Wednesday, January 23, 2008

Supreme Court to Review “Light” Cigarette Advertising Case

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

The U.S. Supreme Court has agreed to consider whether smokers can pursue a suit alleging that tobacco company Philip Morris made fraudulent misrepresentations in violation of the Maine Unfair Trade Practices Act by advertising and promoting Marlboro and Cambridge Lights as “light” and having “Lowered Tar and Nicotine.”

The Court granted Philip Morris’s petition for review of a 2007 decision by the U.S. Court of Appeals in Boston (Good v. Altria Group, Inc., CCH Advertising Law Guide ¶62,656; CCH State Unfair Trade Practices Law ¶31,454).

Preemption by Federal Law

The question presented for review, according to the petition, is whether state law challenges to FTC-authorized statements regarding tar and nicotine yields in cigarette advertising are expressly or impliedly preempted by federal law.

The appellate court held that the smokers’ state law claims were not expressly preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA). In addition, the court rejected Philip Morris’ contentions that the smoker’s state law claims were impliedly preempted by the FTC’s oversight of cigarette advertising and barred by the Maine statute’s exemption for actions otherwise permitted under laws as administered by any regulatory board or officer acting under the statutory authority of the United States.

Before the appellate court, Philip Morris contended that the smokers’ state law claims stood as an obstacle to the FTC’s policy, expressed in a 1971 consent order, of allowing advertising of tar and nicotine claims as long as they were substantiated with numerical results derived through testing according to the Cambridge Filter Method and the results were published in all brand advertisements.

Absence of FTC Rule

However, since its 1969 agreement with the tobacco companies, the FTC had never issued a formal rule specifically defining which cigarette advertising practices violated the FTC Act and which did not, according to the appellate court.

Section 57b(e) of the FTC Act specifically provided that state law rights of action survived the FTC’s efforts at judicial enforcement of its own federal standards: in other words, that those efforts are in addition to, and not in lieu of, other available remedies, the appellate court noted.

There appeared to be no purpose for the provision, in the appellate court’s view, other than to allow further relief from unfair or deceptive acts or practices under state law even after the Commission had already challenged them through litigation under the FTC Act.

The FTC could not preempt state law actions arising out of particular practices simply by entering into a consent order allowing them to continue, the appellate court concluded.

Petition for Review

The petition is Altria Group, Inc. v. Good, Docket No. 07-562, filed October 26, 2007, cert. granted January 18, 2008.

In its petition, Philip Morris maintained that the appellate court’s decision is at odds with Supreme Court’s decision Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) and in conflict with the decisions of other courts.

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