New York Times

October 7, 2008

Supreme Court Opens Term With a Tobacco Fraud Case

By ADAM LIPTAK
 
WASHINGTON — Smokers who say they were defrauded by tobacco companies that marketed “light” cigarettes faced a skeptical Supreme Court on Monday in the first argument of the court’s new term.

The justices accepted, some provisionally and others explicitly, that the term “light” can be misleading when referring to levels of tar and nicotine. While it is true that brands like Marlboro Lights register lower levels of tar and nicotine when smoked by machines under a standard method authorized by the Federal Trade Commission, many human smokers compensate by puffing harder, smoking more cigarettes or inhaling deeper.

Justice Samuel A. Alito Jr. challenged a lawyer for the federal government who was at the argument to support the plaintiffs and said the trade commission’s position “seems to me incomprehensible.”

“If these figures are meaningless,” Justice Alito continued, “then you should have prohibited them a long time ago.”

But the question in the case is not whether it is fraudulent to call cigarettes “light” or whether the commission has acted responsibly. It is, instead, whether smokers should be able to sue under state law given that a federal law bans at least some claims concerning smoking and health.

The case, Altria Group Inc. v. Good, No. 07-562, is the court’s latest exploration of the limits of pre-emption, the legal doctrine that can prohibit lawsuits concerning products that have met federal standards.

The case was brought by three plaintiffs from Maine as a proposed class action. They sued Altria and its Philip Morris USA unit for fraud under Maine’s Unfair Trade Practices Act, saying they had been injured by their reliance on what they called the companies’ false statements.

The defendants countered by invoking a federal law, the Cigarette Labeling and Advertising Act, which says “no requirement or prohibition based on smoking and health shall be imposed under state law with respect to the advertising or promotion” of cigarettes that follow federal labeling requirements.

The parties agreed that the provision prohibited lawsuits challenging advertising claims “based on smoking and health.” But they disagreed about whether the current fraud suit, which seeks money for economic rather than medical harm, was inextricably intertwined with claims about smoking and health.

Theodore B. Olson, representing the tobacco companies, said the plaintiffs’ fundamental claim — that they had been misled into buying cigarettes they believed were safer than regular ones — was inescapably about smoking and health.

David C. Frederick, representing the plaintiffs, said the federal law did not pre-empt fraud suits brought under general state consumer protection laws. Mr. Frederick drew on a fractured 1992 Supreme Court decision, Cipollone v. Liggett Group, in which a four-justice plurality said Congress had not meant to pre-empt all fraud suits concerning cigarettes.

Mr. Frederick said there was a difference between state laws “specially targeted at the cigarette industry” and “a generally applicable rule against deception,” one that would not entangle a jury into “any special inquiry about smoking and health.” Only the first sort of law is pre-empted, he said.

Chief Justice John G. Roberts Jr. did not seem to be persuaded.

“How do you tell whether it’s deceptive or not if you don’t look at the relationship between smoking and health?” Chief Justice Roberts asked. “They have an advertisement that says light cigarettes are better for you than regular cigarettes. You have to know what the relationship is between smoking and health to determine whether that’s deceptive.”

Justices Anthony M. Kennedy and David H. Souter asked Mr. Frederick what sort of harm remained if the suit was entirely divorced from claims about health.

“So what are your damages?” Justice Kennedy asked.

“Yes,” Justice Souter added. “What’s the difference in value?”

Neither justice seemed satisfied with Mr. Frederick’s response that “economists have projected” that cigarette buyers would have acted differently had they known the truth.

Justice Stephen G. Breyer tried to suggest a line between permissible and forbidden lawsuits.

“I can totally understand why Congress would not want 50 states telling cigarette companies what to say about health and smoking,” Justice Breyer said. “What I can’t understand is why Congress would want to get rid of, in this area, the traditional rule that advertising has to tell the truth.”

The federal government has played a minor role in the case.

To the frustration of several justices, the government took no position on the central issue of whether the federal law pre-empted the state claims, in so many words. Rather, the solicitor general’s office submitted a vigorous brief supporting the plaintiffs limited to a separate argument — that the trade commission’s actions had not pre-empted the suit by implication.

Mr. Olson, the companies’ lawyer, had already all but thrown his argument on that point overboard by the time the government’s lawyer rose to speak.

“I’d like to spend no time on the implied pre-emption argument,” he said.

“Good idea,” Justice Antonin Scalia responded.

Asked repeatedly where the government stood on the effect of the federal law itself, Douglas Hallward-Driemeier, an assistant to the solicitor general, would not bite. “The United States has not taken a position on the bottom line” of the main issue in the case, Mr. Hallward-Driemeier said.

On the first day of its term, the court also issued an 82-page list of orders concerning cases that had accumulated over its summer break. It accepted no new cases and turned down several that had gained public attention.

The court will not hear cases about “Choose Life” license plates, Bible consultation during jury deliberations, whether criminal juries must act unanimously and the constitutionality of the way some patent judges have been appointed. The court took no action in the case of Troy A. Davis, a death row inmate in Georgia who says he is innocent. The court, which has granted a stay in the case, will consider whether to hear Mr. Davis’s appeal at its next private conference, on Friday.

The list of orders also suggested that Justice Breyer and his wife had sold some of the dozens of stocks they held, allowing the justice to participate in more cases. The development was first reported by Bloomberg News.

Kathleen Arberg, the court’s public information officer, confirmed the sales. “Justice Breyer and his wife intend to continue to sell shares” under a law that permits judges to defer paying capital gains taxes, Ms. Arberg said, “in order to minimize the number of instances in which financial conflicts require recusal.”