Local smokers’ lawyers fired up for 'light' cigarette fraud claims
by Michelle Lore Associate Editor
Michael Dahl has smoked two packs of Camel Lights every day for more than 20 years. David Scott Huber has smoked nearly a pack of Camel Lights, Winston Select or Winston Lights every day for the past 10 years. The two Minnesotans are now suing the cigarette manufacturer, R.J. Reynolds Tobacco Company, on behalf of all people in the state who have smoked their “light” brands over the years.
The plaintiffs aren’t claiming that their health has suffered as a result of their tobacco use, but rather that they were deceived by the company’s advertising and marketing about the nature and effect of smoking “light” cigarettes.
The case stalled for a while due to a split in the U.S. circuit courts over whether the claims were pre-empted. But the decision from the U.S. Supreme Court last month in Altria Group Inc. v. Good that state law fraud claims relating to cigarette packaging and marketing are not pre-empted by federal law has allowed Dahl, Huber and many other plaintiffs to begin moving forward again.
Minneapolis attorney Gale Pearson, one of the attorneys representing the plaintiffs, said it’s important the tobacco companies don’t get away with deceiving customers into thinking light cigarettes are better for them than regular cigarettes.
“This is a product that tobacco companies tried to sell to consumers to convince them to keep smoking,” she said. “It’s kind of like diet pop — you can drink it or smoke it without guilt. … So it was actually created as a health reassurance product by the tobacco companies. And that’s wrong.”
Appellate attorney Kay Nord Hunt, who also represents the plaintiffs, echoed that sentiment. “What the U.S Supreme Court basically affirmed in the Good case is that nobody has license to commit fraud,” she said.
“[It] simply addressed a preliminary issue that had been unresolved — pre-emption,” he said. “But there have been other courts around the country that have addressed some of these merits and we think ultimately we will succeed and show that smokers were not misled.”
Heavy allegations
Dahl and Huber contend that the defendant engaged in a course of unfair and deceptive business practices with respect to the promotion and marketing of light cigarettes. Specifically, they contend that R.J. Reynolds:
— falsely and/or misleadingly represented that its product is “light” and/or delivers lowered tar and nicotine in comparison to regular cigarettes;
— described the product as light when the so-called lowered tar and nicotine deliveries depended on deceptive changes in cigarette design and composition that dilute the tar and nicotine content of smoke per puff as measured by the industry standard testing apparatus, but not when used by the consumer;
— intentionally manipulated the design and content of Camel Lights and Winston Lights cigarettes in order to maximize nicotine delivery while falsely and/or deceptively claiming lowered tar and nicotine; and
— employed techniques that purportedly reduce machine-measured levels of tar and nicotine in Camel Lights and Winston Lights cigarettes, while actually increasing the harmful biological effects caused by the tar ingested by the consumer.
The complaint alleges common law misrepresentation and fraud, unjust enrichment and violations of Minnesota’s consumer protection statutes: the Unlawful Trade Practices Act, the Deceptive Trade Practices Act, the Minnesota False Statement in Advertising Statute and the Prevention of Consumer Fraud Act.
When the plaintiffs moved for class certification, R.J. Reynolds moved to dismiss the claims on the grounds that they were pre-empted by the Federal Cigarette Labeling and Advertising Act, which states that “no requirement or prohibition based on smoking and health shall be imposed under state law with respect to the advertising or promotion of cigarettes.”
Without ruling on the plaintiffs’ certification motion, Hennepin County District Court Judge Diana Egan determined that the claims were pre-empted by federal law.
A little more than a year ago, the Court of Appeals reversed. At the time, there was a split among the federal circuit courts as to whether fraud claims surrounding the use of “light” or “low tar” in the advertising of cigarettes are pre-empted by the FCLAA. The Minnesota Court of Appeals chose to follow the reasoning of the 1st U.S. Circuit Court of Appeals in Good v. Altria Group, Inc., and found that the plaintiffs’ claims were not pre-empted by federal law. The court noted that the plaintiffs do not assert that the “light” term neutralized the federally mandated warnings, but rather that they were deceived into making a purchase they otherwise would not have.
The Minnesota Supreme Court accepted review, but because the U.S. Supreme Court had granted certiorari in Good to resolve the split among the circuits, the matter was stayed pending that result.
Now that the U.S. Supreme Court has determined that the light cigarette cases are not pre-empted, Dahl should begin moving forward again.
Hunt, who has been handling the appeal, said that she has contacted the Minnesota Supreme Court and asked that it affirm the Court of Appeals decision and remand the case, or in the alternative, vacate its order granting further review and then send it back. As soon as the case gets back to the District Court, the plaintiffs will renew their motion for class certification, she said.
Davidson said he is confident that the defendants will be able to avoid class certification.
“The 2nd Circuit last year, in a very similar case involving light cigarettes, decertified a class and made it very clear that these cases are not appropriate for class certification,” he said.
Davidson added that in another consumer protection case — one involving medical devices — the 8th Circuit has indicated that class certification is not appropriate in statutory fraud-type claims.
Three’s a charm
The Dahl case is one of three Minnesota cases filed against tobacco companies for their marketing and distribution of light cigarettes.
The first case, Curtis v. Philip Morris, was filed in October 2001, prior to Dahl. Hennepin County District Court Judge Gary Larson certified that case as a class action prior to the pre-emption issue heating up.
“It’s the same issues, different tobacco company,” said Hunt.
A third case, Thompson v. Brown Williamson, which was assigned to Hennepin County District Court Judge Robert Blaeser, has been on hold pending the Good decision. Now that Good has been decided, both matters are scheduled for conferences this month to plan the next steps in the litigation.
The plaintiffs’ attorneys aren’t sure yet how many people will be in each class, but because light cigarettes first hit the market in the early 1970s, millions of Minnesotans could be included.
“To the extent that folks, even back in ’72, were purchasing light cigarettes, believing them to be a safer alternative than regular cigarettes, those folks belong in the class,” said Pearson.
Unfair profit?
The plaintiffs are seeking restitution and full disgorgement of the profits the companies received as a result of their allegedly deceptive practices.
“They should not have been able to sell or profit by this product,” said Hunt. “This is consumer fraud and they shouldn’t have been out there presenting this product. So [the claim is] for everything that is sold.”
Pearson said that figuring out the exact amount of damages shouldn’t be too difficult, in part because the tobacco companies keep detailed notes about the number of light smokers in every state, the price of the cigarettes and how the laws in each state affect the price.
While taking on the tobacco companies is a lot of work, “when we get down to calculating damages, I consider it a no-brainer compared to everything else,” she said.
Punitive damages may also be available, although to date no motions have been made to amend the complaints to add the claim.
Davidson contends that this is a case where there are no damages.
“The plaintiffs’ claims are that they were economically harmed, yet the cigarettes they purchased were the same price as regular cigarettes. … The [2nd Circuit] in particular has rejected the various damage theories that the plaintiffs had and pointed out that is one fundamental fact that is going to be very difficult, if not impossible, for plaintiffs to overcome.”
