the federal Labeling Act of 1965 gives the Federal Trade Commission the authority to regulate all cigarette labeling and advertising that touches on the health impact of smoking. The First Circuit reversed this conclusion, finding that the state law claims were not preempted.

The First Circuit reasoned that the class had recourse to state law. It acknowledged that FTC policy has long encouraged smokers to switch to low-tar and low-nicotine cigarettes and requires companies to use a standardized tar and nicotine measurement system to facilitate comparative shopping. However, it observed that the Trade Commission has never adopted a formal rule governing the way companies describe their cigarettes' tar and nicotine content.

The First Circuit openly observed that its opinion stood in conflict with a Fifth Circuit opinion, Brown v. Brown & Williamson Tobacco Corp., 479 F.3d 383 (5th Cir. 2007).

Seeking review, Philip Morris's parent company suggested that the Court's most recent attempt to draw a line between the federal government's scope of authority over cigarette marketing and the states' purview over it, Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992), was proving difficult to follow. That opinion reached different conclusions on the viability of various state law claims, with splits among the justices.

The class countered that the FTC has not specifically permitted tobacco companies to use the "low tar" or "low nicotine" descriptions, thereby leaving room for the states to permit lawsuits based on those marketing formulations. It also drew a different conclusion from Cipollone, concluding that the Court only barred states from establishing tobacco company duties to give information based on smoking and health, but did not preclude them from requiring companies to be truthful generally.

The case may be argued as early as this spring.

tobacco, food and drug regulation, consumer fraud, advertising claims, preemption