High court backs tobacco suit
Justices say companies can be sued under state laws over advertising for 'light' cigarettes.
WASHINGTON (CNN) -- Tobacco companies can be sued under state laws for deceptive advertising of "light cigarettes," the Supreme Court ruled in a closely divided ruling Monday.
The justices' 5-4 decision gives a green light to a number of pending lawsuits.
At issue was whether federal regulators have ultimate power over nationwide marketing practices, essentially blocking state courts from hearing lawsuits involving tobacco.
The broader question deals with "preemption" - whether federal laws or regulations preempt conflicting state law - in any context. The court's conservative majority had until now given business interests limited protection from such tort actions.
Writing for the mostly left-leaning majority, Justice John Paul Stevens noted federal regulators' "inaction" over issuing clear guidelines on "light" cigarette labeling.
"The FTC's [Federal Trade Commission's] various decisions with respect to statements of tar and nicotine content do not impliedly pre-empt respondents' [consumers'] claim," wrote Stevens, who added those claims must still be proven in a state court. He was supported by justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg, and Stephen Breyer.
The justices ultimately agreed with the consumer groups that the lawsuit was strictly about unfair marketing, and not about proving health-related damages.
Three Maine smokers had brought suit against the nation's largest cigarette maker, Philip Morris (PM) USA, and its parent company, Altria Group (MO, Fortune 500). The individuals had smoked Marlboro Lights or Cambridge Lights for at least 15 years, according to court records.
They alleged the brands' labeling as "light" and "lowered tar and nicotine" was misleading, and sued the company in state court. A federal appeals court eventually allowed the case to go forward.
The Federal Trade Commission, under authority from Congress, had approved for about four decades the testing method used by tobacco makers to measure tar and nicotine yields. The plaintiffs claimed that internal industry documents cast doubt on the "light" claims and that the FTC failed to act to rein in such advertising.
Smokers of light cigarettes, thinking they were getting less nicotine and tar, ingested more smoke with longer puffs, they claimed.
David Frederick, lawyer for Maine smokers, had argued the case did not hinge on advertising related "to smoking and health."
"All we have to prove is that the products were different and that we relied materially on a misrepresentation about what product to use," he said. "If you buy a car thinking it's a Ford and it's a Yugo but it still drives, you still have a claim under the lemon laws for deceptive advertising."
In dissent, Justice Clarence Thomas predicted confusion will occur in lower courts trying to decide whether a lawsuit is based primarily on health concerns or claims of false advertising. He was supported by Chief Justice John Roberts and justices Antonin Scalia and Samuel Alito.
Theodore Olson, a lawyer for the tobacco makers, told the high court that Congress "intended for consumers to receive certain information about the smoking of cigarette with specific labels, and the national economy was to be protected from confusing cigarette labeling and advertising regulations that might be non-uniform, confusing or diverse."
Congress had specifically preempted individual state claims such as this one under a 1965 law. Only the surgeon general's warnings on the dangers of smoking are allowed on cigarette packaging. The idea was to create uniform and clear labels, apart from myriad state warnings.
The Bush administration backed consumers in this case. The FTC only now is considering rule changes that for years allowed such "light" cigarette advertising.
The tobacco case is one of several addressed by the high court in recent years. The court in March ruled medical device makers could not be sued in state courts because the Food and Drug Administration has predominate jurisdiction over product safety.
The justices will also issue a ruling in the next few months dealing with prescription drug labeling. A Vermont musician sued Wyeth Pharmaceuticals (WYE, Fortune 500) over an anti-nausea drug that was improperly administered, resulting in the amputation of her arm. She claims the drug warnings were inadequate, but the company says it is exempt from such lawsuits.