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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'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.
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.
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.
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."
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.
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."
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.
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."
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.
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.
The U.S. Supreme Court heard oral arguments Wednesday in the case of two Little Rock women, who claimed that Philip Morris Cos. Inc. deceived consumers in the marketing of its "light" cigarettes.
Lisa Watson and Loretta Lawson sued the tobacco giant, claiming that the company's Marlboro and Cambridge cigarettes weren't as low in tar and tobacco as advertised.
The Richmond, Va., tobacco company sought to have the case moved into federal court under a "federal officer" provision that allows suits against federal officials to be kept out of state courts.
Federal courts are more desirable to corporations . . .
Philip Morris lawyers said the FTC "exercised unprecedented detailed and direct control" over things like cigarette advertising.
Justice Antonin Scalia asked Philip Morris attorney Theodore Olson whether it was "careless" to consider FTC ratings "official."
"This is not merely compliance with the rule," Olson responded. "This is not merely testing of products. The FTC created the standard."
The Supreme Court agreed Friday to consider whether tobacco companies can be protected from state court judgments since cigarettes are regulated by the federal government.
In one of four appeals accepted Friday, justices had been asked to decide whether lawsuits that accuse cigarette-makers of wrongdoing can be shifted out of state court and into federal court, under a special provision.
That's what happened in Arkansas, where Philip Morris was sued in a class-action case claiming the company violated state law in marketing its "light" cigarettes. The suit claimed the cigarettes were more dangerous than the company advertised. Tobacco companies have faced similar suits around the country.
The suit covered people who used Marlboro Lights and Cambridge Lights.
The U.S. Supreme Court on Friday accepted a plea from Arkansas plaintiffs upset about the court venue for their tobacco lawsuit against Philip Morris Cos., a unit of Altria Group Inc. (MO). The justices took up the appeal without comment, a move that opens up the prospect that a Philip Morris advantage in the case could shift. This is the second Supreme Court appeal granted this term involving the tobacco giant. The class-action lawsuit, early in its litigation, alleges Philip Morris violated Arkansas laws with deceptive marketing of its light cigarette brands Marlboro Lights and Cambridge Lights. Altria got the case moved to federal court, arguing the Federal Trade Commission had primary authority in regulating the advertising practices for tobacco products. Companies generally favor liability lawsuits be litigated in a federal court because of uniform standards and what they believe are more predictable results than state courts. The Supreme Court, in taking up the appeal, will review whether the lower court properly ordered the lawsuit into federal court under the legal reasoning involving the FTC.
The U.S. Supreme Court Monday asked the federal government to comment on whether it should hear the appeal of a state tobacco lawsuit against Philip Morris Cos. Inc., a unit of Altria Group Inc. (MO).
The lawsuit is pending in a federal court, but the plaintiffs who sued the tobacco company want the case to be heard in the Arkansas state court where it was originally filed. At issue in the appeal is whether the lawsuit was properly taken over by a U.S. District Court because of the involvement of the Federal Trade Commission in the regulation of tobacco nicotine and tar levels.
The class-action lawsuit alleges Philip Morris violated Arkansas laws with deceptive marketing of its light cigarette brands Marlboro Lights and Cambridge Lights. "Plaintiffs have averred that Philip Morris falsely represented its cigarettes as light or low tar," attorneys for the plaintiffs said in a court filing. . . .
Philip Morris got the case moved to a federal court under a law that allows cases involving a "federal officer" to be moved from a state to a federal venue. Corporations say they generally prefer to litigate at the federal level because state laws vary and outcomes in state courts are less predictable.
The U.S. Solicitor General's office will file a brief in the case on whether it thinks the FTC meets the definition of a federal officer under the lawsuit removal law. The brief will be filed later this year and the case will be reconsidered by the Supreme Court after the government makes its filing.
For over 40 years the FTC has exercised unprecedented detailed and direct control over the measurement and disclosure of cigarettes' tar and nicotine yieldsPhilip Morris, in a legal brief filed in Arkansas' Watson suit, a "lights" class action which PM has successfully moved to a Federal court. The state is appealing to SCOTUS.