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UPDATE 1-US top court rules against Philip Morris 

The U.S. Supreme Court ruled on Monday that a class-action lawsuit against Philip Morris USA, a unit of Altria Group Inc., should not be decided in federal court, handing a defeat to the tobacco company.

The justices unanimously reversed a ruling that allowed Philip Morris to transfer the lawsuit to federal court from the Arkansas state court where it initially was filed.

At issue is a suit filed against Philip Morris by two Arkansas women alleging that the company engaged in unfair business practices in marketing its low-tar Cambridge Lights and Marlboro Lights cigarette brands.

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Philip Morris Loses U.S. High Court Case on Suit Site (Update2) 

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 justices unanimously said Arkansas state courts should handle the suit by smokers Lisa Watson and Loretta Lawson, not the federal tribunals that corporate defendants tend to prefer. Philip Morris argued that it could shift the case because the Federal Trade Commission closely supervised testing of the cigarettes.

``We can find nothing that warrants treating the FTC/Philip Morris relationship as distinct from the usual regulator/regulated relationship,'' Justice Stephen Breyer wrote for the court in Washington.

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We can find nothing that warrants treating the FTC/Philip Morris relationship as distinct from the usual regulator/regulated relationship.
Supreme Court Justice Stephen Breyer, in the Watson decision.

Supreme Court Rules Against Philip Morris ($$) 

The U.S. Supreme Court ruled unanimously against Philip Morris Cos. in its bid to move an Arkansas class-action lawsuit over the marketing of light cigarettes from state to federal court.

The opinion overturns a lower court ruling that had sided with the tobacco giant. The lawsuit, which has not yet been to trial, will now go back to lower courts and will likely be heard by a state court.

Philip Morris, a unit of Altria Group Inc., has been trying to get the case moved out of the Arkansas courts. Corporations prefer the uniform and sometimes tougher standards that product-liability cases face in a federal court, prompting efforts in both the courts and legislatures to force more cases out of state court systems.

Justice Stephen Breyer wrote the unanimous opinion that rejected arguments from Philip Morris that the Federal Trade Commission's detailed regulation of light cigarette monitoring required the case to be heard by a federal court. "Neither language, no history, nor purpose lead us to believe that Congress intended any such expansion," Justice Breyer wrote.

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• U.S. justices say Philip Morris cannot move case by cigarette smokers to federal court 

The Supreme Court ruled Monday that Philip Morris Cos. Inc. cannot move a lawsuit by cigarette smokers into federal court.

The unanimous decision came in a case that consumers filed against the cigarette company in state court in Arkansas.

The potential for large damage awards from state court juries makes the federal court system a more desirable place for tobacco companies and other defendants sued in class-action cases.

Philip Morris, a part of Altria Group Inc., moved the case to federal court in Little Rock, Arkansas, saying it could do so because the company was pervasively regulated by the Federal Trade Commission. . . .

At issue is an unusual use of a federal law on moving cases out of state courts. The law protects anyone acting under a federal officer from interference by hostile state courts.

"A highly regulated firm cannot find a statutory basis for removal" to a federal court "in the fact of regulation alone," wrote Justice Stephen Breyer. What the FTC is doing "sounds to us like regulation, not delegation."

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A highly regulated firm cannot find a statutory basis for removal [to a federal court] in the fact of regulation alone. [What the FTC is doing] sounds to us like regulation, not delegation.
US Supreme Court Justice Stephen Breyer, in the SCOTUS opinion denying Philip Morris' attempt to move the Watson case to Federal Court.

Judge asks if he can reopen cigarette suit 

A judge whose $10.1 billion judgment against Philip Morris USA in a lawsuit over light cigarettes was thrown out on appeal is asking a court whether he can revive the case.

Madison County Circuit Judge Nicholas Byron this month asked the Mount Vernon-based 5th District Appellate Court of Illinois to rule whether he has authority to reopen the lawsuit, citing possible new evidence stemming from a separate tobacco case pending before the U.S. Supreme Court.

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• Judge Asks Whether He Can Reopen Lawsuit Over Light Cigarettes  

A judge whose $10.1 billion judgment against Philip Morris USA in a lawsuit over light cigarettes was thrown out on appeal is asking a court whether he can revive the case.

Madison County Circuit Judge Nicholas Byron this month asked the Mount Vernon-based 5th District Appellate Court of Illinois to rule whether he has authority to reopen the lawsuit, citing possible new evidence stemming from a separate tobacco case pending before the U.S. Supreme Court. . . .

But the attorney in that suit, Stephen Tillery of St. Louis, now says his original argument is supported by the U.S. solicitor general in a separate case before the nation's high court. Paul Clement -- the Bush administration's top Supreme Court lawyer -- said in the new case, Watson v. Philip Morris, that the FTC never authorized or ordered Marlboro Lights to be labeled as "lights" or use the words "lower tar and nicotine."

"There is no question the Supreme Court of Illinois got it wrong when it said the words were authorized by the FTC," Tillery said Monday. "The question now is what the courts can do about it."

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UPDATE: Philip Morris Faces Struggle To Change Court Venue ($$) 

The U.S. Supreme Court Wednesday appeared skeptical of the argument by Philip Morris Cos. to move an Arkansas class-action lawsuit over marketing of light cigarettes from state to federal court.

Philip Morris, a unit of Altria Group Inc. (MO), has been trying to get the case, which hasn't yet been to trial, moved out of the Arkansas courts. Corporations prefer the uniform and sometimes tougher standards that product liability cases face in a federal court, prompting efforts in both the courts and legislatures to force more cases out of state court systems.

In this case, the Supreme Court is considering whether the Federal Trade Commission's involvement in marketing standards for low-tar or light cigarettes gives Philip Morris the power to have the case moved.

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• Lawyer seeks to revive tobacco verdict 

A St. Louis lawyer wants a $10.1 billion judgment against Philip Morris revived because of new evidence in a separate case before the U.S. Supreme Court.

Stephen Tillery said his original argument the tobacco giant fooled customers into believing Marlboro Lights were lower in tar and nicotine than regular cigarettes was supported by the U.S. solicitor general in a separate case.

Tillery's claim had been overturned by the Illinois Supreme Court, which said the Federal Trade Commission had approved cigarettes' "light" label, so Philip Morris could not be held liable for any implications.

But in a new case -- Watson v. Philip Morris now pending before the high court -- Paul Clement, the federal government's primary Supreme Court advocate, said the trade commission never approved or ordered tobacco companies to label their products, The St. Louis Post-Dispatch reported.

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• Tillery and Byron team up to revive $10.1 billion Philip Morris verdict 

Madison County Circuit Judge Nicholas Byron and attorney Stephen Tillery have brought back to life a $10.1 billion light cigarette class action case that Byron dismissed last year under an order from the Illinois Supreme Court.

At a May 2 hearing Byron told Tillery that he would certify for appellate review a question on his jurisdiction in Price v. Philip Morris. . . .

At Wednesday's hearing Tillery said the U.S. Solicitor General took a position that the FTC did not authorize labeling of light cigarettes.

After reading from a brief in a case before the U.S. Supreme Court, Tillery said, "Directly contrary factually to the holding of the Illinois Supreme Court. Absolutely at odds with it."

The brief stated that the FTC never adopted any official regulatory definitions of the terms 'light' or 'low tar.'

"The question as I go forward is not whether or not this would change the result," Tillery said. "There is no doubt it changes the result."

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EDITORIAL: Our State Supreme Court Super-Justice 

Or when his favorite intellectual inspiration, Belleville plaintiff's lawyer Steven Tillery, just happens to ask. Byron once tried to award Tillery $1.2 billion (with a 'b') in legal fees for going to the trouble of initiating a class action lawsuit against cigarette maker Philip Morris. The man can be quite convincing.

And Tillery was once more last week, charming Judge Byron into joining him on a brand new crusade in a novel new role: State Supreme Court Super-Justice.

Tillery's request: defy Illinois' highest court and re-open Price v. Philip Morris, that case of the overturned-and-then-dismissed $10.1 billion Byron bench verdict that made them both famous. . . .

Philip Morris' lawyer, George Lombardi, was baffled.

"We shouldn't even be in this room talking about this because this case is over; it's dead," he said.

Indeed. "We reverse the judgment of the circuit court and remand with instructions to dismiss" reads pretty crystal clear to us. Then again, when you're playing justice system make believe, anything is possible.

"I am here to follow the law and that's all I intend to do, period, in spite of the intimations, by the way, of various members of the media," Byron promised.

Then follow it, Judge. Just follow it

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• Sebok: Philip Morris's Argument to the Supreme Court in Watson v. Philip Morris, About Where a Case about Cigarettes Sold As "Lights" Should Be Tried 

Interpreting the Removal Statute: Tobacco Companies as "Federal Officers"?

How did the tobacco companies get the case against them transferred from state court to federal court, in the Watson case itself?

They invoked the "federal officer removal" statute. This law authorizes removal of a case from state to federal court by the "United States or any agency thereof or any officer (or any person acting under that officer) of the United States or any agency thereof, sued in an official or individual capacity for any act under color of such office."

The tobacco industry companies who are parties in Watson argue that when they performed the tests rating the tar and nicotine in light cigarettes that are the heart of the plaintiffs' suit, they themselves were acting as "federal officers" because the tests were required by the Federal Trade Commission.

This argument was accepted by the federal district court and the U.S. Court of Appeals for the Eighth Circuit. Yet it is so implausible, it is hard to know where to begin to criticize it. . . .

I predict that the Eighth Circuit's decision will be reversed by a large majority--if not a unanimous vote--of the Court. There are lots of things wrong with the plaintiffs' "lights" cases, but they won't be solved by preserving the ridiculous fiction that the cigarettes companies were somehow acting on the government's behalf when they took their product to market.

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U.S. Agrees: Tobacco Companies Aren't Federal Officers 

Several months ago, I posted an overview of consumer cases with a reasonable chance of being granted for review by the U.S. Supreme Court. Among them was Watson v. Philip Morris, a truly remarkable case in which the Eighth Circuit held that a tobacco company was entitled to remove a case to federal court under the federal officer removal statute--a statute designed to protect federal officers and employees. The Justices will take up the matter at their private conference this Friday.

Watson may be one of those relatively rare cases in which a federal appellate court's decision on an important and recurring issue is so outrageously wrong that the Court concludes it can't be allowed to stand, regardless of how long the issue has percolated in the courts below. The court's reasoning--that Philip Morris was heavily regulated by the Federal Trade Commission such that it was effectively "acting under" federal officials when it promoted and sold its "light cigarettes"--is simply indefensible. Indeed, the absurdity of the decision is heightened when you consider that the federal government actually sued Philip Morris for the very same conduct that the Eighth Circuit concluded was carried out "under" federal direction.

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Watson v. Philip Morris Companies, Inc. 

Philip Morris removed a class action tobacco lawsuit from an Arkansas state court to the Federal District Court for the Eastern District of Arkansas. Plaintiffs Watson and Lawson sought to remand the case to state court, but their motion was denied. The Eighth Circuit held that Philip Morris was a corporation qualifying as a “person acting under a federal officer” and thus entitled to removal under 28 U.S.C. § 1442(a)(1). The Supreme Court takes up the question of whether parties operating in an arena of heavy federal regulation qualify under this federal officer removal statute or, to the contrary, if the statute’s origins and history preclude such interpretation. . . .

Conclusion

Ultimately, the Supreme Court's decision here will turn on its interpretation of the federal officer removal statute based on the statute's history, text, and subsequent application by courts. If the Supreme Court takes a "letter of the law" approach, it may conclude, as did the Eighth Circuit, that according to the delineated requirements articulated by federal courts who have previously considered the statute, Philip Morris meets the standard of eligibility for protection, and the case should stay in federal court. If, however, the Court is moved by the argument that the intended purpose of the statute could never be interpreted as contemplating parties like Philip Morris who are complying with (as opposed to enforcing) federal regulations, then Philip Morris may indeed get to find out whether it can get a fair trial in a state court.

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Argument Preview: Watson v. Philip Morris on 4/25 

This morning, the Court will hear oral argument in Watson v. Philip Morris (No. 05-1284), which presents the question whether a private company "doing no more than complying with federal regulation is a 'person acting under a federal officer' for the purpose of 28 U.S.C. § 1442(a)(1), entitling the actor to remove to federal court a civil action brought in state court under state law." This novel use of the "federal officer removal" provision in response to several class action "light" cigarette suits in state courts under state law puts at issue important federalism principles concerning supremacy, comity, and the presumption against federal preemption. . . .

At issue in the case is the degree of regulation needed to give a defendant that can advance a colorable federal defense its choice between the sovereigns. The petitioners are Arkansas residents who have smoked at least one pack of Marlboro Light cigarettes per day for the last six years. They filed a complaint filed in Arkansas state court in which they alleged that respondent Philip Morris violated the Arkansas Deceptive Trade Practices Act by designing Marlboro Lights to deliver higher levels of tar and nicotine than the labels "light" and "lowered tar and nicotine" would suggest, and that the cigarettes were specifically designed to defeat the FTC's prescribed testing methods. . . .

Watson provides the Court with another opportunity to adjust the tension between, on the one hand, the general right of the states to exercise their police power and to provide for the health and welfare of their citizens and, on the other, the federal prerogative to administer a consistent national tobacco policy unencumbered by frequent state interference. Interestingly, were the Court to affirm the Eighth Circuit decision, it would suggest the embrace of a distinctively federal conception of the subject matter jurisdiction of the federal courts. By contrast, as a result of the enactment of the Class Action Fairness Act of 2005, which generally supplanted individual removal procedures in cases such as this one and which serves as an even clearer statement of Congress's intent to preempt the states by creating an independent alternative means for access to federal court, an opinion reversing the decision below would not limit access to federal courts in future cases involving federal regulatory control.

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• LISA WATSON, ET AL., v. PHILIP MORRIS COMPANIES, INC., ET AL.  

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. . . .

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.

First, the court articulated the wrong test for determining when a person is acting under a Federal officer.

Second, the court misunderstood the Federal Trade Commission's regulatory regime with respect to the marketing of so-called light cigarettes.

And third, the court's approach ignores the long history and purposes of the federal officer removal provision to protect the Federal Government operations from interference by State court proceedings.

In this case, and in this Court, Philip Morris largely abandons the Eighth Circuit's rationale and offers an alternate ground of affirmance. It should be rejected. The FTC has not delegated authority to conduct testing to Philip Morris, and the complaint in any event challenges only the company's marketing and not its testing of so-called light cigarettes.

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