A suit was filed against Phillip Morris claiming its practice of labeling cigarettes as “Light” qualified as consumer fraud. The Appellate Court denied Phillip Morris’s argument that it was immune from such lawsuits under federal law so the company is appealing to the U.S. Supreme Court.
The plaintiffs in Altria v, Good, 501 F. 3d 29 (1st Cir. 2007) alleged that Phillip Morris violated state laws prohibiting fraudulent misrepresentation in its false promotions and advertising for Marlboro and Cambridge Lights as “Light” with “Lowered Tar and Nicotine” when in fact the “Light” cigarettes would not deliver any less tar or nicotine to the smoker.
Phillip Morris responded to plaintiff by stating that the consumer fraud claims are preempted by the Federal Cigarette Labeling and Advertising Act, and preempted implicitly in the “efforts of Congress and Federal Trade Commission for 40 years to implement a national, uniform policy of informing the public about the health risks of smoking.”
The majority of the defendant’s argument rests on its assumption that the plaintiffs are bringing a claim for a failure to warn and not for fraud. Because a failure to warn would fall under the banner of warning label regulations, which is overseen by the federal government, any such claims would need to be brought under federal, and not state, law.
However, the US Court of Appeals for the First Circuit did not see plaintiffs’ claim as dealing with a failure to warn, but rather with Phillip Morris fraudulently representing its product. And because the federal law does not deal directly with fraud there is nothing to preempt the state law from taking precedent. Therefore, Phillip Morris is not immune from litigation dealing with plaintiffs’ claim because federal law does not negate consumer fraud claims related to the sale of light cigarettes.
To reach a final conclusion, the US Supreme Court has agreed to review Phillip Morris’s argument that federal law totally immunizes it from suits regarding consumer fraud claims as to “light” cigarette labeling. The case is set for oral argument in the fall of 2008.