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Lisa Watson filed a class action lawsuit against the tobacco company Philip Morris, claiming that the company had violated Arkansas law by misrepresenting the amount of tar and nicotine in cigarettes branded as "light."
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The U.S. Supreme Court today unanimously reversed an Eighth Circuit Court of Appeals ruling that, if it had been upheld, would have severely damaged the ability of consumers harmed by corporate fraud to achieve a remedy in state court.
The Watson, et al. v. Philip Morris Companies, Inc. case (today’s opinion is here while the docket is here) began as a class action, brought in state court under Arkansas law, based on Philip Morris’ fraudulent marketing and sale of so-called “light†cigarettes. Smokers of those cigarettes were deceived by Philip Morris’ scam wherein those “light†cigarettes were characterized as a safer, or less hazardous alternative, to regular cigarettes.
The above-entitled matter came on for oral argument before the Supreme Court of the United States at 11:18 a.m. APPEARANCES: DAVID C. FREDERICK, ESQ., Washington, D.C.; on behalf of
the Petitioners.
IRVING L. GORNSTEIN, ESQ., Assistant to the Solicitor General, Department of Justice, Washington, D.C.; on behalf of the United States, as amicus curiae, supporting the Petitioners.
THEODORE B. OLSON, ESQ., Washington, D.C.; on behalf of the Respondents. . . .
MR. FREDERICK: Thank you, Mr. Chief Justice, and may it please the Court:
The Eighth Circuit held that Philip Morris is subject to such specific and detailed regulations by the Federal Trade Commission that it is entitled to remove this purely State law case from State court to Federal court under the Federal officer removal statute. That holding is erroneous and should be reversed for at least three reasons.
The Supreme Court opened the door to much bigger verdicts against the major tobacco companies in a unanimous decision which said that many if not most smoker law suits against the companies can proceed in state courts where damages tend to be much higher, rather than in federal courts as the defendants had pushed for. "Smokers killed, disabled, or injured by cigarettes which they smoked because of tobacco company's lies now have a better chance of obtaining real justice in amounts which come closer to compensating them," said law professor John Banzhaf of Action on Smoking and Health (ASH)
On Monday, the United States Supreme Court unanimously ruled against Philip Morris in a case involving a class action lawsuit filed against the company in Arkansas.
The Court's decision was narrow, procedural, and certainly correct, but the underlying cause of action is reason for serious concern, as it represents the plaintiffs' bar's newest form of lawsuit abuse. . . .
In essence, the suit, like others of its ilk, alleges that tobacco companies' marketing of "light" cigarettes is an unfair and deceptive business practice under Arkansas state law.
Tobacco companies marketing "light" cigarettes have done so under a specific 1966 federal law in which Congress set standards for measuring and reporting tar and nicotine. Every labeling decision and every product test has fallen within these federal guidelines.
It should hardly come as a surprise, then, that tobacco companies are peeved about being subjected to potentially huge litigation exposure by state courts that disagree with the Congressional rule. . . .
Last fall, a Brooklyn judge, Jack Weinstein, certified a similar federal class action — now on appeal at the Second Circuit — involving 50 million plaintiffs.
Those who hate the tobacco companies should not assume that state consumer protection acts only will be abused against the manufacturers of cigarettes. Unless legislators reform sloppy consumer protection laws, any company that markets its products could be subjected to similar suits.
Tobacco companies, drug manufacturers, automakers and other manufacturers are especially fearful of trial in states with elected judges, like Arkansas, suspecting that they are more prone to consider the suffering of people. We don't know if that is true, but it does not matter. State courts are particularly suited to try torts, which is a legal issue largely framed by state law. Justice is swifter and nowadays just about as sure in state courts as in the tenured federal system.
Good decision, Supreme Court! States' rights are alive and well.
A U.S. Supreme Court ruling yesterday that went against Philip Morris USA should have little impact on light-cigarette lawsuits and other class actions, the company said.
But some legal experts said the ruling -- which forbids the company from moving a lawsuit filed in an Arkansas state court to federal court -- takes away one avenue that the company could use to defend itself in similar cases.
The lawsuit, Watson v. Philip Morris, was filed by consumers who smoked Marlboro Lights and Cambridge Lights. The suit claimed that Henrico County-based Philip Morris violated the Arkansas Deceptive Trade Practices Act by fraudulently marketing "light" cigarettes as having less tar and nicotine.
The U.S. Supreme Court's decision to reverse rulings by lower federal courts in the Watson case and remand it to state court does not negatively affect the ultimate outcome of the case or that of other "Lights" cases, Philip Morris USA said today.
"Today's ruling is narrow and merely determined whether the Watson case should be heard in federal court or state court. We have compelling defenses to the Watson claim that have been advanced in state courts," said William S. Ohlemeyer, Philip Morris USA vice president and associate general counsel.
Ohlemeyer added that the Watson case will have minimal effect on "Lights" or other class actions filed against the company after enactment of the Class Action Fairness Act in 2005, which requires most class actions to be heard in federal court. . . .
Today's decision clarified the procedural issue of when defendants, who are acting under a federal agency like the FTC and sued in state court, can remove the case to federal court. While today’s decision does not directly address the issue of whether the federal labeling act or agency regulation of a defendant's advertising and marketing activities prevents plaintiffs from suing under state consumer fraud laws, the Court did note that Philip Morris USA was acting pursuant to “… considerable regulatory detail and supervision….â€
Philip Morris USA has long maintained that Congress and the FTC created a comprehensive regulatory scheme for marketing "low tar" and "Lights" cigarettes and, that these types of class actions are pre-empted by federal law or exempted from state consumer fraud laws. Many courts have so held and today’s decision adds further support to those rulings.
Today's ruling is narrow and merely determined whether the Watson case should be heard in federal court or state court. We have compelling defenses to the Watson claim that have been advanced in state courts.William S. Ohlemeyer, Philip Morris USA vice president and associate general counsel, on the SCOTUS ruling.
In a major blow to tobacco companies, the US Supreme Court yesterday denied tobacco giant Philip Morris' s request to shift all smokers' lawsuits to federal courts, which generally give greater leeway to corporations and smaller damage awards to those claiming harm from years of exposure to tobacco smoke.
The decision, in a case involving the alleged marketing deception of "light" cigarettes, is expected to affect liability lawsuits against tobacco companies filed in 20 states, including Massachusetts. Some state awards in recent years have been in the billions of dollars, although many of those judgments were later overturned on appeal. . . .
"This is a big loss for the industry," said Edward L. Sweda Jr. , senior attorney for the anti smoking Tobacco Products Liability Project at Northeastern University School of Law in Boston. "If the appeals court ruling had been upheld, it would have basically eliminated state courts as a venue for lawsuits against the tobacco companies."
Sweda said other industries, such as pharmaceutical companies and automakers, could argue that lawsuits against them should move to federal court because of their relationship with federal regulators.
William Ohlemeyer, associate general counsel for Philip Morris, downplayed the Supreme Court's decision as "narrow" and insisted it would not affect the case.
"We have compelling defenses to the Watson claim that have been advanced in state courts," Ohlemeyer said in a statement. . . .
In Massachusetts, a suit filed by Lori Aspinall and Thomas Geanacopoulos in 1998 is now before the state Superior Court. In 2004, the Massachusetts Supreme Judicial Court, in a 4- to -3 decision, allowed smokers to proceed with a class-action suit over the marketing of light cigarettes.
The U.S. Supreme Court today delivered an important victory for consumers by ruling that a class-action lawsuit against Philip Morris alleging the fraudulent marketing and sale of “light†cigarettes can be heard in state court, in this case in Arkansas. In overturning a lower court ruling, the Court unanimously rejected Philip Morris’ argument that such cases should only be heard in federal court because they claimed that tobacco companies acted as “officers†of the United States government in their testing and marketing of light cigarettes. Only a tobacco company would have the gall to argue that its deceptive practices are government-sanctioned acts.
This ruling allows plaintiffs the opportunity to pursue the numerous “lights†class-action cases that have been filed in state court . . .
As Federal Judge Gladys Kessler ruled in the Justice Department’s racketeering lawsuit against the tobacco companies and as numerous health authorities, including the National Cancer Institute, have found, the tobacco companies for decades have deceived consumers and deterred smokers from quitting by marketing “light†cigarettes as less hazardous despite knowing from their own research that this was not the case.
Now, anti-tobacco activists and Tillery say the U.S. high court has cast doubt on the extent to which the cigarette companies acted with federal power.
"We have found no evidence of any delegation of legal authority from the FTC to the tobacco industry association" which tested cigarettes for the trade commission, Justice Stephen Breyer wrote on behalf of the justices.
That position could help attorneys in some 20 states, including Tillery, who claim that Philip Morris violated state consumer fraud laws by hoodwinking smokers into believing that light cigarettes were less harmful than regular or full-flavor brands.
Tillery believes that decision and related legal briefs from the government saying companies were never specifically ordered or given approval to use the "light" label could help him persuade the Illinois Supreme court to reopen the Madison County case.
Philip Morris' parent corporation Altria Group issued a statement denying that Monday's ruling would effect lawsuits over light cigarettes. "Today's decision does not directly address the issue of whether (federal regulations on tobacco companies) prevents plaintiffs from suing under state consumer fraud laws," a statement said.
Today's decision does not directly address the issue of whether (federal regulations on tobacco companies) prevents plaintiffs from suing under state consumer fraud laws.Philip Morris statement on the Supreme Court's Watson ruling.
The U.S. Supreme Court ruled Monday that a light cigarette case filed in 2003 against Philip Morris USA in Arkansas should be heard in state court rather than in federal court, as lower courts had previously ruled. . . .
Like the $10.1 billion Illinois case that was thrown out by the Illinois Supreme Court last year, the so-called Arkansas case alleges Philip Morris violated the Arkansas Deceptive Trade Practices Act by marketing "light" cigarettes as having less tar and nicotine, the suit stated. The company allegedly designed the cigarettes to register lower levels of tar and nicotine in government-approved testing than would be delivered to the consuming public the suit claims.
The so-called Watson case is among 14 lesser-known cases that are on various stages of appeal by Philip Morris. Only one significant case is still pending against Philip Morris.
Supreme Court on Monday snuffed out a tobacco industry legal tactic, ruling that Philip Morris can't shift a lawsuit from state to federal court. . . .
"The upshot is that a highly regulated firm cannot find a statutory basis for removal (to federal court) in the fact of federal regulation alone," Justice Stephen Breyer wrote.
The ruling emboldens consumer advocates who have challenged Philip Morris' marketing of Cambridge Lights and Marlboro Lights cigarettes. The ruling also limits the legal maneuvering room available to pesticide companies and other heavily regulated industries.
"We're delighted that we won unanimously," Washington-based attorney David C. Frederick, who's challenging the tobacco companies, said in a brief telephone interview.
But as often happens, the Supreme Court's 14-page majority opinion on Monday didn't touch the underlying merits of the tobacco industry lawsuit. The justices didn't opine as to whether Philip Morris deceived consumers by advertising Cambridge Lights and Marlboro Lights as being low in tar and nicotine.
Instead, the court issued a technical ruling that nonetheless could sweep widely.
The U.S. Supreme Court gave a boost to smoker lawsuits that claim tobacco companies deceptively marketed ``light'' cigarettes, ruling that Altria Group Inc.'s Philip Morris USA can't shift a case into federal court. ...
The ruling, which overturns a lower court decision, may affect several lawsuits against Philip Morris and Reynolds American Inc.'s R.J. Reynolds Tobacco unit, including Missouri and Minnesota cases in which the issue has arisen. ...
In an investors' note, Morgan Stanley analyst David Adelman said that characterization ``should be moderately helpful to the industry's ongoing defense.'' Adelman rates Altria shares as ``overweight.''
Sweda, the anti-tobacco lawyer, called that characterization ``pure spin and contortion.''
``These lawsuits are about fraudulent marketing and other practices that the companies engaged in,'' he said. ``They voluntarily engaged in those practices, and they most certainly were not just following orders from some government agency.''
Held: The fact that a federal agency directs, supervises, and monitors a company’s activities in considerable detail does not bring that com-pany within §1442(a)(1)’s scope and thereby permit removal. Pp. 3– 14. (a) Section 1442(a)(1)’s words “acting under†are broad, and the statute must be “liberally construed.†Colorado v. Symes, 286 U. S. 510, 517. But broad language is not limitless. And a liberal con-struction nonetheless can find limits in a text’s language, context,history, and purposes. . . .
differences in the degree of regulatory detail or supervision cannot by themselves transform Philip Morris’ regulatory compliance into the kind of assistance that might bring the FTC within thescope of the statutory phrase “acting under†a federal “officer.†Supra, at 8. And, though we find considerable regulatory detail and supervision, we can find nothing that warrants treating the FTC/Philip Morris relationshipas distinct from the usual regulator/regulated relationship. This relationship, as we have explained, cannot be construed as bringing Philip Morris within the terms of the statute.
For these reasons, the judgment of the Eighth Circuit isreversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.