Altria/ Philip Morris--labeling of cigarette packages

This case, which kicks off the October 2008 term, deals with the issue known as "federal pre-emption," which has to do with whether a law passed by the Congress prohibits challenges to its validity or sufficiency under State law. In particular, this case deals with cigarette labeling. We all know that cigarette-makers (Philip Morris is one of the co-petitioners in the case) are required to list nicotine content of their cigarettes on the package, and they are also permitted to make representations such as "light" or "lower tar and nicotine" to describe cigarettes that have a lower nicotine level, as a result of what is known as the Cambridge Filter Method Test. The question this case deals with is whether someone may bring a suit against cigarette manufacturers under a state unfair trade practices law and claim that this characterization ("light" or "low in tar") is, while accurate in a strict numerical way, actually a deceptive characterization. The point of the challenge would be that even if the cigarette "blew" low on the Cambridge test, that smokers "compensate" for the lesser amount of tar they receive through these cigarettes by dragging longer on it, covering up the "escape holes" for some of the tar or smoking more cigarettes. The lawsuit claims that the cigarette manufacturers know that smokers do this and that, ultimately, these smokers end up getting the same amount of tar that they would had they been smoking unfiltered or higher tar cigarettes. Therefore, the smokers claim that the labeling, though complying with federal law, actually is deceptive and that under state law they ought to be able to sue for deception and recover big bundles of money.

Well, this is the issue. Let's doll it up now in more appropriate legal language.

The Case

The case comes out of the great state of Maine; the decision of the First Circuit Court of Appeals (Aug. 31, 2007) is at 501 F3d 29. If you know the following five things you are "set" for this case:

1. In 1964 the Surgeon General, for the first time, issued a report concluding that smoking causes lung cancer. In 1965 Congress enacted the Labeling Act which, among other things, mandated that all cigarette packages contain a label warning the public about the adverse health effects of cigarette smoking (15 USC sec. 1331). Cigarette makers were also allowed to to use shorthand descriptors, given above, to characterize their product.

2. In 1969 Congress revised the law, Pub. L. No 91-222, 84 Stat. 87, to "update" the pre-emption provision in the original law. Under the 1969 Act, States are precluded from imposing any:

"requirement or prohibition based on smoking and health...with respect to the advertising or promotion"

of cigarettes labeled in conformity with the statute's requirements (15 USC sec. 1334(b)). It is the interpretation of this clause that is at the heart of our case. Is the ability to bring a lawsuit under Maine's Unfair Practices Act (a type of consumer protection law in every state) precluded by the language just bolded?

3. In Cipollone v. Liggett Group (505 US 504 (1992)), the Court held that certain state-law claims against tobacco companies were pre-empted by the amended version of the 1965 Act (the "Labeling Act"). A majority of the Court in 1992 concluded that common-law tort claims [which differs from our case, because our case deals with a statutory claim] constitute "requirements or prohibitions" within the meaning of the law bolded above (505 US at 521). Yet, things were a bit muddled in this decision. Cipollone dealt with common-law fraud claims, but the Court divided on what theory of fraud ultimately underlay the claim. The plurality of Justices concluded that a fraudulent misrepresentation based on "allegedly false statements of material fact made in advertisements" for cigarettes would not be pre-empted because "such claims are predicted not a duty 'based on smoking and health' (language in the statute) but rather on a more general obligation--the duty not to deceive." Thus, while closing the door in general on state law claims, the Court left it open just a little bit regarding deceptive advertising.

4. This case, then, tries to go through that narrowly-opened door by arguing that the "lower" label is, purely and simply, deceptive. The First Circuit Court of Appeals agreed with Ms. Good et al. The Fifth Circuit, however, read things precisely the opposite, and decided that such claims are precluded under state law. Thus, the Court faces a split in the Circuits, a problem which it generally likes to solve. The issue here, then, does not relate ultimately to the rightness of Ms. Good's cause; it relates to whether her suit can even be considered in court.

5. What may make all of this a little moot is a decision (dicussed here) by the Federal Trade Commission in July of this year to withdraw its guidance from the mid-1960s that allows cigarette companies to claim that they use an FTC-approved method for measuring tar and nicotine content. The reason? Because the science of measurement and what it means has changed since the mid-1960s. The Cambridge Filter Method in fact does not provide meaningful information on the amounts of tar and nicotine smokers receive from cigarettes. This decision, if enacted after a notice and comment period, will still permit the cigarette makers to claim they have "lower" tar and nicotine, but they won't be able to claim that an FTC-approved test yielded that result. So, it is unclear exactly what effect this will have on the case before the Court, though it indicates that changes are coming with respect to how we label cigarettes.

Conclusion

Pre-emption is a "big deal" for the Roberts Court. The issue is simple--if the feds (i.e., Congress) set a policy, prohibiting the states from doing something, are the States prohibited from doing anything that relates to the product regulated by the feds? (We can think also of the safety of medical devices or drugs, both of which are or have been on the Court's agenda). Even if the Court throws out Ms. Good's challenge, changes in labeling are on the way.

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