Philip Morris Cos. v. Miner

• Decision Date: 26 February 2015
• Docket Number: No. CV–14–193,CV–14–193
• Parties: Philip Morris Companies, Inc., a corporation and Philip Morris Incorporated, a corporation, Appellants v. Wayne Miner and James Easley, individually and on behalf of all others similarly situated, Appellees
• Court: Arkansas Supreme Court

2015 Ark. 73

462 S.W.3d 313

Philip Morris Companies, Inc., a corporation and Philip Morris Incorporated, a corporation, Appellants

v.Wayne Miner and James Easley, individually and on behalf of all others similarly situated, Appellees

No. CV–14–193

Supreme Court of Arkansas.

Opinion Delivered February 26, 2015

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., by: R.T. Beard, III ; Little Rock, and Arnold & Porter LLP, by: Lisa S. Blatt, John C. Massaro, and David E. Kouba, for appellants.

Thrash Law Firm, P.A., by: Thomas P. Thrash and Marcus Neil Bozeman, Little Rock; Don Barrett, P.A., by: John W. “Don” Barrett, Lexington, and Brian K. Herrington ; and Barnow & Associates, P.C., by: Ben Barrow, and Erich Schork, Chicago, for appellees.

Brian G. Brooks, Attorney at Law, PLLC, by: Brian G. Brooks, for amicus curiae Arkansas Trial Lawyers Association.

Kitterman Law Firm, P.A., by: Gregory S. Kitterman, Little Rock; and Elliott & Smith Law Firm, by: Don R. Elliott, Jr., Fayetteville, for amici curiae Tobacco–Free Kids, American Lung Association, and American Cancer Society Cancer Action Network.

Kutak Rock LLP, by: Jess Askew III, Little Rock, for amicus curiae Arkansas State Chamber of Commerce.

Opinion

RHONDA K. WOOD, Associate Justice

Class certification is proper if six, rule-based prerequisites are satisfied. Two of those prerequisites are at issue in this case: predominance and superiority. Another issue is whether the class is ascertainable. Here, the class plaintiffs alleged that Philip Morris deceived them by advertising Marlboro Lights as being safer and having less tar and nicotine than other cigarettes. The circuit court certified the plaintiffs' class action against Philip Morris based on the Arkansas Deceptive Trade Practices Act; Philip Morris appeals the class certification. Because common issues predominate, because the class-action mechanism is a superior method to adjudicate at least some parts of the plaintiffs' cause of action, and because the class is ascertainable, we affirm the circuit court's order certifying the class.

I. Procedural History

Wayne Miner and James Easley filed a class-action complaint against Philip Morris Companies Inc. and Philip Morris Incorporated. Plaintiffs alleged, on their behalf and for others similarly situated, that Philip Morris violated the Arkansas Deceptive Trade Practices Act (ADTPA)¹ by falsely representing that its Marlboro Lights cigarettes were healthier and contained less tar and nicotine than regular cigarettes. Specifically, plaintiffs allege that Philip Morris violated the ADTPA in the following ways:

• Falsely representing that Lights cigarettes delivered lowered levels of tar and nicotine and were less harmful than regular cigarettes;

• Describing the product as “Light” and having “lowered tar and nicotine” when Lights did not, in fact, lower the tar and nicotine delivered to the consumer;

• Intentionally manipulating the design and content of Lights in order to maximize nicotine and tar delivery when deceptively claiming lowered tar and nicotine; and

• Using techniques that purportedly reduce machine-measured levels of Lights' tar and nicotine content while actually increasing harmful biological effects, like specific constituent toxicity and mutagenicity.

Plaintiffs argued that the circuit court should certify a class to bring the ADTPA claim against Philip Morris. After a hearing, the circuit court agreed with plaintiffs and certified the following class:

All persons who purchased Defendants' Marlboro Light [or Ultra Light] cigarettes in Arkansas for personal consumption from November 1, 1971, through June 22, 2010. Excluded from the Class are Defendants, any parents, subsidiary, affiliate, or controlled person of Defendants, as well as the officers, directors, agents, servants, or employees of Defendants, and the immediate family members of such persons.

The court concluded, inter alia, that common issues among all class members predominated over any individual issues and that a class action was a superior method of resolving the claim. Philip Morris has brought this interlocutory appeal from the circuit court's order certifying the class. See Ark. R. App. P.—Civ. 2(a)(9) (2014).

II. Standard of Review and Applicable Law

The certification of a class action is governed by Arkansas Rule of Civil Procedure 23 (2014). Circuit courts have broad discretion regarding class certification, and we will not reverse a circuit court's decision to grant or deny class certification absent an abuse of discretion. Union Pac. R.R. v. Vickers, 2009 Ark. 259, 308 S.W.3d 573. When reviewing a class-certification order, we focus on the evidence contained in the record to determine whether it supports the circuit court's conclusion regarding certification. Asbury Auto. Grp., Inc. v. Palasack, 366 Ark. 601, 237 S.W.3d 462 (2006). Our focus is “whether the requirements of Rule 23 are met” and “it is totally immaterial whether the petition will succeed on the merits or even if it states a cause of action.” Am. Abstract & Title Co. v. Rice, 358 Ark. 1, 9, 186 S.W.3d 705, 710 (2004). Stated another way, we “will not delve into the merits of the underlying claims when deciding whether the Rule 23 requirements have been met.” Nat'l Cash, Inc. v. Loveless, 361 Ark. 112, 116, 205 S.W.3d 127, 130 (2005).

Rule 23 imposes six prerequisites for certification of a class-action complaint: (1) numerosity; (2) commonality; (3) typicality; (4) adequacy; (5) predominance; and (6) superiority. Ark. R. Civ. P. 23(a), (b) ; Asbury Auto., supra ; Lenders Title Co. v. Chandler, 358 Ark. 66, 73, 186 S.W.3d 695, 699 (2004). Philip Morris has not challenged the circuit court's ruling regarding numerosity, commonality, typicality, and adequacy, so the only prerequisites at issue are predominance and superiority.²

III. Commonality and Predominance

Although Philip Morris did not challenge the court's finding of commonality in its points on appeal, we discuss commonality here because it is intertwined with predominance. “One or more members of a class may sue or be sued as representative parties on behalf of all only if ... (2) there are questions of law or fact common to the class.” Ark. R. Civ. P. 23(a). Citing to a leading treatise, we have noted that the commonality requirement is satisfied when a single common issue is present among the class members:

Rule 23(a)(2) does not require that all questions of law or fact raised in the litigation be common. The test or standard for meeting the rule 23(a)(2) prerequisite is ... that there need be only a single issue common to all members of the class.... When the party opposing the class has engaged in some course of conduct that affects a group of persons and gives rise to a cause of action, one or more of the elements of that cause of action will be common to all of the persons affected.

Williamson v. Sanofi Winthrop Pharmaceuticals, Inc., 347 Ark. 89, 96, 60 S.W.3d 428, 432 (2001) (quoting Newberg, Class Actions § 3.10 (3d ed. 1993) ). The circuit court must determine what elements in a cause of action are common questions for the purpose of certifying a class. Id. “The requirement is not difficult to meet.” David Newbern et al., Arkansas Civil Prac. & Proc. § 8:3 (5th ed. 2010).

In its findings of fact and conclusion of law, the circuit court ruled that the following were common questions of law and fact: (1) whether Philip Morris engaged in an advertising campaign that represented Lights as healthier and/or safer than regular cigarettes; (2) whether Lights are healthier and safer than regular cigarettes; (3) whether plaintiffs received a product that was as warranted and represented; (4) if the product was not as warranted, the difference in value between the product as warranted and delivered; and (5) whether Philip Morris violated the ADTPA with respect to the Lights advertising and marketing programs.

“Predominance is a more stringent requirement than commonality.” United Am. Ins. Co. v. Smith, 2010 Ark. 468, at 10, 371 S.W.3d 685, 692. Predominance is a shorthand term for the following requirement from Rule 23(b) : “An action may be maintained as a class action if ... the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members.” The starting point in examining the predominance requirement is whether a common wrong has been alleged against the defendant. Kersten v. State Farm Mut. Auto. Ins. Co., 2013 Ark. 124, 426 S.W.3d 455. We have approved a bifurcated approach to the predominance element by allowing the trial courts to divide the case into two phases: (1) certification for resolution of the preliminary, common issues; and (2) decertification for resolution of the individual issues. Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997). The predominance element can be satisfied if the preliminary, common issues may be resolved before any individual issues. Asbury Auto., 366 Ark. at 610, 237 S.W.3d at 469.

In making this determination, we do not merely compare the number of individual versus common claims. Asbury, supra. Instead, we must decide if the issues common to all plaintiffs “predominate over” the individual issues, which can be resolved during the decertified stage of bifurcated proceedings if necessary. Id. Conducting a trial on the common issue in a representative fashion can achieve judicial efficiency. Smith, 2010 Ark. 468, at 10–11, 371 S.W.3d at 692–93. Thus, the mere fact that individual issues and defenses may be raised regarding the recovery of individual members cannot defeat class certification where there are common questions concerning the defendant's alleged wrongdoing that must be resolved for all class members. Vickers, supra.

In the instant matter, Philip Morris maintains that each element of plaintiffs' ADTPA claim—misrepresentation, causation, and damages—contains overriding individual issues that destroy...