Smokers in Maine have won their bid to force the tobacco company
Altria Group to stand trial for allegedly defrauding them into
believing that "low tar" and "light" cigarettes were a healthier
alternative to regular cigarettes.
On Monday, the US Supreme Court sided with the smokers in a 5-to-
4 decision, saying their lawsuit was not preempted by national laws
and regulations enforced by the Federal Trade Commission (FTC).
The ruling is an important victory for injured consumers and
consumer advocate groups who say it will make it easier for local
residents to recover damages from national companies involved in
alleged deceptive practices.
The decision is a setback for business groups that have been
urging the high court to expand the application of preemption
principles to help short-circuit state-based consumer lawsuits.
The case stems from a lawsuit filed against Philip Morris USA and
its parent company, Altria, charging that the companies engaged in a
decades-long fraud on Maine smokers in violation of a state law
against deceptive business practices.
Altria responded to the suit by arguing that its products are
regulated by federal law and the FTC, not the state of Maine. A
federal judge agreed and dismissed the smokers' suit. But the First
US Circuit Court of Appeals in Boston reinstated the action, ruling
that the state lawsuit is not preempted by federal law.
At the heart of the case was a clash between a state law, the
Maine Unfair Trade Practices Act, and a federal law, the Federal
Cigarette Labeling and Advertising Act.
Lawyers for Altria argued that the federal labeling act preempted
the Maine law. The federal labeling act says in part that if
cigarette packages are labeled in conformity with the act, "no
requirements or prohibition based on smoking and health shall be
imposed under state law" on advertisements or promotion of
Writing for the majority, Justice John Paul Stevens said the
Maine state law forbids companies from making fraudulent statements.
He said it created a broader duty for companies that extended beyond
actions merely related to "smoking and health" that are regulated by
"We conclude ... that the Labeling Act does not pre-empt state-
law claims like respondents' that are predicated on a duty not to
deceive," Justice Stevens writes.
His decision was joined by Justices Anthony Kennedy, David
Souter, Ruth Bader Ginsburg, and Stephen Breyer.
In a dissent, Justice Clarence Thomas said the court should have
enforced preemption in the case, and created a clear test for the
lower courts. …