The tobacco company Altria Group is asking the US Supreme Court to short-circuit a class action lawsuit by angry smokers who say they were misled into believing that "low tar" and "light" cigarettes are a healthier alternative to regular cigarettes.
A group of smokers in Maine filed suit against Philip Morris USA and its parent company, Altria, charging that the companies engaged in a decades-long fraud on Maine smokers in violation of state laws against deceptive business practices.
Altria responded to the suit by arguing that its products are regulated by federal law and the Federal Trade Commission (FTC), not the State of Maine. A federal judge agreed and dismissed the smokers' suit. But the First US Circuit Court of Appeals in Boston reinstated the action, ruling that the state lawsuit is not preempted by federal law.
On Monday, the dispute arrives at the US Supreme Court, where the justices are being asked to decide whether the Maine suit can proceed to trial or must be dismissed because it intrudes into the exclusive realm of a federal regulatory agency, the FTC.
The case, Altria Group v. Stephanie Good, is one of two high-profile cases on the Supreme Court's docket this fall raising the issue of federal preemption of state laws and regulations. On Nov. 3, the court is set to hear the case of a Vermont musician whose right hand and forearm were amputated because of a physical reaction to an injected antinausea drug. That suit charges that drug manufacturer Wyeth violated state law by failing to adequately warn consumers about possible dangerous effects from the injection of one of its drugs. Like Altria, Wyeth is urging the justices to dismiss the state lawsuit as preempted by federal law and regulations.
"The court finds itself once again in the thick of an explosive national debate over whether, how, and when federal law displaces state law," Ms. Conrad told reporters in a recent briefing.
"For companies trying to compete in a fast-paced global economy, the question comes down to who gets to regulate your business," she said. "Should it be a single set of uniform national rules, or should your business be regulated by 50 attorneys general, thousands of municipalities, and hundreds of disparate jury verdicts?"
In defense of states' watchdog role
Consumer advocates, trial lawyers, and state attorneys general say federal preemption can make it more difficult to protect consumers from unfair or deceptive business practices. State laws designed to protect citizens at the local level should operate in concert with federal regulations and do not create difficult obstacles for national businesses, they say.
"Complying with those state laws means conducting your business in a lawful way and being truthful in communications you have with your customers," says Edward Sweda, a lawyer with the Tobacco Products Liability Project at Boston's Northeastern University School of Law. "Philip Morris is seeking to have the US Supreme Court bestow on it a shield of absolute immunity that Congress never authorized."
Tobacco firms besieged on many fronts
The suit in Maine is part of a massive legal assault being waged against the tobacco industry. In addition to the Maine case, 16 lawsuits are pending in 14 other states raising similar claims about deceptive marketing of "light" cigarettes. Beyond that, scores of lawsuits are pressing an array of other complaints.
In addition, the US Justice Department is waging its own battle against the tobacco companies. In 2006, a federal judge ruled that Altria and other tobacco firms violated civil racketeering laws in part by falsely marketing and promoting low-tar and light cigarettes as less harmful than regular cigarettes.
The 2006 verdict in US v. Philip Morris is being appealed. Oral argument is set to be heard next week, on Oct. 14, at the federal appeals court in Washington.
In the Maine case at the Supreme Court, the Justice Department and the FTC have filed a friend-of-the-court brief supporting the consumers' lawsuit. The brief says legal action against an alleged fraud in Maine is not preempted by federal laws or regulations.
"The Commission does not view respondents' lawsuit as undermining the FTC's policies in any way," writes Solicitor General Gregory Garre in his brief. "In the 1960s and 1970s, the FTC encouraged the adoption of complementary state enforcement mechanisms, including private rights of action for damages, which the FTC act does not provide."
Lawyers for Altria say a 1965 law, the Federal Cigarette Labeling and Advertising Act (FCLAA), reserves exclusive authority to the federal government over advertising related to smoking and health. Because designations like "light" and "low tar" were approved under the federal law, state lawsuits related to the use of those terms must be preempted, they say.
Lawyers for the Maine consumers respond that their suit is not a state-level attempt to micromanage issues related to smoking and health. Instead, they say, the suit is aimed at enforcing a Maine state law that prohibits companies from using deceptive business practices.
"For decades, Philip Morris has knowingly and falsely represented that certain brands of its cigarettes are 'light' or have 'lowered tar and nicotine,' even while designing its cigarettes to ensure that smokers would not receive reduced levels of tar or nicotine," writes Supreme Court advocate David Frederick in his brief to the court on behalf of the Maine consumers.
Altria's lawyer, Theodore Olson, says in his brief that the 1965 Labeling Act provides that "no requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes."
Mr. Olson says of the Maine lawsuit, "If the Labeling Act's express preemption provision does not preempt this claim, what does it do?"
The case is Altria Group and Philip Morris v. Stephanie Good (07-562).