On the Docket Oct. 6: Tobacco, Unions & Federal Courts

Case: Altria Group, Inc v. Good

Date: Monday Oct. 6, 2008

Issue: Can anti-smoking interests file lawsuits in state courts against tobacco companies challenging their advertising methods and use of phases like "light" when describing its products? Or is it just the federal government through the Federal Trade Commission that can regulate these matters?

Background: Several years ago Altria Group Inc. became the new corporate name for Phillip Morris USA tobacco headquartered in Richmond, Virginia. PMUSA as it is called, produces the well know Marlboro line of cigarettes. In this case, it is its Marlboro Light and Cambridge Light brands that are under attack because of PMUSA's related advertising efforts promoting the product's "light" and "lowered tar and nicotine" features. A 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 smokers contend their case is nearly identical to one being pursued by the Federal Government and that their "state-law fraud claims are predicated on a Maine statute that imposes a generally applicable duty not to deceive. [The smokers] allege that Philip Morris violated that duty by falsely depicting its product as light and having lowered tar and nicotine. Because the duty not to deceive applies on equal terms to all products, [smokers'] claims are not preempted."

As for that similar federal case a district court judge ruled against PMUSA and other tobacco companies in 2006. That case is under appeal and will be heard by a three judge panel of the DC Circuit Court of Appeals on October 14th.

Case: Locke v. Karass

Date: Monday Oct. 6, 2008

Issue: Can non-union public employees have money withdrawn from their paychecks for use beyond the specific collective bargaining costs associated with their Local.

Background: This is a union dues case that also comes from Maine. Daniel Locke and 20 other current and former state employees are not members of the Maine State Employees Association. Nonetheless under state law they must pay dues to the union to cover the cost of collective bargaining for their local union contract. However, their Local collected dues in excess of what was needed for their contract and kicked those extra dollars to a fund for other union activities under the direction of their national affiliate. Locke and the others sued contending the compulsory collection of dues for non-members is strictly for use by their Local. But the trial court and the First Circuit ruled against the employees. And now the non-union workers have appealed again to the Supreme Court.

Case: Vaden v. Discover Bank

Date: Monday Oct. 6, 2008

Issue: Does specific language in the Federal Arbitration Act compel certain disputes to be resolved in federal courts?

Background: Betty Vaden was a Discover credit card holder for more than a decade. But when her outstanding balance topped $10,000 in 2003, Discover filed action in Maryland state court to recover the debt. Vaden filed a counter-class action claim saying Discover had improperly assessed fees and other charges to her and other cardholders. Discover then sought to move the counter-claim into binding arbitration by a federal judge. Vaden claims Discover under the disputed terms of the credit card agreement cannot force arbitration in federal courts. Lower courts have ruled in favor of Discover's attempts to force arbitration.