WASHINGTON – Finding federal oversight lacking, a group of Maine smokers sued Philip Morris USA under a state law to stop the tobacco giant from marketing its light branded cigarettes. At the opening of the Supreme Court's 2008-09 term Monday, the nine justices heard arguments why those smokers should be able to seek relief in the state court when the Federal Trade Commission has oversight over the cigarette industry.
"When Congress enacted the Labeling Act, the 1969 Labeling Act, it gave no intention whatsoever to immunize cigarette makers for the false statements that they made in violation of anti-deception in the marketplace rules," said David Frederick, lawyer for the Maine smokers. "They didn't empower the FTC with any special rulemaking authority that applied industrywide, and in fact the FTC's enforcement authority with respect to individual companies was quite limited."
But attorney Ted Olson, arguing on behalf of Phillip Morris USA, says the language in the federal laws giving the FTC the authority to regulate the cigarette industry is absolute. "[T]he complaint challenges promotions of light cigarettes as less harmful and safer to smokers than regular cigarettes. But the statute — Congress — explicitly preempted any requirement respecting the promotion of cigarettes based upon smoking and health. In short, the respondents are seeking in state court precisely what Congress pre-empted," Olson said.
The merits of the case focus on Philip Morris's Marlboro Light and Cambridge Light brands and the related advertising efforts promoting the product's "light" and "lowered tar and nicotine" features. The class of Maine smokers sued PMUSA under that state's Unfair Trade Practices Act saying the advertising and labeling was deceptive. They contend that in response to the advertising, smokers attempt to compensate for the lowered tar and nicotine content by taking deeper puffs, keeping the smoke in their lungs for longer periods of time, or smoking more cigarettes. The trial court ruled against the smokers saying they had no standing under state law to file such a claim. But the First Circuit reversed, saying the smokers' claims could proceed under the Maine law.
PMUSA says the smokers' claims "are expressly preempted by the Labeling Act because they seek to impose a state-law requirement or prohibition 'based on smoking and health' with respect to the advertising or promotion of cigarettes, and impliedly preempted because they represent an obstacle to the FTCs low-tar policy." The preemption argument occupied much of the Court's time and is one they addressed in a similar case in February. That 8-1 opinion found the Food and Drug Administration's role in overseeing medical devices controlling over state laws. A similar opinion in this case would be favorable to Philip Morris.
Also seemingly favorable to Philip Morris is Justice Anthony Kennedy's trouble in accepting an argument made by the Maine smokers that they need not prove a link between smoking and one's health. "[I]f I take away from your oral argument that it is your position that this suit is not based on a link between smoking and health, I'm going to have difficulty in accepting your position in this entire case."
The summer break didn't seem to change the justices' apparent ideological split, as the more liberal justices took direct aim on Philip Morris USA's position and the more conservative justices peppered questions in the other direction. The most critical analysis came from Justice Samuel Alito, who took the FTC to task for the agency's seemingly permissive policies towards big tobacco. He specifically blasted a discredited testing procedure used to justify the "light" labels.
"The FTC's position seems to me incomprehensible. If these figures are meaningless, then you should have prohibited them — are misleading, you should have prohibited them a long time ago. And you've created this whole problem by, I think, passively approving the placement of these figures on the — on — in the advertisements. And if they are misleading, then you have misled everybody who's bought those cigarettes for a long time," Alito said.
A similar federal case in which a district court judge ruled against PMUSA and other tobacco companies in 2006 is under appeal and will be heard by a three-judge panel of the D.C. Circuit Court of Appeals on Oct. 14. An opinion in this case Altria Group v. Good is not likely until next year.