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Altria Group Inc.’s Philip Morris USA unit and other U.S. cigarette makers asked a federal appeals court to block federal trial courts from applying a 2006 Florida decision they claim would deprive them of a fair trial in thousands of death and injury suits in the state.
The companies argue that a series of factual findings endorsed by the Florida Supreme Court in a 2006 decision - including that the companies sold defective products, that they conspired to hide information about the health effects of smoking and that they made false statements about their products - can’t fairly be applied in any of 4,000 cases against them in Florida federal court.
The companies claim that applying the 2006 ruling, which came in the Florida’s “Engle” tobacco class action, ‘would compromise an arbitrary deprivation of the defendants’ federal due process rights,” as a lower judge ruled in August 2008.
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A group of Florida smokers asked a federal appeals court Tuesday not to force each of them to prove that smoking causes illness in the thousands of individual lawsuits moving through federal court.
Such a ruling by the 11th Circuit Court of Appeals would mean that the more than 4,000 plaintiffs wouldn't need extensive -- and costly -- expert testimony to prove to each jury that their nicotine addiction caused lung cancer and other diseases.
Tobacco companies, meanwhile, asked the three-judge panel to conclude that the trials don't begin with an assumption that the industry acted with negligence and that their products were defective. Attorney Andrew Frey said that each plaintiff should be required to prove that point in court.
"That's the issue that's really before you today -- can the plaintiffs simply say negligence is established?" said Frey.
In a lively and complex Gordian Knot of an argument before a federal appeals court on Tuesday, lawyers for the nation's largest tobacco companies wrangled with attorneys for a woman whose husband died of lung cancer over whether factual findings in a 2006 Florida state case may be applied in some 4,000 federal death and injury suits.
The arguments, which went far longer than the 15 minutes allotted per side, focused primarily on whether plaintiffs going forward with individual suits in federal court would have to relitigate matters decided by the 2006 state court jury in Florida. Some of those findings include: tobacco companies falsified statements and made cigarettes that were dangerous.
Another issue for the lawyers -- New York University law professor Samuel Issacharoff for the plaintiffs-appellants and Mayer Brown's Andrew L. Frey, also of New York, for defendants-appellees R. J. Reynolds Tobacco Co., Phillip Morris USA Inc. and Lorillard Tobacco Co. -- was whether a federal district court has the authority to, essentially, overrule the Florida Supreme Court.
The three judges on the 11th U.S. Circuit Court of Appeals panel, Ed Carnes, Frank M. Hull and Senior Judge R. Lanier Anderson, pounced on Issacharoff as soon as he stepped to the podium. They peppered him with questions and hypotheticals; passed briefs fluttering with multicolored tabs back and forth, jabbing their fingers at relevant passages; and good-naturedly interrupted him and each other as they dissected the issues.
The companies claim that applying the 2006 ruling, which came in the Florida’s “Engle” tobacco class action, ‘would compromise an arbitrary deprivation of the defendants’ federal due process rights,” as a lower judge ruled in August 2008. . . .
In the appeal today in Atlanta federal court, the companies aren’t challenging findings by the Engle jury, upheld by the Florida Supreme Court, that smoking is addictive and that it can cause illnesses including cancer, emphysema and heart disease. . . .
The case is: Brown v. R.J. Reynolds Tobacco Co., No. 08- 16158, 11th U.S. Circuit Court of Appeals (Atlanta).
The list of government bailouts grows with each passing day. The plaintiffs’ bar — specifically, those who file Unfair Competition Law class actions — cheerfully joins the ranks of the bailout recipients having received a stimulus package for their law practices, courtesy of the California Supreme Court.
The court’s holding in In Re Tobacco Cases II seriously undermines the impact of the California voters’ initiative to curb lawsuit abuse and opens once again the floodgates for class...
Some attorneys are warning that California businesses may want to brace for the effects of a recent state Supreme Court decision that could "open the floodgates" to frivolous and nuisance class-action lawsuits.
Proposition 64 was a 2004 ballot measure aimed at reining in such lawsuits. But, according to some, the 4-3 California Supreme Court decision against tobacco companies in the latest round of class-actions against them appears to have negated some of that proposition's intent.
After years in which California had what corporate defense attorneys characterized as the most liberal class-action standing requirements in the nation, many believed the passage of Proposition 64 would usher in an era of fewer so-called frivolous lawsuits. . . .
Thus, the court sent it back for trial, allowing tobacco companies to be sued by plaintiffs for having been deceived into smoking.
Justices did not duck the issue of possibly negating the voters' intent when they passed Proposition 64, acknowledging, however vaguely, that the decision in Tobacco II bypasses the measure.
Where was the tobacco industry in the Prop. 64 campaign? Philip Morris USA, the world's largest cigarette-maker, gave $200,000 to help pass the initiative. Now that the consumers' tobacco lawsuit can proceed in California courts, Philip Morris has the most to lose.
To sell the measure to voters, the backers made no mention that tobacco companies could benefit. They made no mention of AIG, Countrywide or any other big business. As stated in the official ballot pamphlet, proponents said the goal was narrow: "Protect small businesses from frivolous lawsuits. Close the shakedown loophole."
The California Supreme Court struck a blow not just for the little guy with its ruling. It also decreed that initiative promoters ought to be a little less slick with their campaign rhetoric.
On May 18, 2009, the California Supreme Court in In re Tobacco II Cases (No. S147345), issued a landmark opinion addressing Proposition 64, in the context of fraud and false advertising. The Court's decision should be of interest to all companies that do business with California consumers or face class action claims in the state. The Court's 4-3 decision potentially permits plaintiffs who have not suffered injury to band together with thousands of other uninjured class members to seek monetary restitution and injunctive relief, provided they can find just one plaintiff who actually was injured to serve as the named class plaintiff. The plaintiffs' bar is ecstatic.
The Court's decision is in many ways an unwelcome return to the pre-Proposition 64 days. . . .
Under this reasoning, companies can expect to see plaintiffs' attorneys trolling for a plaintiff with actual injury, in an attempt to construct a large class of absent plaintiffs without regard to whether any of the absent members were injured. If courts permit these types of suits, California will have returned to a world in which plaintiffs can bring a representative action on behalf of thousands of people who might not have suffered any actual injury. . . .
Justice Moreno provided a framework for pleading actual reliance: the plaintiff must allege that the defendant's misrepresentations were an immediate cause, but need not show they were the sole cause or even the decisive cause of plaintiffs' injury. The allegation of reliance is not defeated where there is alternative information available to the consumer "even regarding an issue as prominent as whether cigarette smoking causes cancer." . . .
Regrettably, the Supreme Court's decision likely will reinvigorate the use of Section 17200 as a tool by which plaintiffs attempt to extract money from businesses. There had been a strong trend since the passage of Proposition 64 to reject putative class actions that seemed to involve little "real" injury to consumers. This new opinion will reverse that trend and leave California businesses exposed to more costly litigation.
The California Supreme Court reinstated a class action lawsuit against tobacco manufacturers on Monday, giving consumers the go-ahead to sue for fraudulent advertising they allege hid the harmful effects of tobacco use. . . .
From a practical standpoint, to require all potential class members to show personal loss would be impossible, and would effectively end fraud-based class actions in California. Indeed, the suit at issue potentially involves millions of consumers affected by the alleged fraud.
The case has been remanded to the Court of Appeals for further proceedings. The suit was filed in 1997 by lead plaintiff Willard Brown. The class was granted by a San Diego County Superior Court judge in 2001, who subsequently decertified the class after Prop 64's passage. The decertification was affirmed by the Court of Appeals in 2006.
In addition to the count under Prop 64, the suit alleges a violation of California's false advertising law. The action seeks an injunction and damages.
Audet & Partners, LLP, a well known plaintiffs' consumer law firm, noted that the Supreme Court of California recently issued a pro-consumer ruling regarding Proposition 64 and found that consumers still have the right to seek class action status under California law. The ruling, In re Tobacco II Cases, 09 C.D.O.S. 5993, was published on May 18, 2009.
"We want to congratulate the fine work done by attorney Mark Robinson, a renowned fellow trial lawyer, for his excellent work in arguing the case before the California Supreme court" noted Audet & Partners, LLP founder William M. Audet. "Without a doubt, Mark Robinson's advocacy carried the day," . . .
This new ruling will clarify a number of legal issues, and will reject the idea that in a class action, each and every class member will have to show "reliance" on a fraudulent act to win a class action. This will mean that the hundreds of thousands of California residents who have been harmed by tobacco companies may seek relief in court.
"This is a great day for all California residents who have lost money or have been seriously injured by the egregious conduct of large corporations" says William M. Audet.
Big Tobacco and other major businesses took a hit Monday when the California Supreme Court ruled that class actions over alleged fraud can go forward, even if it's impossible to tell whether every plaintiff was harmed by deceptive ads.
"We conclude that standing requirements are applicable only to the class representatives, and not all absent class members," Justice Carlos Moreno wrote for a 4-3 court.
The ruling is important because it clarifies that Proposition 64, passed by the voters in 2004, doesn't prevent average citizens from acting as so-called private attorneys general in class actions under the state's unfair competition law. Some experts had argued that the ballot initiative limited the filing of UCL suits to government officials, such as the attorney general.
"This is a great day for the consumers of California," Mark Robinson, a partner in Newport Beach, Calif.'s Robinson, Calcagnie & Robinson who represented the plaintiffs, said during a conference call. "The reality is that this gives the consumers rights to protect themselves from fraudulent advertising."
Smoker Willard Brown filed the class action against Philip Morris USA Inc. and several other tobacco manufacturers in 1997, accusing them of violating the state's unfair competition law by allegedly denying that smoking causes serious illnesses, such as cancer, and advertising cigarettes as non-addictive. The class was seeking only injunctive relief and restitution.
The California Supreme Court has revived a class-action lawsuit against the tobacco industry alleging its advertisements misled consumers into believing some cigarettes were less harmful than others.
The 4-3 decision Monday reverses two lower court rulings that barred the consumer lawsuit because of the 2004 passage of Proposition 64. The voter-approved initiative says only consumers claiming they lost money or property can file such class actions.
Altria Group Inc., the maker of Marlboro cigarettes, and other tobacco companies lost a bid to block a group lawsuit claiming that they misled thousands of Californians about the dangers of smoking.
A divided California Supreme Court today reinstated a class-action, or group, lawsuit against tobacco companies, saying each smoker in the case isn’t required to prove that they relied on specific false statements when the alleged misrepresentations were part of “an extensive and long-term advertising campaign.”
Altria, the Richmond, Virginia-based parent company of Philip Morris USA, is the largest U.S. tobacco company. The lawsuit names Philip Morris and seven other tobacco companies as defendants.
Consumers have the right to sue as a group over advertising they believe misled them into buying products, a divided state Supreme Court ruled Monday in reinstating a massive suit against the tobacco industry.
The 4-3 decision rejected business arguments that, if accepted, would have virtually prohibited class-action suits for false advertising by requiring proof that every plaintiff - millions of them, in some cases - had seen an allegedly deceptive ad and relied on it to make a purchase. The court majority said that evidence is required only for the single plaintiff or small group that represents the entire class.
"This gives the consumers rights to protect themselves from fraudulent advertising," said Mark Robinson, a lawyer for the smokers who sued tobacco companies in 1997.
The ruling could make California "the class-action capital of the country," retorted William Stern, a lawyer for business organizations and a co-author of Proposition 64, a 2004 ballot measure at the heart of the case. . . .
The case was filed under California's unfair-competition law, a far-reaching statute that lets private citizens sue on behalf of the general public over illegal business practices, including deceptive advertising. The law was narrowed by the business-sponsored Prop. 64, which requires a plaintiff to show that he or she had actually been harmed by the business practice.
Prop. 64 did not say, however, how the new requirement would affect class actions, in which an individual or a small group sues on behalf of consumers in the same circumstances. The crucial question Monday was whether every member of the class must show harm from the challenged business practice, a virtual impossibility in most cases.
The California Supreme Court revived a major class action lawsuit against the tobacco industry Monday, ruling that smokers could hold it accountable for alleged deceptive advertising.
After years of consumer cases meeting their demise in lower courts, the state high court's 4-3 decision helped resuscitate a key consumer law that voters sharply limited in 2004 in the wake of lawsuit scandals.
Justice Carlos R. Moreno, writing for the majority, said Proposition 64 was intended to stop "shakedown" lawsuits that enriched only lawyers and "did not propose to curb" genuine consumer grievances.
The decision, the court's most significant interpretation of Proposition 64, was a departure from many lower court rulings that interpreted the measure as having broader sweep.
Trial lawyers called the ruling a major consumer victory, while corporate litigators predicted a flood of frivolous lawsuits and accused the court of ignoring voters.
The case against the tobacco industry, which lower courts had dismissed, charges the industry with luring people to smoke with deceptive ads about cigarette safety. . . .
The court's three most conservative justices dissented, arguing that the majority ruling invited "mischief" and frivolous lawsuits that Proposition 64 was designed to halt.
The ruling will be applied "not only to the unsympathetic facts alleged in the case -- i.e., that larger tobacco companies lured consumers into nicotine addiction by falsely claiming over many years that cigarettes were safe -- but also to myriad situations in which the anti-consumer implications are far less dire," wrote Justice Marvin R. Baxter, joined by Justices Ming W. Chin and Carol A. Corrigan.