Supreme Court Allows Fraud Lawsuits in 'Light' Cigarette Advertising Case

The Supreme Court ruled Monday that smokers could sue tobacco makers for fraudulent advertising claims over light-branded cigarettes, Reuters reported.

By a 5-4 vote, the justices ruled against Altria Group Inc's Philip Morris USA unit and held the Federal Cigarette Labeling and Advertising Act does not bar or preempt such state court lawsuits.

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The case was the first heard in the court's 2008-09 term, and concerned a group of Maine smokers who sued Philip Morris USA under a state law to stop the tobacco giant from marketing its light branded cigarettes.

In October, 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."

Attorney Ted Olson, arguing on behalf of Phillip Morris USA, says the language in the federal laws gave the commission 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.